Synthetic identities: How well are you reading the signals?

by Carmel Maher

Carmel Maher

For some lenders and service providers detecting synthetic identities might seem like an exercise in futility or perhaps even a lesson in fortune telling—how can they determine whether an applicant identity is real and predict future behavior when the signals aren’t always clear?

In the past few years several methodologies and signals have been associated with synthetics – notably credit piggybacking (authorized user abuse) and taking advantage of social security number randomization – in addition to other traits which could elevate concern, like the targeting of digital channels. As enterprises increasingly adopt solutions and rule-based strategies which target these supposed signals, ID Analytics wanted to better understand how ubiquitous these traits truly are among synthetic identities.

In the second installment of our ID:A Labs synthetic identity research series, All synthetic identities are not created equal: Examining purported synthetic signatures, we examined the variability in behavior among synthetics. What did we uncover? Our research revealed that more than 50% of synthetics do not exhibit one of the most commonly targeted signature traits of synthetic identities by solutions today.

Lenders don’t need a crystal ball to predict whether an identity is synthetic, but our analysis demonstrates how assessing only one signal associated with synthetic identities in isolation will fail to produce a holistic synthetic defense strategy. Read our full report, to learn more.

In case you missed it, part one of our series, Slipping through the cracks: How synthetic identities are beating your defenses, examined differences in behavior between synthetic identities and other types of fraudulent or high-risk credit applicants. This research demonstrated that because synthetics manifest themselves in multiple ways and often appear to be low risk, they are extremely effective at circumventing traditional fraud and credit risk defenses.

ID:A Labs continues to examine the evolving threat of synthetic identities, and the final chapter of our research series will delve into the validity of a more holistic approach for combatting synthetics which focuses on overall identity legitimacy and intention. To ensure you receive our research as soon as it is released, sign up for updates below.



Carmel Maher is the Product Marketing Manager for ID Analytics