The percentage of synthetic identities among accounts opened by U.S. lenders for auto loans, bank credit cards, retail credit cards and unsecured personal loans reached an all-time high at the end of the first half of 2024, the credit reporting agency TransUnion said in a new report on fraud. As a result of the increase, lenders were exposed to $3.2 billion in potential losses, which is also an all-time high and 7% more than the end of the first half of 2023.
Synthetic identities among accounts opened rose 18% in 2024 compared to the previous year, according to the report. The total lender exposure to synthetic identities for auto loans had balances roughly double those of the bankcard sector, which ranked second among credit types analyzed.
TransUnion also found an increase in “credit washing,” which is a scam where criminals using synthetic identities attempt to wipe out negative information from an identity’s credit history by making a false claim of identity fraud. “These false credit report disputes could be made against accounts opened using a stolen consumer identity or synthetic identity, or unauthorized transactions on a consumer’s legitimate credit account,” according to the report.
