Report Finds that Synthetic Identity Fraud is Responsible for $20 Billion in Theft
FiVerity, a leading provider of cyber fraud defense, released its 2021 Synthetic Identity Fraud (SIF) Report, a timely and definitive study of this emerging cybercrime. The new FiVerity report delves into the formulation of synthetic identities, the construction of these profiles, how they avoid detection, and more. To get a copy of the 2021 Synthetic Identity Fraud Report
Recommended AI News: Kinetica Now on Microsoft Azure, Bends the Space-Time Continuum
At their core, SIF profiles are fake personas that feature a mix of identity elements stolen from real people including names, social security numbers, and addresses. While each SIF profile is unique, they do share a common trait–they succeed regularly.
To date the industry has struggled to determine the size and growth of SIF. This is largely due to challenges in collecting reliable data about a crime that only succeeds by operating under the radar, which helps explain why SIF is largely undetectable by traditional identity verification systems.
In the 2021 Synthetic Identity Fraud Report, FiVerity estimates that SIF losses grew to $20 billion last year. FiVerity developed this comprehensive estimate of SIF’s impact on the U.S. payments system using insights from its Cyber Fraud Network™, which tracks confirmed SIF profiles throughout the financial services industry.
In addition to providing a comprehensive look into the world of SIF, the report features a new “Profile of a SIF Account infographic.” The graphic provides a snapshot of these accounts, including commonly used personal details and financial summaries. Some highlights include:
- High Credit Rating: The typical SIF account has a FICO score of 742—that’s higher than the average score of 698, as reported by Equifax.
- Multiple Accounts: New SIF Profiles open an average of five trade lines shortly after their first loan application is approved.
- High Credit Limit: These relatively new trade lines provide an initial credit limit of $12,248 per account.
- Current Payments: While building up their trade lines, SIF profiles look like good customers with an average balance below $4,000 and on-time payments.
- Cashing In: Fraudsters can take as long as 18 months to build up their credit and then strike–the average SIF profile successfully steals between $81,000 and $98,000.
Recommended AI News: Population Health Management Reimagined: Warrior Centric Health and HCL Technologies to Develop New Digital Platform.
SIF’s massive growth stems from its use of automation and AI technology to evade traditional identity verification solutions. Criminals apply approved and rejected loan applications to their AI-driven systems, creating a feedback loop that generates increasingly effective applications. “The model used by criminals essentially figures out the thresholds for the fraud detection rules used by legacy systems and develops new profiles that are even better at evading them,” says Greg Woolf, CEO, and Founder of FiVerity.
According to Mr. Woolf, “the global criminal organizations behind SIF are extremely sophisticated. SIF accounts provide them with a front to conduct especially serious crimes like human trafficking and weapons proliferation. A critical element to stopping SIF is to educate the financial services industry about this cybercrime, which we hope to do with this report.”
FiVerity’s Cyber Fraud Network is the industry’s first collaborative system built to combat the convergence of cyber tactics with fraudulent theft. The network leverages the combined cyber fraud knowledge of financial institutions, regulators, and law enforcement to improve defense against SIF, by facilitating the secure exchange of intelligence on suspected fraudsters without disclosing personally identifiable information (PII). For more information about FiVerity’s Cyber Fraud Network
Recommended AI News: Tech Startup, Bank of Kicks, Plans to Launch First Crypto Bank Backed by Sneakers
[To share your insights with us, please write to sghosh@martechseries.com]
Comments are closed.