Financial Fraud

LUCKNOW—Synthetic identity fraud, a sophisticated form of financial crime, is on the rise, causing significant losses for banks and individuals. This type of fraud involves creating fake identities using a combination of real and fabricated information, such as stolen Social Security numbers and made-up names and addresses.According to Javelin Strategy & Research, synthetic identity fraud losses are expected to reach $20 billion by 2025. This type of fraud is particularly difficult to detect because the identities are often created from scratch, making it harder to link them to real individuals.How Synthetic Identity Fraud Works: Creating a Synthetic Identity: Fraudsters obtain real personal information, such as a UID/PAN/Social Security number, and combine it with fabricated information to create a new identity. Opening Accounts: They use the synthetic identity to open bank accounts, credit cards, and other lines of credit. Racking Up Debt: The fraudsters then use the accounts to make purchases and rack up debt. Disappearing Act: Once the debt becomes too high, the fraudsters simply abandon the accounts, leaving the banks to deal with the losses. The Impact of Synthetic Identity Fraud:Synthetic identity fraud is a serious problem for banks, as it can lead to significant financial losses. It can also damage the credit scores of innocent individuals whose information is used to create synthetic identities.How to Protect Yourself from Synthetic Identity Fraud: Monitor your credit reports regularly. Be careful about sharing your personal information online. Use strong passwords and two-factor authentication. Report any suspicious activity to your bank or credit card company.