Synthetic identity fraud growth and prevention best practices detailed in white paper
Synthetic identity fraud (SIF) is not only the fastest growing type of financial fraud in the U.S., it is one of the most dangerous, according to a new white paper from Giact Systems.
“The Hidden Costs of Synthetic Identity Fraud” report suggests that organizations relying on static personally identifiable information (PII) to prevent fraud are susceptible to SIF attacks. BioCatch made a similar argument a year ago in arguing for the use of behavioral biometrics.
The credit card industry lost $6 billion to SIF in 2016, and since then exposures of customer data have increased dramatically, jumping by 126 percent from 2017 to 2018 to 446 million consumer records exposed.
Best practices to combat SIF, according to the white paper, include improving communication to ensure effective verification, knowing the SIF signs to watch out for, empowering employees with fraud prevention tools, and validating identity continuously, rather than just at enrollment.
“The problem with synthetic identity fraud is that it’s not just a ‘grab-and-go’ job – cybercriminals will build synthetic identities and foster them patiently over time to build credit. Once a certain credit threshold is reached, they strike – leaving businesses in the lurch,” says David Barnhardt, Chief Experience Officer, GIACT. “The attitude that businesses need to adopt on identity is one of ongoing, proactive monitoring. Relying on enrollment or biographical data alone to stop bad actors isn’t enough. Ongoing identity management – which includes the use of traditional and non-traditional data – throughout the lifecycle of the account is required to validate identity.”
Tsys recently launched a biometric authentication platform to prevent synthetic identity fraud.