As synthetic identity fraud grows, new research shows ways to help spot it.
Synthetic identities are created by combining real information, such as a Social Security number, with phony data, including home address and birthdate to simulate authentic consumer behavior.
The TransUnion study found that the cost of such fraud is becoming a major burden, U.S. lenders under $3.3 billion in exposure last year alone.
The consumer credit reporting agency shared particular data points that can help automotive and other lenders nip synthetics in the bud. It advises doing deep data dives to identify potential frauds instead of using only traditional methods.
An overarching caution TransUnion points out is the fact that synthetic identities don’t follow any one pattern but can take various forms, so telltale signs can help make sense of the mazes fraudsters create with their seemingly low-risk profiles.
Certain traits present increased risk of synthetic identity, TransUnion found. They include no vehicle registrations or known relatives occurring in 30% to 50% of synthetics, making a file with those characteristics up to seven times more likely to be synthetic over real identities.
No vehicle registrations, voter registrations or property ownership are other major warning signs, while 100% of synthetic files show no open bankruptcies.
“By isolating and evaluating these elements, organizations can strengthen their ability to differentiate between real and synthetic identities with greater precision,” TransUnion Global Head of Fraud Steve Yin said in its report on synthetic IDs.
The company advises the use of sophisticated data-assessment technologies to sift through customer information that include its own tool.
