The Fight Against Synthetic Identity Fraud

The Fight Against Synthetic Identity Fraud
Advanced data and innovative technology will help organizations more easily identify abnormal behavior and tell legitimate customers apart from "fake" ones.

Synthetic identity fraud — a type of fraud attack carried out by criminals who have created fictitious identities — continues to be a vexing challenge for many financial institutions and retail organizations, even prompting a recent white paper by the Federal Reserve. At the same time, many remain optimistic that initiatives on the near horizon may severely disrupt fraudulent behavior. Most notably, the Social Security Administration's electronic Consent Based Social Security Number Verification service — the pilot program scheduled for June 2020 — is designed to bring efficiency to the process for verifying Social Security numbers directly with the government agency. That said, criminals still have a window of opportunity to maximize their inventory of synthetic identities before the program kicks in.


It typically takes fraudsters approximately 12 to 18 months to create and nurture a synthetic identity prior to "busting out" — the act of attempting to build a credit history, with the intent of maxing out all available credit and eventually disappearing. That means fraudsters are investing money and time building numerous tradelines — a term to describe credit accounts listed on a credit report —  to ensure these "fake" identities are in good credit standing in order to steal the largest amount of money possible. Any significant progress in making synthetic identities easier to detect could cost fraudsters significant time and money.


For instance, an organized crime ring may be sitting on a large pool of "developed" synthetic identities. Just like perishable food in a grocery store, these synthetic identities now have an expiration date: June 2020. To monetize as ..

Support the originator by clicking the read the rest link below.