You might be willing to loan a friend or family member a bit of money during hard times to help them recover from financial loss or the effects of a natural disaster. But would you loan them a piece of your sensitive personal information to enhance their financial footing?
One growing trend in cybersecurity fraud is the creation of synthetic identities - using pieces of personally identifiable information (PII) stolen from unsuspecting victims and meshed together to fabricate a new singular identity. Those identities are then used for a variety of fraudulent activities ranging from opening new credit accounts or loan applications to applying for housing relief or unemployment assistance.
“Synthetic identity fraud can be hard to identify because there is no single victim, rather an entirely new identity,” said Susan Koski, director of Security and Enterprise Response at PNC. “While financial institutions can contribute, consumers need to be ultra vigilant to monitoring their credit picture to notice when something doesn’t add up.”
Individuals are at an even greater risk of loss from synthetic identity fraud as PII, which can be used repeatedly, is compromised. Discovering that your information has been stolen and used for fraudulent accounts can also take time and be hard for consumers and families to remediate.
Identifying and stopping synthetic identity fraud is often hard for lenders due to the variety of PII available via online hacks and data breaches. Additionally, scammers can legitimize their false identity through patience and careful crafting of credit portfolios over extended periods of time.
To combat synthetic identity, the Federal Reserve recently commissioned a focus group of fraud experts to formally define the crime. The hope is that a standard definition will help lenders better identify synthetic identity trends and help consumers limit fraud.
“There’s so much information available out there to create fake identities. Consumers and the financial services industry need to work together to secure private information and limit what is accessible for criminals to exploit,” Koski said.
Consumers play a key role in safeguarding their own information and keeping it out of the hands of scammers. Consider the following tips to protect your information:
- Monitor your credit report – Regular checks of your credit report can reveal unknown accounts or credit checks done in your name.
- Limit the sharing of social security numbers – The social security numbers of you and your family members should be protected and shared only when absolutely necessary – especially online.
- Limit what you share in social media – Like your social security number; information like names, birthdates or photos also can be used by fraudsters to piece together a synthetic identity.
- Report any suspicious activity or unknown accounts immediately to your financial institution to limit financial loss or liability
Synthetic identity fraud is a growing scheme that is costing consumers and lenders billions annually. In an online and mobile-driven world, it can be hard to limit the amount of personal information available to scammers, but with collaboration on the part of banks, the government and ownership for responsible sharing of information on behalf of consumers, synthetic identity fraud can be prevented.
“We all need to be vigilant and share responsibility,” said Koski. “But together, we can limit the financial impacts of this fraud, discover better ways of identifying and preventing it and deter the criminals that perpetrate it.”