Toolkit Module 5: Validating Identities

Is the Customer Real or Synthetic?

A key challenge in detecting synthetic identities is that fraudsters can be adept at forging documents and creating public records using false identities. Fraud detection tools and solutions also can be evaded, as they are only as good as the data that trains them to detect fraud.

Fraudsters employ numerous tactics to pass identification requirements and make their fictitious identities appear real, including:

• Fabrication of identity documents (such as driver’s licenses, passports and state IDs)
• Enrollment in utilities or municipal services
• Creation of social media profiles for the fake identities

Validating identities beyond a customer’s name, date of birth, address and identification number offers an opportunity to help further mitigate the risk of a synthetic. With more information to verify, a more informed decision can be made about whether a person actually exists.

Identity validation tools include:

• Document verification
• Alternative data
• The Social Security Administration’s electronic Consent Based Social Security Number Verification (eCBSV) Service (Off-site)
• Digital information and user activity
• Technology solutions

Validating Identities Through Alternative Data

While it is important to verify an identity using primary elements, such as name, Social Security number and birthdate, using additional public and internet-based information – or “alternative data” – for identity validation can help financial institutions gain a higher level of confidence that the applicant is a real person.

“Identity proofing” is the process of triangulating data about an identity to help confirm the identity presented is legitimate and belongs to that individual. This includes verifying identity elements (e.g., in an application) and identity documents to help determine if those elements make sense for the identity.

What potential additional information might be reviewed to determine if an applicant is really a synthetic identity?

• Credit profile
• Public records
• Online profiles
• Internal data reviews

To avoid negative impacts and potential financial loss, organizations can leverage alternative data to increase their confidence that an applicant is real and not likely to be a synthetic identity.

Downloadable Resources

Explore these resources to learn more about validating identities.