Fake ID and ATO fraud rising say US firms

Real estate transactions involve significant amounts of money. It’s not surprising that 1 percent of transactions handled by title companies—third parties acting on behalf of lenders and buyers—involve a fake ID, according to Intellicheck. Similar percentages are also seen in physical banks, with customers presenting fake or expired IDs.

This is the reason that account takeovers are becoming the fastest-growing identity theft, Intellicheck’s CEO Bryan Lewis at a webinar hosted by data analytics company Pymnts.

The New York-based identity verification company claims that in 2023, it stopped more than US$400 million worth of transactions that could have ended up without profit thanks to its software preventing people from presenting fake IDs. Identity verification is also speeding up transactions for banks as there are fewer steps involved.

Intellicheck prevents fraud by verifying the authenticity of government-issued IDs such as driver’s licenses.

Lewis, however, warns that the market for digital IDs in the U.S. is still fragmented at the state level. The CEO has previously suggested that the expansion of mobile driver’s licenses (mDLs) will eventually turn them into digital ID credentials that are likely to be stored in and shared via digital wallets.

Synthetic identity fraud fastest growing fraud in 2023

Account takeovers have surpassed credit card fraud as the number one digital fraud between 2022 and 2023, according to new data from U.S. consumer credit reporting agency Transunion.

Synthetic identity fraud is also seeing a notable rise as the fastest-growing fraud type in 2023.

Synthetic identities, which normally involve a combination of real and fake data, are being used to enroll for government benefits and services, establish fake businesses and apply for licenses. All of this is used to establish and legitimize the fake identity, setting it up to be used in other fraud schemes.

“Synthetic identities are most associated with financial services where criminals often look to achieve either immediate access to money or to legitimize the fake identities by building credit history,” the agency says in its 2023 Public Sector Omnichannel Fraud report.

Transunion shares other data related to fraud in the report. According to the agency, data breaches reached a peak in 2023, increasing 15 percent year-on-year.

The surge was driven by an increase in third-party breaches. For the second year in a row, the highest number of breaches was reported in healthcare followed by education. With Social Security numbers and driver’s license numbers increasingly exposed, government agencies are met with challenges in identity verification, the report states.

Data breaches are also becoming more severe, enabling more identity fraud. In 2023, the average breach risk severity reached a record, increasing 11 percent year-on-year.

Public sector clients saw a 4.2 percent rise in suspicious digital transactions during last year. Some of this rise was fueled by the MOVEit breach, during which a reported 6 million public records were exposed in the U.S. state of Louisiana.

In December, Transunion published two reports covering identity fraud in e-commerce transactions and a financial consumer survey.

Article Topics

biometrics  |  digital identity  |  financial services  |  identity verification  |  Intellicheck  |  real estate  |  synthetic identity fraud  |  TransUnion