Stopping the growing threat of synthetic ID fraud

Organisations are facing a big increase in sophisticated fraud, in particular Synthetic Identity Fraud (SIF).

SIF is one of the fastest growing threats, which sees criminals generating new, false identities using a combination of real, stolen and fake data – such as birthdates and addresses – which they then use to defraud businesses.

AI-powered tools are enabling the creation of synthetic identities at scale, and increasing the difficulty of detection. In fact, Juniper Research expects losses from organisations to surge globally from $23 billion in 2025 to $58.3 billion by 2030 – a rise of 153 per cent – driven in a large part by SIF.

Serious vulnerabilities due to outdated fraud prevention strategies within many businesses are becoming a major issue with the growth in synthetic identities, particularly as they expand their digital services.

Also, it’s important to bear in mind that for every £1 lost to fraud financial institutions spend substantially more to cover associated costs in fixing the issue and in potential fines from regulators, for example.

Source accurate customer data

The collection of accurate customer contact data is critical to supporting the effectiveness of the ID process and in preventing synthetic driven ID fraud. Obtaining accurate contact data supports everything from end-to-end fraud prevention to delivering simple ID checks. It also means that more advanced and costly techniques, like biometrics and liveness authentication, may not be required.

Check for deceased records and address changes

An ongoing issue is fraudsters exploiting inaccuracies in contact data to create fake identities and manipulate existing ones. In many cases synthetic identity fraud, as well as some other types of fraud, rely on outdated, inactive, or deceased identities – gaps that traditional fraud controls may overlook. By utilising National Change of Address (NCOA) data from the likes of the Royal Mail or the United States Postal Service (USPS), alongside deceased suppression data integrated into identity verification and customer onboarding workflows, organisations can proactively remove key entry points for fraudulent activity.

For instance, fraudsters commonly exploit legacy systems that don’t detect when a genuine customer has moved. This provides an opportunity to hijack mail redirection processes, intercept account credentials, or create accounts using partial or outdated address histories. Having access to NCOA files ensures the most up-to-date residential information is collected for customer records, reducing false positives in identity checks and preventing fraudsters from impersonating individuals.

Data quality begins with accurate address verification

In fact, having a consistently accurate, standardised address is the cornerstone of contact data quality, which is why address verification is so important. Once you have up-to-date customer addresses it’s much more straightforward to match and verify identities across numerous sources. Therefore, verifying the accuracy and legitimacy of an individual’s address should be the first stage in any identity related activity, with any differences between a claimed address and official records highlighting a potential fraudster.

Don’t forget that having access to validated mobile numbers and email addresses for customers is also crucial. Otherwise, vulnerabilities will become an issue. With outdated or invalid phone numbers and email addresses fraudsters can create synthetic identities which can help them to bypass identity verification and system safeguards.

Electronic ID verification (eIDV) is critical

A highly effective way to undertake ID verification is via an electronic ID verification (eIDV) tool. With these services “always on” they are able, in real-time, to cross-check the names and addresses – for proof of address – email addresses and phone numbers provided by prospective customers during remote onboarding. Just as importantly, they deliver a good customer experience while preventing fraud.

For best results source an eIDV platform with access to billions of consumer and business records from reputable sources around the world, such as government, utility and credit agencies. This ensures the delivery of efficient customer onboarding as part of an effective ID verification service, globally.

eIDV is significantly quicker, more accurate and cost effective for undertaking ID verification and stopping fraud than undertaking manual ID checks. It’s because this technology requires no additional staffing or training costs, and there’s no risk of human error.

Access a geolocation tool

Using a geolocation tool is also important to prevent the growing threat of synthetic ID driven fraud. It can validate whether an applicant’s physical location, via their IP address, aligns with the address and personal details they provide. For example, if an applicant for a service or product claims to reside in London but geolocation data from their mobile device reveals they are actually 5,000 miles away, this inconsistency is a significant red flag, and additional checks will be required.

An effective geolocation solution should accurately convert UK, European, and international postal addresses into exact latitude and longitude coordinates in real-time. This level of accuracy enables seamless data matching and enhanced fraud detection capabilities.

In summary

The growth in synthetic identity creation, powered by AI, is leading to a significant increase in fraudulent activity. It’s only with the appropriate combination of advanced data quality and eIDV technologies that organisations can mitigate this risk, protect customers, and maintain a strong competitive edge in an increasingly dynamic regulatory and digital landscape.