Synthetic identity fraud, where fraudsters create an artificial identity out of multiple pieces of real and fabricated data, resulted in $20 billion in losses for U.S. banks and financial institutions in 2020, according to a new report from software company FiVerity.
Financial institutions using legacy identity verification systems are missing between 85% and 95% of likely synthetic identity fraud, FiVerity said. The report also found that fraudsters can take as long as 18 months to build up their credit before they strike and that the average synthetic identity fraud profile successfully steals between $81,000 and $97,000.
In the past three years, according to the report, a series of data breaches has exposed 3.4 billion personally identifiable information elements. “The sheer amount of exposed data has turned personally identifiable information into an affordable commodity. On the dark web, criminals can purchase a Social Security number for as little as $1, or a driver’s license for $20,” the report said.