As the COVID-19 pandemic raged, Adam Arena was getting rich. However, he wasn’t running a prosperous business that was thriving despite pandemic uncertainty. Instead, Arena and a dozen co-conspirators were stealing more than $1 million from financial institutions using a fraud scheme called “synthetic identity fraud.”
This fraud approach, the fastest-growing in a long line of fraud techniques, is especially prevalent in the financial services arena among threat actors leveraging stolen credentials to make money.
The Federal Reserve defines synthetic identity fraud as “the use of a combination of personally identifiable information (PII) to fabricate a person or entity in order to commit a dishonest act for personal or financial gain.”
Unlike identity theft, in which a fraudster uses a specific individual’s stolen—yet real—information, fraudsters create synthetic identities by combining elements of real and fictitious PII. This “identity” is then used to obtain a loan or extensive credit line, but it’s never paid back.
In today’s digital-first world, synthetic identity fraud is becoming more prevalent and pervasive. One estimate found that synthetic identity fraud will cost businesses $5 billion by next year. Within businesses, many see synthetic identity fraud as becoming more common in their industries. Additionally, a survey of financial industry analysts found that 70% of respondents agreed that synthetic identities were a more s ..
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