Fraudulent activity has been on the rise, especially in the banking industry. Reports of identity theft increased by 113% from 2019 to 2020, resulting in losses of $712.4 billion in 2020—a 42% increase from 2019.
There are many ways to commit identity theft. Fraudsters may steal identities through packages, bank correspondence, unsecured websites, and public Wi-Fi networks. These people will use your information to make transactions as if you were the one who made it, like applying for credit, loans, and other acts that can damage your credit status.
Bad actors may have a variety of methods to obtain your information, but the best solution is awareness and prevention. To stop the prevalence of identity theft, you first have to understand what it is.
Identity theft has two types: regular identity theft and synthetic identity theft. It’s essential to know the difference between them to understand how they work.
What is synthetic identity theft?
Synthetic identity theft is a type of fraud wherein criminals combine real and fake information to create a new identity. The resulting bogus identity is usually used to open new accounts and make fraudulent transactions. It’s a growing problem that’s becoming more complex, more damaging, and more frequent.
How is synthetic identity theft different from regular identity theft?
Though these two types of fraud share similar goals, they have a few key differences. In regular identity theft, the criminal assumes the identity and information of an actual person to commit fraudulent acts and transactions. Usually, this can be easier to address once the victim becomes fully aware that their information is compromised. They can freeze their credit lines and authorize an investigation.
In contrast, synthetic identity theft involves a mix of real and fake information to create an entirely new identity that criminals can use to perform fraudulent activities. This is significantly harder to detect since fabricated personal data cannot be traced back to a real person.
How does synthetic identity theft work?
Fraudsters create synthetic identities using seemingly legitimate credentials mixed with false personal information. An example of this would be a synthetic identity having a “shippable” address; however, other personal details are invalid, such as the name, social security number, and birth date, because they don’t match with any one person.
Fraud can happen anytime, anywhere. The best way to protect your business is by taking the necessary safety measures, such as having better security in handling personal information. You can implement a solid and reliable system that will more securely manage data on a larger scale. Integrating identity authentication solutions will increase security and confidence within your organization.
Keep Your Identity Safe
Safe data handling is crucial in running a business. Whether you’re an organization or an individual, everyone is responsible for protecting information and preventing fraudulent activity from happening. There may be different ways to secure data, but the important thing is that you put all the necessary security systems in place, no matter how big or small.
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