US Regulators Worried about the Rise in Synthetic Identity Fraud
Synthetic identity fraud, a financial crime in the USA, is on the rise. This has concerned the United State’s regulatory bodies as banks are struggling to fight the frauds and find new ways to tackle the new theft techniques that can steal the data of individuals.
There have been different estimations regarding the range of fraud but almost all show that the issue is growing. A report by Auriemma Group analyzed an information firm about the payments and loaning industry. It discovered that the USA lenders have faced the loss of $6 billion through synthetic identity fraud. Whereas, a consultancy called McKinsey has estimated that the frauds related to financial sectors account for ten to fifteen percent of the charge offs.
This growth in fraud has become a part of the United State’s government’s Paycheck Protection Program. People have been making synthetic identities to get loans from the program made to support those who have been most affected by the economic fragility due to pandemics.
Jim Cunha, a senior vice president of Federal Reverse Bank stated in a case study: “Synthetic identity fraud is not a problem that anyone organization or industry can tackle independently, given its far-reaching effects on the U.S. financial system.”
Bank regulators in the USA are concerned about synthetic identity theft and they have been working with different technology firms that can help them provide a more reliable identity verification solution.