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The Federal Reserve’s FedPayments Improvement launched the Synthetic Identity Fraud Mitigation Toolkit last week, which will be a great resource for an industry that’s still in the early stages of detecting, reporting, and defending against this threat. FiVerity remains a strong supporter of the Fed’s efforts to understand and combat SIF. This started with our participation in the development of a definition for this crime and includes our research into the size of SIF theft, which was leveraged for the Toolkit. 

The toolkit is broken down into four modules, including the basics of SIF, how synthetic identities are used, when synthetic identities become a reality and detecting SIF.    

Module 1  

In the first module, the Federal Reserve defines synthetic identity fraud. They then highlight contributing factors of SIF, including the use of SSNs as primary identifiers, data breaches, credit application processes, and limited verification of identities.  

The Fed provides downloadable resources including information on the definition of SIF, how synthetic identities are created, and why criminals turn to SIF to commit fraud.  

Module 2 

Module two looks at how synthetic identities are used. Specifically, the module dives into how synthetic identities support other nefarious activities like human and drug trafficking, and terrorist attacks.  

Downloadable content includes a quiz on SIF and pdfs on how synthetic identities are used to commit fraud and how fraudsters increase their payout.  

Module 3 

Next, module three outlines a timeline on SIF, highlighting the pandemic’s role in the rise of SIF with PPP (Paycheck Protection Program) loans.  

 Module 4 

Finally, in module 4, the Fed touches on how financial institutions can effectively detect SIF. This module highlights key factors to look out for in a credit application and includes an interactive exercise to see if readers can spot the synthetic identity.  

The payments industry has incurred major losses from SIF, but resources like this empower us to better understand and better fight synthetic identity fraud.  

Check out this valuable resource: https://fedpaymentsimprovement.org/synthetic-identity-fraud-mitigation-toolkit/ 

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