US banks racked up $20 billion in losses to synthetic identity fraudsters in 2020, according to new data from the Federal Reserve.
To help banks combat the crime, the Fed has released a Synthetic Identity Fraud Mitigation Toolkit to provide financial institutions, consumers and businesses with an online repository of insights and resources.
“Synthetic identity fraud, where fraudsters create an identity out of pieces of real and/or fictitious information, continues to grow,” says 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 initial release of the toolkit includes downloadable resources designed to increase awareness about this type of fraud and provide tools to help banks identify synthetic identities.
The Fed says a second release later this year will expand on the insights and resources in the toolkit’s initial iteration with next-level strategies for validating identities and detecting suspected synthetic identity fraud.