The Federal Reserve warns about synthetic identity fraud

Wednesday 11 December 2019 10:23 CET | News

Fraud Prevention and Online Authentication Report 2019/2020 The Federal Reserve has issued warnings about synthetic identity fraud and is expected to release a report in early 2020 outlining ways that financial companies can mitigate the problem.Fraud Prevention and Online Authentication Report 2019/2020

Synthetic identity fraud is a type of fraud where criminals synthesize a false identity using information from many people, and then establish a credit history for the fake person over time until they can trick banks or financial technology companies into lending them money.

Although most synthetic identity fraud affects credit card and loan products, person-to-person payment applications could be equally vulnerable, according to federal authorities who are monitoring the problem.

Artificial intelligence could help spot anomalies in customer behaviour patterns to detect the fraud, the Fed’s October 2019 report said. Fintechs are developing artificial intelligence and money laundering models to detect synthetic identity patterns in card and loan applications, among other product areas.

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Keywords: artificial intelligence, money laundering, AI, fraud prevention, fintech, fraud prevention, synthetic identity fraud, financial crime
Categories: Fraud & Financial Crime
Countries: United States
This article is part of category

Fraud & Financial Crime