Synthetic identity fraud involves the creation of false identities by combining real and/or fictitious information to establish fraudulent accounts or conduct deceptive financial transactions. Unlike traditional identity theft, where an individual’s existing personal information is stolen, synthetic identity fraud fabricates entirely new identities. Perpetrators often use a mix of genuine and fictitious data, such as combining a real social security number with a fabricated name or address. The goal is to create an identity that appears legitimate to financial institutions, allowing fraudsters to open credit accounts, obtain loans, or engage in other financial activities without immediate detection. Synthetic identity fraud is challenging to detect because the identities involved may not correspond to real individuals, making it difficult for traditional identity verification methods to flag suspicious activities. This type of fraud poses a significant threat to financial institutions, businesses, and consumers alike.
Glossary Term1 min read
Synthetic Identity Fraud
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