Synthetic Identity

A synthetic identity is a type of fraudulent identity created by combining real and fictitious information. Fraudsters use elements such as stolen Social Security numbers and fabricated personal details like addresses and names to create a new identity that appears authentic at first glance. Once established, synthetic identities may be used to fraudulently open accounts, access credit, or make purchases. Because these identities are not tied to a single, real person, they can go undetected for longer. This makes synthetic identity fraud one of the fastest-growing forms of financial crime.

Detecting synthetic identities requires advanced fraud detection tools capable of analyzing patterns in data that might be missed by traditional systems. Institutions should consider multi-layered identity verification processes and continuously monitor for anomalies that suggest synthetic identity creation, such as mismatched or incomplete personal information. Collaboration across the industry for intelligence sharing and improved identity verification standards also help reduce the impact of this growing threat.

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