Common Synthetic Identity Theft TacticsWhat Maneuvers are Scammers Using to Separate You From Your Revenue?
One Layer of User Validation Won’t be Enough to Stop Synthetic Identity Theft
Synthetic fraudsters blend real and fake information to generate what amounts to a fake persona. Masked behind a facade of someone who doesn’t actually exist, crooks open credit accounts, make purchases, take out loans, and even apply for government benefits or assistance.
It all sounds fairly simple. And, to some extent, it is; that’s one of the reasons crooks like it so well. And it all starts with stolen personally identifiable information (PII).
Once the real information is in place, there are a couple of ways to synthesize IDs: identity manipulation (the alteration of existing information), or identity compilation (combining elements of real data with fictitious details).
Identity Manipulation vs. Identity Compilation
Identity Manipulation
- Taking an actual identity and altering 2-3 details.
- Often an act of first-person fraud; a third party would need much more information than they are likely to have.
- Example: A person exaggerates their salary history to qualify for a loan.
- Relatively easy to detect.
Identity Compilation
- A “Frankenstein” identity created by combining bits of real data with fake details
- Third-party fraudsters often mix-and-match data from multiple sources.
- Example: A fraudster applies for a credit card using the phony ID.
Tactics Scammers Use to Commit Synthetic Identity Fraud
When we talk about synthetic identity theft, we’re mostly referring to identity compilation. Let’s look at a few of the tricks and tactics that third-party fraudsters employ to make synthetic IDs seem real:
Why More Scammers are Using AI to Faciliate Attacks
One of the more dangerous developments in the world of fraud is the addition of generative AI tools (GenAI). This is especially true when we’re talking about synthetic identity fraud.
It can take a while to come up with a workable synthetic persona. And, crooks may not always have the necessary data insights to evaluate why a specific persona works; what components helped them avoid detection.
There’s also the risk of duplication. To maximize profits, the criminal needs multiple synthetic IDs out there working. There’s a danger, however, of accidentally duplicating data – the same Social Security number for more than one name, for example. Not only will that probably negate both personas, it could draw unwanted legal attention.
Generative artificial intelligence can potentially solve all of these problems, and more. Sophisticated software can mix-and-match real data from various sources, generate and apply additional fictional details, test to see if the combination is usable, and even apply for credit in the fake identities’ names.
Fraudsters are using every technological trick they can to take your revenue.
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How is AI Used in a Synthetic Identity Theft Attack?
Successful attempts are analyzed for commonalities, with the results factored into future combinations. The computer can create thousands of potential identities in a fraction of the time needed for manual creation.
Through Gen AI, the fraudster can also automatically create phony backstories, complete with employment and income histories. They can set up and populate social media accounts with fake posts. Gen AI can even generate deep fake images that are good enough to fool liveness detection.
Can Scammers Make Long-Term Use of Synthetic Identities?
Not every synthetic identity is built around the bust-out. Another tactic is developing semi-permanent networks of interconnected fake identities. This can include multiple false IDs with bank accounts, credit cards, and more. Synthetic businesses and shell companies may also be established to give the bogus personas “employment” and work histories, as well as to hide some of the financial goings-on.
The fraudster will conduct dealings between their phoney identities and real businesses, but in a very non-suspicious manner. Purchases will be reasonable, payments will be met on time, and the merchandise sold to other personas or shell companies. Loans may be made with one bank and used to pay off loans from other banks. Everything is low-key, though, and designed to fly under the radar.
The idea here isn’t to make one big haul. Rather, the fraudsters want the machinery in place to move money around with the appearance of legality. Dirty revenue from criminal enterprises can be moved around and emerge as legitimate income to non-existent persons.
