White Paper: Synthetic Identity Fraud on the Rise
Oct. 27, 2014
Synthetic identity fraud – when a thief creates an identity that isn’t associated with an actual person to monetize fraudulent transactions – has increased 126 percent in the past three years, according to a new report. ID:A Labs, the analytics and research arm of risk management services provider ID Analytics, has released a white paper highlighting this type of fraud that has become more pervasive in recent years. According to the report, fraudsters nurture the identities, which can remain undiscovered for long periods because there is no victim to put a stop to it, to generate large credit limits they can leverage into a bigger take than that provided by the average identity theft.
“Synthetic identity fraud is a significant and growing problem as fraudsters continue to find new ways to commit crimes despite technological advances,” said Dr. Stephen Coggeshall, chief analytics and science officer for ID Analytics. “Our latest research in this area shows that although the number of synthetic identities is decreasing, the riskiness of those synthetic identities is on the rise. One possible reason is that fraudsters are exploiting SSN randomization to help create and use false identities. Not only are synthetic identities used for financial gain, they can also be used to launder money and to support terrorist and other criminal activities.”
SSN randomization is a new approach to Social Security Number issuance that, while designed to reduce fraud, has made it more difficult in some cases to detect fictitious SSNs, the report said.