News Releases
ID Analytics Announces New Data Analysis Findings; Synthetic Identity Fraud Poses New Challenges
SAN DIEGO, CA, February 9, 2005—ID Analytics Inc., the Identity Risk Management technology company, today announced the results of its recent statistical research into the schemes used by identity fraud criminals, also known as "fraudsters". As announced last week by The Federal Trade Commission (FTC) in its annual report on consumer fraud, the number of "true name" identity theft cases, where an actual consumer victim is involved, again topped 9 million annually.
Drawing from its ID Network™, the nation's only real time identity fraud prevention system, ID Analytics' analysis of identity fraud attempts shows that "synthetic identity fraud," where the identity is fabricated, is becoming the new challenge for organizations exposed to fraud. Businesses are the primary victims of this form of identity fraud.
The research also found that:- Synthetic identities are more commonly used to commit identity fraud than true-name identities. Overall, synthetic identity fraud comprises 88.3 percent of all identity fraud events and 73.8 percent of the total dollars lost by U.S. businesses.
- Systems that rely on public record databases are generally capable of detecting, on average, 85 percent of synthetic identity fraud attempts and 72 percent of true-name identity theft attempts. Approximately 18 percent of total identity fraud attempts are not detectable using these systems.
- Fraudsters using synthetic identities to further their crimes typically employ the systematic manipulation of real Social Security numbers and create multiple variations of similar names across the numerous identities.
- Fraudsters committing financial crimes using synthetic identities tend to use those identities frequently as soon as they are created, victimizing numerous businesses across multiple industries. They then abandon the use of the identity completely, moving on to create other new identities.
- Fraudsters using synthetic identities like to substantiate those identities by attempting to open wireless subscriptions in the fake name.
- Those committing synthetic identity fraud tend to take a break after the winter holidays followed by a flurry of activities in early spring.
"Our research indicates that organized fraudsters creating synthetic identities pose a significant new threat to business," said Bruce Hansen, Chairman and CEO. "The good news is that they do in fact leave patterns of suspicious behavior, and that their behavior can be predicted by looking at how an identity behaves across multiple companies and across multiple industries. This type of real time visibility, along with our ability to understand subtle relationships between suspicious identity elements, enables our ID Network members to sift out synthetic identity fraud before losses occur and to meet our shared objective of outsmarting fraudsters."
ID Analytics conducted its statistical analysis on more than 300 million account applications received by its ID Network members from 2002 through 2004. ID Network members consist of the largest U.S. industry leaders from across the credit card, wireless and instant lending industries. The analysis includes applications received in face-to-face environments, such as in-store point-of-sale and retail branch, as well as faceless environments, including Internet, direct mail and telemarketing-sourced applications.
The ID Network, the first and only national system developed exclusively to manage identity risk, is fueled in real time by a steady stream of identity elements from these multiple industries, learning constantly as new elements appear on the network. To date, more than 102 million "events" such as new accounts, address changes, payments and requests for convenience checks have been evaluated for identity risk through this proprietary network.
For more information about ID Analytics, please visit www.idanalytics.com.
About ID Analytics, Inc.
ID Analytics is the Identity Risk Management company providing advanced analytic solutions that prevent identity fraud and manage identity risk across the customer lifecycle. ID Analytics' intelligent ID Network, the first and only real time national network built exclusively to manage identity risk, makes it possible for organizations to calculate the risk associated with an identity and balance identity risk against profit. The ID Network is in use daily by over half the credit and retail card issuer market in the US, as well as leading wireless and online consumer finance companies. To empower consumers and to help more organizations in more industries to fight identity fraud, ID Analytics has channel partners in the bankcard, credit reporting and retail banking industries.
ID Analytics is a registered trademark of ID Analytics, Inc. All other trademarks and registered trademarks are the property of their respective holders.
