Combating First-Party and Synthetic Identity Fraud

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White Paper

In an increasingly digital economy, financial services and telecom providers are experiencing more first-party fraud, where thieves acquire services or merchandise with no intent to pay. Crooks have become expert at exploiting lenders, banks, and telecom providers needing to simplify customer acquisition, add new customers, and automatically offer new benefits over time to trusted customers. 

Fraudsters are increasingly using synthetic identities to perpetrate frauds that exploit customer origination processes. This fast-growing scheme is going global and can be used to orchestrate large-scale breakouts. Sleeper networks of trusted accounts cultivated over time suddenly max out credit cards and loans, leaving no real identity behind to pay the bills. 

As awareness of first-party fraud’s scope improves, financial institutions are finding that as much as 30% of their bad debt is actually fraud. These debts are uncollectible because the borrowers, to whom they issued credit, never intended to pay and may have been nothing more than synthetic identities. 

As banks and telecom providers examine their customer-facing origination processes, they should do so with an eye toward defending against first-party and synthetic identity frauds. This white paper highlights what can be done differently to define, detect, and prevent first-party and synthetic identity fraud in origination processes and throughout the customer lifecycle. 

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