What is a synthetic identity?
When you hear the phrase ‘synthetic identity’ you may assume it means a persona that is fake or made up. You would be half right. Think about a synthetic diamond grown in a lab. Yes, it’s chemically engineered. It’s cheaper than a rock pulled from a mine. But it still actually exists, and sometimes it’s very tough to tell the difference.
A synthetic identity is one curated from pieces of real and fake information manipulated into one fraudulent stock character. Using social engineering, a fraudster will steal personally identifiable information (PII) from several victims. Usually they will steal a national identification number such as an American social security number (SSN) from victim A and an address from victim B. Then they sprinkle in some lies and by combining all this information together, a synthetic identity has been created.
How does synthetic identity fraud work?
A fraudster typically creates a synthetic identity to establish credit, this is the most common form of synthetic identity fraud. With their synthetic identity the fraudsters will open accounts and often times practice sound financial hygiene early on, increasing the devastation they can cause later with a higher credit limit. They can do this with multiple stolen social security numbers at once and eventually cause a major headache with thousands of dollars of fraudulent purchases that hurt a creditor and the owner of the stolen SSN, which is often times a child.
Yes, the main targets for these attacks are children. As they are unlikely to be building a credit story under 18 and their parents are equally unlikely to be checking their credit score, a child’s SSN is typically invoked in this scenario. It becomes a huge mess with the victims and the credit card companies. This also impacts the merchants who become subject to massive charge backs. Gartner, a global research and advisory firm, estimates that synthetic identities account for 80% of all credit card fraud.
As a stakeholder in any sort of e-commerce company, you clearly wouldn’t want to get caught up in this circus. So what can you do? You could protect yourself with a TeleSign data solution.
How can TeleSign protect you?
Your cell phone provider knows your name, address, birthdate, all the PII that helps prove that you are a real non-synthetic human. Through key global partnerships and a history of transactions, TeleSign has that information, too. By leveraging this info in addition to data science and machine learning, TeleSign makes sure everything matches and appears to be in order before letting a user onto your platform.
One could infer that a synthetic identity would fail one or more of these tests seeing as they are by design piecemeal. In the event that a data point doesn’t match what your carrier has on file, TeleSign will step in and stop the attack. By turning to TeleSign for mobile identity solutions, e-commerce companies, creditors and all other digital platforms can not only shield themselves from synthetic identity fraud but other social engineering attacks like those that are common with SIM Swap. The fraudsters will always be looking to stay one step ahead of you, so it is your job as a business owner to take all of the steps to protect yourself and your users. TeleSign makes this simple by making information work for you with our robust suite of data solutions.
TeleSign has been connecting and protecting online experiences for over 15 years. We support 21 of the 25 largest web properties in the world and we’re prepared to help you. Contact TeleSign now and learn more about how to keep your platform safe and your users real.