Insights

Trends in Synthetic Identity Fraud

Tad Simons | April 21, 2O23

Over the past few years, synthetic identity fraud has surpassed credit-card fraud and identity theft as the fastest-growing form of fraud in the world. Why? Because stealing with a synthetic identity is easy, it's cheap, and the risk of getting caught is relatively low.

But from a criminal's point of view, the best thing about synthetic identity fraud is that so many organizations and institutions are vulnerable to it. Many entities like governments, financial institutions, insurance companies, retail stores, and e-commerce sites have not sufficiently upgraded their customer-verification systems to detect and prevent synthetic identity thieves before they strike.

At financial institutions, it's estimated that 95% of synthetic identities are not detected during the onboarding process. At many e-commerce and retail sites, losses due to synthetic identity theft are either never detected or simply written off as an unrecoverable cost of doing business.

Fraud ring stole $19M worth of iPhones, other hardware from stores across the US

William Gallagher | Jun O4, 2O19

Using fake IDs, an organized group of thieves posed as customers buying new phones and spreading the cost out over long-term contracts. The group operated for at least seven years before being caught.

Six people are being charged in New York with conspiracy, mail fraud and identity theft over allegedly stealing $19 million worth of devices, chiefly Apple iPhones. These people were reportedly at the head of a large, organized effort to purchase phones on contracts that were fraudulently signed using stolen identities. The gambit ran for some seven years.

Synthetic Identity Fraud on Rise

ABA Banking Journal| August,24, 2O23

Synthetic identity fraud continues to be among the most prevalent tactics used by fraudsters to target lenders, with both incidences and lender exposure associated with the fraud reaching all-time highs during the first half of 2023, according to new research by credit reporting agency TransUnion. TransUnion said auto lenders are among the most targeted U.S. lenders, with total synthetic identity exposure (this is, potential losses) reaching $1.8 billion in the first half of 2023 compared to $1.3 billion during the same time period last year. Bank credit cards were the second most targeted category, with exposure reaching $994 million in the first half of this year, up from $917 million during the first half of 2022. At the same time, exposure for retail credit cards dropped to $126 million from $144 million.