{"id":3621,"date":"2025-11-26T17:50:02","date_gmt":"2025-11-26T16:50:02","guid":{"rendered":"https:\/\/www.oneytrust.com\/?p=3621"},"modified":"2025-11-26T17:50:03","modified_gmt":"2025-11-26T16:50:03","slug":"synthetic-identities-the-invisible-fraud-that-costs-billions","status":"publish","type":"post","link":"https:\/\/www.oneytrust.com\/it\/synthetic-identities-the-invisible-fraud-that-costs-billions\/","title":{"rendered":"Synthetic identities: the invisible fraud that costs billions"},"content":{"rendered":"

What is a synthetic identity?<\/strong><\/p>\n\n\n\n

Unlike traditional identity theft, where the fraudster steals an entire real identity, a synthetic identity is a hybrid combination<\/strong>. It combines authentic data<\/strong> (in the United States, this is the social security number, while elsewhere it is usually the national identity document, date of birth and postal address) with invented information<\/strong> (usually contact details). This combination creates a seemingly coherent profile, especially when only the so-called authentic data is verified\/analysed (as in a banking KYC process, for example).<\/p>\n\n\n\n

As a result, traditional systems, which are often calibrated to validate an identity by digitising traditional practices (\u2018your papers, please\u2019), miss the mark.<\/p>\n\n\n\n

Why institutions are vulnerable ?<\/strong>
Fraudsters exploit the trust placed in partially accurate data. In the United States, with a valid official ID or minimal credit history, synthetic identities pass the initial verification stages. The fraudster can then \u2018mature\u2019 their identity<\/strong>: open a bank account, take out small loans, make regular payments\u2026 until they obtain a solid credit rating. This patience pays off: once credibility is established, the fraudster takes out a larger loan and then disappears. This is known as \u2018bust-out fraud\u2019.<\/p>\n\n\n\n


The cost is considerable: across the Atlantic, synthetic identity fraud already accounts for several billion dollars in losses each year, according to estimates by major firms. In Europe, the figures are beginning to follow the same trend, particularly with the rise of 100% digital processes.<\/p>\n\n\n\n

The limitations of traditional approaches<\/strong>
Traditional controls \u2013 document verification, historical scoring, ad hoc analysis of events or transactions \u2013 struggle to detect these hybrid profiles. Weak signals (email username, telephone number attributes, presence of \u2018digital footprints\u2019) can only be detected through rare expertise. Furthermore, current regulations focus almost exclusively on KYC compliance. However, control and fraud prevention are two distinct things. The former encompasses all the characteristics\/steps that allow access to a service\u2026 but because all of this is exposed, it also makes it possible to understand and therefore circumvent the measures.<\/p>\n\n\n\n

Towards a new approach to detection<\/strong>
Faced with this threat, companies must change their paradigm. The future lies in solutions capable of:<\/p>\n\n\n\n