Synthetic identity fraud is a group scam that uses a completely or partially fake identity. Fraudsters fabricate identities to obtain lines of credit, then diligently pay their bills over long periods. Once the credit reaches the respective limit, fraudsters max out using all available credit and proceed to disappear. Synthetic identities can be difficult to catch early as these fraudsters demonstrate all the behaviors and characteristics of a normal customer.
The growth rate of synthetic identity fraud predicted for the next few years is 53% per year.1 It is a key concern for financial services executives. They are seeing the increasing intensity of attacks, particularly on small business accounts. In the case of small businesses, the lines of credit extended are of course greater than consumer accounts. This means that fraudsters can get a far bigger return when they finally cut loose. Aite-Novarica Group estimates that synthetic identity fraud for unsecured credit products in the US totaled $1.8 billion in 2020 and estimates that it could reach up to $6 billion by 2025.
It's important to apply tools in a way that maximizes detection effectiveness while also minimizing costs. Organizations have the challenge to protect both their customers and their business from fraud. The increasing growth of digitalization leaves companies vulnerable to criminals. This requires organizations to be innovative when it comes to security and fraud prevention. Residual fraud remains a difficult area to solve as it requires extensive fraud knowledge and the ability to detect in real time. Don't fight it alone. Join Bleckwen and protect yourself against fraud that you haven't even seen yet.
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