The Federal Reserve recently published the third white paper in its Payments Fraud Insights (Off-site) series, Mitigating Synthetic Identity Fraud in the U.S. Payment System (Off-site), to share how organizations – both individually and collectively – can approach mitigating synthetic identity fraud in payments.
A synthetic identity is created by using a combination of real information (such as a legitimate Social Security number) with fictitious information (which can include a false name, address or date of birth). Synthetic identities can behave like legitimate accounts and may not be flagged as suspicious when using traditional fraud detection models.
Our latest white paper highlights how no single organization can stop synthetic identity fraud on its own. Fraudster tactics continually evolve to stay a step ahead of detection, and it is imperative that payments industry stakeholders work together to share information and keep up with the threat. In addition to sharing information about trends, behaviors, threats and best practices, organizations can fight back by employing a comprehensive and multi-layered approach to mitigation.
The Federal Reserve began raising awareness and encouraging voluntary action on the growing problem of synthetic identity payments fraud in late 2018. Through primary and secondary research and industry dialogue, we seek to improve understanding of the issue, create a greater sense of urgency about addressing it and promote voluntary industry action to both identify and mitigate this type of fraud.
Be sure to read the Federal Reserve’s third Payments Fraud Insights white paper, Mitigating Synthetic Identity Fraud in the U.S. Payment System (Off-site). For more information on synthetic identity fraud, you can:
- Read the first two papers in the Payments Fraud Insights series. The first white paper (Off-site) outlines causes and contributing factors of synthetic identity fraud, and the second white paper (Off-site) focuses on detection methods.
- Watch our webinar (Off-site) with experts on the front lines investigating synthetic identity fraud.
- Obtain updates by including “Payment Identity Management” as a preference on your FedPayments Improvement Community profile (Off-site).
- Follow our FedPayments Improvement accounts on Twitter (Off-site) and LinkedIn (Off-site).