Federal Reserve releases Synthetic Identity Fraud Mitigation Toolkit to help businesses fight fraud

The Federal Reserve released a Synthetic Identity Fraud Mitigation Toolkit to provide financial institutions, consumers and businesses with an online repository of insights and resources on synthetic identity fraud.

“Synthetic identity fraud, where fraudsters create an identity out of pieces of real and/or fictitious information, continues to grow and resulted in an estimated $20 billion in losses for U.S. financial institutions in 2020,” said Jim Cunha, executive vice president, Federal Reserve Bank of Boston. “Following years of research and collaboration with fraud experts, the Fed is taking the next step to support the payments industry in its battle against synthetic identity fraud by developing this toolkit.”

The toolkit is designed to increase awareness about this type of fraud, enable the payments industry to better identify and fight it, and foster payments industry collaboration to improve synthetic identity fraud mitigation.

The initial release of the toolkit includes downloadable resources that focus on the following:

• Synthetic identity fraud: The basics – explains what synthetic identity fraud is, why you should care, and why fraudsters commit this type of fraud.
• How synthetic identities are used – describes what is hiding in your portfolio and how fraudsters use synthetics to commit fraud and increase their payouts.
• When synthetics become a reality – additional information on common synthetic use cases.
• Detecting a synthetic identity – provides tools to help colleagues and consumers identify and prevent synthetic identity fraud.

The second release of the toolkit later this year will expand on the insights and resources in the toolkit’s initial release with next-level strategies for validating identities and detecting suspected synthetic identity fraud.