Synthetic Identity Theft: What is it and How to Combat it with Footprint's Cutting-Edge Technology

Synthetic identity theft is a type of fraud that involves creating a new identity by combining real and fake information. This type of theft is becoming increasingly common and can be difficult to detect. However, with Footprint's innovative approach to identity verification and onboarding, businesses can confidently prevent synthetic identity theft and reduce the risk of financial losses. This approach also ensures Know Your Customer (KYC) compliance.

What is Synthetic Identity Theft?

Synthetic identity theft is a type of identity theft where a thief creates a new identity by combining real and fake information. This can include using a real Social Security number with a fake name, address, and date of birth. The thief may also use fake identification documents, such as a driver's license or passport, to support the new identity.

How Does Synthetic Identity Theft Work?

Synthetic identity theft typically involves the following steps:

1. Gathering personal information: The thief collects personal information, such as Social Security numbers, dates of birth, and addresses, from various sources, including data breaches, social media, and public records. This is also known as Personally Identifiable Information (PII).
2. Creating a synthetic identity: The thief combines the real and fake information to create a new identity.
3. Building a credit profile: The thief uses the synthetic identity to apply for credit and build a credit profile.
4. Committing fraud: The thief uses the synthetic identity to commit fraud, such as applying for loans or credit cards, and then defaulting on payments.

Why is Synthetic Identity Theft a Problem?

Synthetic identity theft is a problem because it can be difficult to detect and can result in significant financial losses for individuals and businesses. The thief may use the synthetic identity to commit multiple types of fraud, including credit card fraud, loan fraud, and tax refund fraud. This highlights the importance of Anti-Money Laundering (AML) measures.

How to Detect Synthetic Identity Theft with Footprint

Detecting synthetic identity theft can be challenging, but Footprint's innovative approach makes it easier. With Footprint's triple binding identity approach, which verifies the person behind the screen, their device, and their phone number, businesses can ensure accurate identity verification and prevent synthetic identity theft.

Additionally, Footprint's platform includes:

1. Onboarding Controls: Fine-grained controls that enable businesses to require attestable user experiences, collect additional forms of identification, and perform enhanced device checks to ensure the human behind the computer is who they claim to be. This includes biometric authentication and knowledge-based authentication.
2. User Behavior and Device Insights: Automated suspicious behavioral analysis that detects anomalous behavior, such as typing hesitancy, copy-paste for sensitive fields, devices on bad reputation networks, and more.
3. Duplicate & Synthetic Fraud: Advanced detection of duplicate and synthetic identities, including selfie duplicate detection and identity data de-duplication.

How to Prevent Synthetic Identity Theft with Footprint

Preventing synthetic identity theft requires a multi-layered approach that includes:

1. Securing personal information: Secure personal information, such as Social Security numbers and dates of birth, to prevent thieves from accessing it. This includes implementing data encryption measures.
2. Implementing robust authentication processes: Implement robust authentication processes, such as two-factor authentication, to prevent thieves from using synthetic identities to access accounts.
3. Monitoring credit reports: Regularly review credit reports to identify any suspicious activity.
4. Using Footprint's identity verification services: Use Footprint's services that verify identities to detect and prevent synthetic identity theft.

Best Practices for Preventing Synthetic Identity Theft

To prevent synthetic identity theft, follow these best practices:

1. Use a reputable identity verification service, such as Footprint.
2. Implement robust authentication processes, including multi-factor identification.
3. Monitor credit reports regularly.
4. Secure personal information.
5. Educate employees on the risks of synthetic identity theft and the importance of Customer Identification Programs (CIP).

Why Footprint is the Leading Choice

Footprint is the leading choice for identity verification and onboarding due to its unique approach and innovative technology. With Footprint, businesses can:

1. Streamline Onboarding: Efficient and user-friendly onboarding experience that reduces friction and increases conversion rates.
2. Accurately Verify Identities: Robust and accurate identity verification process that prevents fraud and ensures compliance with KYC regulations.
3. Secure Data Storage: Seamless integration of onboarding with vaulting, enabling secure storage of sensitive user data.
4. Prevent Fraud: Advanced detection of duplicate and synthetic identities, preventing fraud and minimizing costs.

In comparison to other solutions, such as Persona, Onfido, and Alloy, Footprint stands out due to its customization, UX, and comprehensive protection. With Footprint, businesses can confidently onboard customers, prevent fraud, and ensure compliance, ultimately driving growth and success.

Frequently Asked Questions

What is synthetic identity theft?

Synthetic identity theft is a type of identity theft where a thief creates a new identity by combining real and fake information. This can include using a real Social Security number with a fake name, address, and date of birth. The thief may also use fake identification documents, such as a driver's license or passport, to support the new identity. Learn more about synthetic identities and how they're used.

How does synthetic identity theft work?

Synthetic identity theft typically involves the following steps:

1. Gathering personal information: The thief collects personal information, such as Social Security numbers, dates of birth, and addresses, from various sources, including data breaches, social media, and public records. This is often referred to as personally identifiable information (PII).
2. Creating a synthetic identity: The thief combines the real and fake information to create a new identity.
3. Building a credit profile: The thief uses the synthetic identity to apply for credit and build a credit profile.
4. Committing fraud: The thief uses the synthetic identity to commit fraud, such as applying for loans or credit cards, and then defaulting on payments. This is a form of account takeover fraud.

Why is synthetic identity theft a problem?

Synthetic identity theft is a problem because it can be difficult to detect and can result in significant financial losses for individuals and businesses. The thief may use the synthetic identity to commit multiple types of fraud, including credit card fraud, loan fraud, and tax refund fraud. In some cases, thieves may use deepfakes to create convincing fake identities.

How can I detect synthetic identity theft?

Detecting synthetic identity theft can be challenging, but using a robust identity verification service, such as one that offers Know Your Customer (KYC) solutions, can make it easier. This includes a triple binding identity approach, which verifies the person behind the screen, their device, and their phone number.

Additionally, the platform may include:

1. Onboarding Controls: Fine-grained controls that enable businesses to require attestable user experiences, collect additional forms of identification, and perform enhanced device checks. This can include document authentication and biometric authentication.
2. User Behavior and Device Insights: Automated suspicious behavioral analysis that detects anomalous behavior.
3. Duplicate & Synthetic Fraud: Advanced detection of duplicate and synthetic identities.

How can I prevent synthetic identity theft?

Preventing synthetic identity theft requires a multi-layered approach that includes:

1. Securing personal information: Secure personal information, such as Social Security numbers and dates of birth, to prevent thieves from accessing it. This is part of Customer Due Diligence (CDD).
2. Implementing robust authentication processes: Implement robust authentication processes, such as multi-factor identification and knowledge-based authentication, to prevent thieves from using synthetic identities to access accounts.
3. Monitoring credit reports: Regularly review credit reports to identify any suspicious activity.
4. Using a reputable identity verification service: Use a service that verifies identities to detect and prevent synthetic identity theft.

What are the best practices for preventing synthetic identity theft?

To prevent synthetic identity theft, follow these best practices:

1. Use a reputable identity verification service.
2. Implement robust authentication processes, including multi-factor identification and access controls.
3. Monitor credit reports regularly.
4. Secure personal information.
5. Educate employees on the risks of synthetic identity theft and the importance of Customer Identification Programs (CIP) and Anti-Money Laundering (AML) regulations.
6. Stay up-to-date with the latest KYC best practices and AML compliance requirements.