Top 3 synthetic identity webcast questions
ID Analytics recently hosted a webcast, where we discussed trends in the evolution of synthetic identity fraud and advancements being made to address this rising threat. During the live presentation, we received questions from attendees regarding the new electronic Consent Based Social Security Number Verification (eCBSV) service and its potential impact on the problem of synthetic identities. As one of the companies selected for the initial roll out in June 2020, we are sharing our answers to the most common questions with our broader readership. We also address the impact of a potential economic downturn on fraud.
Q: Does the requirement for consent negate the value of the eCBSV service, since a fraudster using a synthetic identity can withhold consent?
A: As we understand it today, a financial institution (FI) could decline to continue the underwriting process if the applicant declined to provide consent for the eCBSV SSN verification. FIs may want to consider making consent an option that needs to be satisfied for the opening of new accounts, which will help to alleviate that problem.
Q: With eCBSV on the way, is there a need to adopt new synthetic solutions?
A: From ID Analytics’ perspective, eCBSV complements existing solutions such as ID Score® Synthetic. Our solutions specialize in evaluating every application that is received and isolating a small population of high-risk applications for step-up authentication. This is designed to help minimize the impact on the customer experience and the cost for additional review by identifying only those applications showing the highest risk. ID Score Synthetic requires that enterprises implement a process for verifying the identities on applications it assesses as high risk. This is where eCBSV comes in. Even though the eCBSV service has additional costs associated with its proposed use, FIs may likely only put consumers through the process whose applications show signs of synthetic identity fraud risk. When eCBSV is paired with solutions that provide indications of synthetic risk, that combination may enhance the customer experience and reduce synthetic fraud losses.
Q: Looking into the next few years, how do you see a potential economic downturn impacting the outlook on synthetics?
A: A recent ID Analytics blog post discussed the rise in “recession fraud risk,” which is committed by opportunistic fraudsters whose motivation is brought on by tough economic conditions. As mentioned in the post, first-party fraud and family fraud are two examples of fraud that tend to increase during an economic downturn, whereas synthetic fraud is more likely to be committed by fraudsters who will continue to target lenders and service providers regardless of economic conditions. However, because family fraud and first-party fraud are already on the rise, we may see a greater increase in those types of fraud if a recession does hit in the coming years. The economy could play a role in the outlook for synthetic fraud in the U.S. if other types of fraud begin to demand greater attention and leave risk managers with fewer resources focused on helping mitigate synthetic identities.
To get the full run-down of content and questions covered during the webcast, watch the on-demand version, Truth from Fiction: How Synthetics Will Continue to Evolve in 2020.