Synthetic Identity Theft StatisticsExamining the Real Cost of Synthetic Fraud Attacks
Examining Synthetic Identity Theft Statistics & Broader Financial Impact
The financial impact of synthetic identity fraud spreads way the individual people whose data was used to create a synthetic profile. In fact, the statistics are sobering:
projected synthetic identity fraud losses by 2030.
Source: Mastercard
increased rate of synthetic identity fraud losses in the first half of 2024.
Source: TransUnion
average value of losses from synthetic identity fraud from banks.
Source: KPMG
estimated number Americans who have been victims of synthetic fraud in the past decade.
Source: FrankonFraud
synthetic identities which go undetected by financial institutions when new customer accounts are created.
Source: Reuters
children’s Social Security numbers are 51 times more likely to be used for synthetic identity thieves than those of adults.
Source: Carnegie Mellon University
data breaches occurred in the US in 2024.
Source: Identity Theft Resource Center
No one knows the eact cost of synthetic identity theft, but conservative estimates run between $20-$40 billion annually. The truth is that the losses are likely much greater; many banks write off synthetic identity scams as routine loan defaults, meaning those losses haven’t been factored into the grand totals.
Synthetic identity fraud has a massive impact. And with the exception of the fraudster, pretty much everyone involved becomes a victim.
How Consumers Get Hurt by Synthetic Identity Fraud
While synthetic identity fraud is not as comprehensive an attack as account takeover fraud, it can still clobber the victim’s good credit. The extent may vary, but both types of fraud rely on personally identifiable information (PII), and there are real people attached to whatever personal information is being used.
If a phony identity is created from a stolen Social Security number, any actions apparently taken by that persona are still attached to the true owner’s personal credit history. Even without a real name, an SSN (and its owner) could end up on the hook for loans and credit lines totalling thousands of dollars.
Those debts can be hard to remove, regardless of who actually committed the acts. What’s worse is that the victim often remains blissfully ignorant… sometimes for years before the scam gets uncovered. They may only learn the truth when debt collectors start calling.
A synthetic ID is like a dead weight on a victim’s credit score, impacting their entire financial profile. And, the longer that identity operates without being detected, the more damage will be done.
The Most Vulnerable People Make the Easiest Targets
As if the crime itself wasn’t bad enough, fraudsters are especially fond of picking on people who don’t frequently use credit or meticulously check their credit rating. The elderly, for example, are targets who may miss government benefits payments until the crime is discovered. Phony identities can also be used to apply for government loans and benefits, robbing individuals and businesses who truly need the funds.
Children are also easy marks, as they typically don’t have any type of credit history at all. They may not discover their PPI has been hijacked until they're old enough to apply for credit or a job. That’s when any fraudulent activity tied to their SSN will come to light.
More than Money Is at Stake
Financial institutions write off billions of dollars annually in loans to bogus customers and businesses. And you, the merchant, lose every dollar’s worth of goods sold to non-existent customers, even while opening the door to other potential losses, such as chargeback fees.
While most victims of synthetic identity fraud are rightfully concerned about losing money, there’s also the issue of what that money is being used for. A network of synthetic identities (including both fake individuals and shell companies) can be an ideal mechanism for laundering funds from illegal activities.
By shifting money between synthetic accounts, crooks can hide income from criminal activities, or evade taxes by using multiple fake identities as tax shelters. Even more frightening, they can secretly move that money out of the network, funneling it to other criminal enterprises. For example, capital from synthetic identities is a crucial funding source for operations like illegal drugs, human trafficking, and terrorism.
