As of October 2024, the internet has reached a significant milestone. A total of 5.52 billion people worldwide are now connected, representing 67.5% of the global population. This widespread connectivity has revolutionized how we live and work, enabling us to conduct essential tasks from the comfort of our devices. From online shopping to digital banking, the internet has become an indispensable part of our daily lives. 

However, this digital age also brings forth new challenges, particularly in the form of cybercrime. Fraudsters employ various social engineering tactics to acquire personal information, including phishing emails and smishing attacks. As individuals and businesses increasingly rely on technology, it is crucial to be aware of these potential risks and take necessary precautions to safeguard personal information and business operations.

One of the most pressing threats is synthetic identity fraud, a sophisticated scheme where genuine information is combined with fabricated data to create a new, fraudulent identity. This synthetic identity can be used to open accounts, make fraudulent purchases, and more.  

In this article, we will delve into the intricacies of synthetic identity fraud, explore its far-reaching impact on businesses, and provide actionable insights to safeguard your organization from this insidious threat. 

What is synthetic ID fraud? 

Synthetic identity fraud is a sophisticated form of identity theft where criminals construct new, fictitious identities by blending real and fabricated personal information. This can range from pairing a genuine Social Security number with a fake name, address, and birth date to combining entirely fabricated personal data with a stolen photo from social media. 

The abundance of personal information on the dark web, such as email addresses and phone numbers, empowers fraudsters to construct synthetic identities that appear remarkably authentic. Once this synthetic identity is created, fraudsters can use it to open accounts, apply for credit, and make purchases, often racking up significant debt before disappearing. This type of fraud can be difficult to detect and can have serious consequences for both individuals and businesses. 

The rise of deepfake technology poses a significant challenge to detecting synthetic identity fraud, making it difficult to distinguish between genuine and fabricated personas.    

What is the impact of synthetic identity theft? 

The impact of synthetic identity fraud can be significant and far-reaching, affecting both individuals and businesses. Victims may have their credit scores negatively impacted, making it difficult to obtain loans, credit cards, or even housing. Resolving the issue can be a lengthy and frustrating process, requiring significant time and effort. 

Businesses can also suffer substantial financial losses due to fraudulent transactions, chargebacks, and write-offs. Synthetic identity fraud can damage a business's reputation, leading to loss of customer trust and regulatory penalties. 

Overall, synthetic identity fraud poses a serious threat to both individuals and businesses. It is crucial to implement strong identity verification measures and stay informed about the latest fraud trends to mitigate the risks associated with this type of crime. 

How to detect and prevent synthetic ID fraud? 

Detecting synthetic identity fraud requires a multi-faceted approach that leverages advanced biometric technology and robust document verification processes. As identity verification processes are the cornerstone of identity theft prevention in any industry, it is crucial to implement rigorous checks to ensure the authenticity of the presented documents and the legitimacy of the individual claiming the identity. 

Youverse's identity verification solution offers a powerful tool to combat synthetic identity fraud. With top-tier NIST performance and ISO 30107 compliance, it ensures the highest standards of accuracy and security. The hybrid liveness detection technology mitigates the risks associated with synthetic identity fraud, providing a strong layer of protection for your business and its customers. 

Book a demo and see it for yourself.