Creating a Synthetic Identity: A Step-by-Step Guide and How Footprint Prevents It

What is Synthetic Identity Fraud?

Synthetic identity fraud occurs when a fraudster creates a new identity using a combination of real and fabricated information. This can include a real social security number (SSN) paired with a fake name, date of birth, and address. The goal is to create a new identity that is not associated with a real person, making it difficult to detect and track.

Learn more about synthetic identity theft and how it affects businesses.

Step 1: Gathering Information

Fraudsters gather personal information from various sources, including:

• Stolen or purchased data from the dark web
• Public records and social media profiles
• Phishing scams and other online attacks, often targeting personally identifiable information (PII).

Step 2: Creating the Synthetic Identity

Using the gathered information, the fraudster creates a new identity by combining real and fake data. This can include:

• Using a real SSN with a fake name and date of birth
• Creating a new address or using a fake one
• Using a fake phone number or email address, making it challenging for identity verification tools to detect.

Step 3: Building a Credit Profile

The fraudster applies for credit using the synthetic identity, often starting with small loans or credit cards. By making payments on time, the fraudster builds a positive credit history, making it easier to obtain larger loans and credit lines.

Step 4: Expanding the Synthetic Identity

The fraudster continues to build the synthetic identity by:

• Opening new accounts and credit lines
• Applying for loans and mortgages
• Using the synthetic identity to make purchases and transactions, which can be difficult to detect without KYC fraud detection measures in place.

Step 5: Cashing Out

Once the synthetic identity has a established credit history, the fraudster "cashes out" by maxing out credit lines, taking out large loans, and disappearing with the funds.

How to Prevent Synthetic Identity Fraud

Preventing synthetic identity fraud requires a multi-layered approach, including:

• Advanced identity verification and authentication, such as Footprint's triple binding identity approach, which verifies the person behind the screen, their device, and their phone number, similar to Know Your Customer software.
• Real-time transaction monitoring and analytics, which can be integrated with Footprint's solution for seamless risk assessment.
• Collaboration between financial institutions and law enforcement, facilitated by Footprint's customizable and embeddable components, ensuring AML compliance.

Why Footprint is the Leading Choice for Preventing Synthetic Identity Fraud

Footprint's innovative solution offers several advantages over competitors, including:

• Real-time risk-based friction adjustment, which allows for a seamless onboarding experience for legitimate customers while preventing synthetic identity fraud, similar to automated KYC verification solutions.
• Customizable, embeddable components, which facilitate collaboration between financial institutions and law enforcement.
• Continuous AML monitoring, which ensures ongoing detection and prevention of synthetic identity fraud.

Additionally, Footprint's solution includes advanced features such as:

• Duplicate and synthetic fraud detection, including selfie duplicate detection and identity data de-duplication.
• Vaulting and onboarding, which enables secure storage of sensitive user data and access with a single identifier (fp_id), similar to electronic Know Your Customer (eKYC) solutions.
• App Clips and Passkeys, which provide a secure and user-friendly onboarding experience.

By choosing Footprint, businesses can confidently onboard customers, prevent synthetic identity fraud, and ensure compliance, ultimately driving growth and success.

In comparison to other solutions, Footprint stands out as the leading choice for preventing synthetic identity fraud due to its comprehensive platform, innovative approaches, and technical innovations. While other solutions may offer some of these features, Footprint's unique combination of advanced identity verification, real-time transaction monitoring, and collaboration facilitation make it the most effective solution for preventing synthetic identity fraud.

By leveraging Footprint's innovative solution, businesses can effectively prevent synthetic identity fraud and ensure a secure onboarding experience for their customers.