What is the story about?
What's Happening?
Synthetic identities are created by combining real and fictitious information to generate new personas, leaving false digital footprints in social media and public records. These identities are used by bad actors to commit various types of fraud, unauthorized access, and other illegal acts. Fraudsters fabricate substantial and historical details to make synthetic IDs appear authentic, leveraging them to defraud businesses and individuals. Losses from synthetic identity fraud are estimated to be between $20 to $40 billion and growing.
Why It's Important?
Synthetic identity fraud poses significant risks to key sectors such as technology, financial services, and shipping, where customer and supplier interactions are typically established digitally. The complex nature of third-party supplier networks exacerbates vulnerabilities, making these sectors more prone to targeting by criminals using synthetic IDs. Addressing synthetic identity fraud requires improved identity verification processes and enhanced data security measures to protect against financial losses and maintain trust in digital platforms.
What's Next?
Organizations are encouraged to adopt a human/machine hybrid approach to identity verification, combining automation with AI-powered filtering and human analysts conducting enhanced due diligence. Improved identity verification, data security, and regulatory measures are crucial for maintaining trust and the integrity of financial systems and online ecosystems.
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