Socure, the provider of artificial intelligence for digital identity verification, sanction screening, and fraud prevention, announced that it has eliminated 204,536 synthetic identities from the U.S. economy in 2023 to date.
The company’s Sigma Synthetic Fraud solution has reportedly “prevented more than $3 billion in fraud losses this year while doubling the company’s initial 100,000 commitment signifying just how omnipresent the problem has become.”
Synthetic identity fraud “combines stolen, manipulated and fabricated attributes, such as name, address, phone, date of birth, and Social Security number, to assemble an entirely new and fictitious identity to defraud financial institutions, fintechs, government agencies, and other enterprises.”
The Deloitte Center for Financial Services projects synthetic identity fraud “to generate at least $23 billion in losses in the U.S. by 2030.”
Bad actors use synthetic identities “to apply for loans, open multiple accounts, build up a positive credit score and steal government benefits, appearing to be good customers until cashing in by using up all available credit lines and disappearing.”
They’re also used for money laundering “through prepaid cards, gift cards and traditional bank accounts as “money mules” by transnational organized crime rings, moving illegally acquired funds while making tracing nearly impossible.”
Julie Conroy, Chief Insights Officer at Datos Insights, said:
“Socure’s pledge to eliminate 100,000 synthetic identities in 2023 was noble, but also ambitious. Achieving twice as many is a profound warning sign that this type of fraud is even more widespread than we had initially believed. Synthetic identities are everywhere and extremely difficult to detect, and the faster the industry acts the better chances we’ll have of weeding them out while avoiding monumental costs to the financial services ecosystem.”
While the company rooted out synthetic identities “from nearly 40 different industries, an overwhelming majority were found in the gig economy, small business banking, telecom, cryptocurrency and challenger banks.”
Johnny Ayers, founder and CEO of Socure, said:
“The Socure mission is to deliver the world’s most accurate and inclusive risk and identity verification solutions. Eradicating synthetic identity fraud is a key part of why we exist. These crimes not only drive billions of dollars in losses across the economy, but also contribute to unfathomable financial crimes including money laundering schemes used for human trafficking and illegal drug operations. While identifying malicious synthetic identity behavior has become more complex than ever before as consumers continue to grow their digital footprints, this year’s achievement is proof that our approach is working.”
Socure’s Sigma Synthetic V4 is said to be “the industry’s most accurate synthetic fraud solution, using advanced machine learning and diverse third-party and network feedback data to uncover anomalies and connect elaborate behavioral patterns linked to synthetic identity fraud.”
This leads to detection “before the fraudster can act nefariously within the financial ecosystem.”
The company’s newest model draws from diverse “Proof of Life” data sources “including property records, driver’s licenses, and educational data adding a new dimension of accuracy so organizations can confidently verify younger and immigrant demographics with a limited digital footprint.”