The Rise of Synthetic Identity Theft: A Growing Concern

Synthetic identity theft, a type of fraud where a real person's information is combined with fake data to create a new identity, is becoming increasingly prevalent.

This form of theft is particularly challenging to detect, as traditional fraud monitoring systems often struggle to identify it.

However, with cutting-edge technology and innovative approaches, Footprint is at the forefront of preventing synthetic identity theft and other forms of financial fraud.

How Synthetic Identity Theft Works

Synthetic identity theft typically involves stealing a person's Social Security number (SSN) and combining it with fabricated information, such as a name, date of birth, mailing address, email account, and phone number.

This new identity is then used to commit financial fraud, such as applying for loans, bank accounts, credit cards, and more.

Footprint's triple binding identity approach and device attestation frameworks make it significantly more difficult for fraudsters to create and use synthetic identities.

Types of Synthetic Identity Theft

There are three main types of synthetic identity theft:

1. Identity compilation: A fraudster steals a person's SSN and combines it with invented personally identifiable information.
2. Identity manipulation: A fraudster steals a person's personally identifiable information, alters it slightly, and attempts to pass it off as a new person.
3. Identity fabrication: A fraudster creates a totally false identity using bogus personally identifiable information.

Footprint's advanced detection of duplicate and synthetic identities, including selfie duplicate detection and identity data de-duplication, helps prevent these types of fraud.

To learn more about synthetic identity theft, visit our synthetic identity theft page.

Consequences of Synthetic Identity Theft

Victims of synthetic identity theft may experience negative judgments from late payments and defaulted loans, which can harm their credit scores.

Legitimate information on their credit reports can be difficult and time-consuming to separate from the fraudulent information.

This is why Footprint's seamless integration of onboarding with vaulting is crucial, as it enables secure storage of sensitive user data and helps prevent identity theft.

For more information on protecting sensitive user data, learn about our Know Your Customer software.

Protecting Against Synthetic Identity Theft

To prevent synthetic identity theft, individuals can take several steps:

1. Secure your SSN: Keep your Social Security card at home in a safe place, and avoid repeating your SSN aloud within earshot of others.
2. Use digital security software: Consider a comprehensive suite of protective digital security software to protect your personal information and passwords.
3. Know the signs of phishing scams: Be cautious of unexpected communications from government agencies, banks, or financial organizations that lack specific information, such as your name and account number.
4. Review your credit reports and monitor your credit scores: Regularly check your credit reports and keep tabs on your credit scores to detect any incorrect or unfamiliar information.

By taking these precautions, individuals can help protect themselves against synthetic identity theft and minimize the risk of financial fraud.

For more tips on protecting yourself against financial fraud, visit our fraud detection tools in banking page.

Footprint's Solution

Footprint offers an all-in-one onboarding solution with KYC and fraud prevention, which includes real-time risk-based friction adjustment, customizable and embeddable components, and continuous AML monitoring.

This comprehensive solution provides better protection against synthetic identity theft and other forms of financial fraud.

With Footprint's triple binding identity approach, device attestation frameworks, and advanced detection of duplicate and synthetic identities, businesses can confidently onboard customers and prevent fraud.

To learn more about our KYC tools and fraud prevention solutions, visit our KYC tools page.

Best Practices and Recommendations

To combat synthetic identity theft, businesses and individuals should:

1. Implement robust identity verification processes: Use a combination of document verification, biometric identification, and database verification to ensure the authenticity of identities.
2. Monitor credit reports and scores regularly: Regularly review credit reports and scores to detect any suspicious activity or incorrect information.
3. Use advanced fraud detection tools: Leverage machine learning and artificial intelligence to identify patterns of behavior that may indicate fraudulent activity.
4. Collaborate with other industry partners and law enforcement: Share information and best practices to stay ahead of evolving threats and prevent synthetic identity theft.

Frequently Asked Questions

What is synthetic identity theft and how does it work?

Synthetic identity theft is a type of fraud where a real person's information is combined with fake data to create a new identity. This form of theft typically involves stealing a person's Social Security number (SSN) and combining it with fabricated information, such as a name, date of birth, mailing address, email account, and phone number. The new identity is then used to commit financial fraud, such as applying for loans, bank accounts, credit cards, and more, which can be detected through KYC tools and fraud detection tools.

What are the different types of synthetic identity theft?

There are three main types of synthetic identity theft:

1. Identity compilation: A fraudster steals a person's SSN and combines it with invented personally identifiable information.
2. Identity manipulation: A fraudster steals a person's personally identifiable information, alters it slightly, and attempts to pass it off as a new person.
3. Identity fabrication: A fraudster creates a totally false identity using bogus personally identifiable information.

What are the consequences of synthetic identity theft?

Victims of synthetic identity theft may experience negative judgments from late payments and defaulted loans, which can harm their credit scores. Legitimate information on their credit reports can be difficult and time-consuming to separate from the fraudulent information, highlighting the need for ongoing monitoring and fraud detection tools.

How can individuals protect themselves against synthetic identity theft?

To prevent synthetic identity theft, individuals can take several steps:

1. Secure your SSN: Keep your Social Security card at home in a safe place, and avoid repeating your SSN aloud within earshot of others.
2. Use digital security software: Consider a comprehensive suite of protective digital security software to protect your personal information and passwords, including multi-factor identification and data encryption.
3. Know the signs of phishing scams: Be cautious of unexpected communications from government agencies, banks, or financial organizations that lack specific information, such as your name and account number, which could be indicative of social engineering attacks.
4. Review your credit reports and monitor your credit scores: Regularly check your credit reports and keep tabs on your credit scores to detect any incorrect or unfamiliar information, which is a key part of Customer Identification Programs.

What is Footprint's solution to preventing synthetic identity theft?

Footprint offers an all-in-one onboarding solution with KYC and fraud prevention, which includes real-time risk-based friction adjustment, customizable and embeddable components, and continuous AML monitoring. This comprehensive solution provides better protection against synthetic identity theft and other forms of financial fraud.

What are the best practices and recommendations for combating synthetic identity theft?

To combat synthetic identity theft, businesses and individuals should:

1. Implement robust identity verification processes: Use a combination of document verification, biometric identification, and database verification to ensure the authenticity of identities.
2. Monitor credit reports and scores regularly: Regularly review credit reports and scores to detect any suspicious activity or incorrect information.
3. Use advanced fraud detection tools: Leverage machine learning and artificial intelligence to identify patterns of behavior that may indicate fraudulent activity, such as account takeover.
4. Collaborate with other industry partners and law enforcement: Share information and best practices to stay ahead of evolving threats and prevent synthetic identity theft.