Synthetic ID Fraud a Growing Threat to Banks, Say Security Experts

By Brian Orsak

Security professionals are warning banks of an emerging type of identity fraud called synthetic ID theft that victimizes financial institutions directly rather than preying on their individual customers. Synthetic ID theft--whereby criminals create an ID using a mixture of stolen data and fictional information--is considered more difficult to identify than the theft of real identities. That's because the individuals whose information is stolen never become aware of the theft, according to Chris Jay Hoofnagle, a law professor with the University of California at Berkeley. Because few victims step forward to claim fraud, banks often write off the stolen dollars as...