Synthetic identity fraud has emerged as the fastest-growing form of financial crime, surpassing traditional credit card fraud and identity theft. This sophisticated scheme involves creating fictitious identities by combining real and fabricated personal information, posing a significant threat to financial institutions and individuals alike.
Fraudsters typically begin by obtaining authentic personal data, often focusing on Social Security Numbers (SSNs) from vulnerable groups such as children, the elderly or homeless individuals. They then combine this information with fake names, addresses and other details to create a new, synthetic identity.
What makes synthetic identity fraud particularly challenging to detect is its ability to pass initial verification checks. Unlike traditional identity theft, where inconsistencies are more apparent, synthetic identities can appear legitimate and even build positive credit histories over time.
To combat this growing threat, businesses are turning to advanced technologies and multi-layered approaches. Machine learning and artificial intelligence play crucial roles in analyzing customer behavior patterns and identifying anomalies. Additionally, cross-referencing data from multiple sources and implementing robust document and biometric verification methods can help uncover discrepancies.
For consumers, vigilance is key. Regularly monitoring credit reports, securing personal information and being cautious about sharing sensitive data online can help reduce the risk of becoming a victim.
As synthetic identity fraud continues to evolve, collaboration between financial institutions, technology providers and regulatory bodies will be essential in developing more effective detection and prevention strategies. By staying informed and implementing comprehensive security measures, both businesses and individuals can better protect themselves against this insidious form of financial crime.
Prompt Reporting: If you feel you have fallen for a scam or suspect your accounts or identity have been compromised, report the incident immediately. RCB Bank customers can contact us at 855-226-5722 during business hours Monday – Friday 8:00 a.m. – 6:00 p.m. excluding Federal Holidays or visit the RCB Bank Security Center website for detailed information. Need to contact RCB Bank Fraud Department on the weekend? Contact us at 877-361-0814 Saturday 8:00 a.m. – 4:00 p.m. CST or Sunday 8:00 a.m. – 12:00 p.m. CST (excluding Federal Holidays).
Contact other reliable sources such as the FBI and file a complaint at ic3.gov to contribute to efforts against these fraudulent activities.
Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. RCB Bank, Member FDIC.
Sources:
[1] Synthetic Identity Fraud: What is it and How to Combat it https://legal.thomsonreuters.com/blog/synthetic-identity-fraud-what-is-it-and-how-to-combat-it/
[2] Synthetic Identity Fraud: Strategies for Spotting Fakes https://www.trulioo.com/blog/fraud-prevention/synthetic-identity-fraud
[3] Trends in synthetic identity fraud | Thomson Reuters https://legal.thomsonreuters.com/en/insights/articles/trends-in-synthetic-identity-fraud
[4] What Is Synthetic Identity Fraud & Theft? Definition | Proofpoint US https://www.proofpoint.com/us/threat-reference/synthetic-identity-fraud
