The Identity Arms Race

Zombies, Clones and Synths

Identity theft is a term understood by many. It involves a criminal assuming our identity to undertake activities such as open new lines of credit or to simply steal money from our bank accounts. According to Forbes, 69% of all fraud is identity fraud. Three popular techniques are employed by fraudsters to commit identity fraud: zombies, clones, and synths.

Clones

‘Clones’ are the most common type of identity thieves. By simply passing themselves off as their victim, they can take over bank accounts, open new lines of credit and draw benefits, until the victim or their bank becomes aware. Personal data which enables this, including Name, Address, DOB, Bank Account Details, and even PIN’s can be purchased on the dark web, as previously discussed.

Zombies

‘Zombies’ refers to the stolen identities of inactive (with regards to using credit, social security, etc) individuals. This inactivity could be due to an individual emigrating, or sadly, due to being deceased. In the UK, a National Insurance (NI) number is issued shortly after a birth is registered, released to the individual when they reach the working age. The combination of a name and NI is often sufficient to be accepted as identification, which can be built upon with other documentation to apply for driving licenses, bank accounts, credit cards and so on.

Synths

A synthetic identity is most commonly a partial identity which has been manipulated by the criminals to make it fit the criteria for getting a bank account, loan, insurance policy, housing, medical care, work or for other benefits.

For example, with insurance policies the identity may be changed in terms of age, location, claims experience or any details which will reduce the cost of insurance and/or qualify for cover. For bank accounts and credit, the focus may be more on adapting the income, occupation, expenditure, age, and profession.

In simple terms they take the good bits, remove anything adverse, and make it fit the fraud they are committing. It also means that the criminals can recycle stolen identities to sell on to other criminals.

Far less spoken about though is within the criminal underworld fraudsters create a completely synthetic identity from scratch. The professionals allow time to pass, so it can be ‘aged’ and used for future fraud. It has been estimated that there around 1 million such identities currently in use in the USA and 200,000 in the UK.

The fraudsters use both forms of synthetic identity to avoid the ‘Russian roulette’ of buying identities online, and then discovering that the associated credit rating is poor, limiting the potential for return on investment.

They often create associated fake email addresses, social media profiles and even applying for credit (which is normally rejected) to build up enough of a persona that they can then be successful accepted, by banks, online retailers etc. According to Forbes, around 20% of identity fraud is synthetic fraud. Insurers have also reported seeing rises in Ghost Broking involving synthetic accounts purchasing motor policies, urging consumers to be vigilant.

As we have become increasingly reliant on digital interactions, it is essential that you verify all aspects of an identity, and that they belong to a genuine person.

Peter Taylor is an accomplished and distinguished fraud expert and investigator. He begun his career with Greater Manchester Police, before obtaining the position of Head of Fraud for Major Loss Adjusters. Since founding a consultancy firm, Peter has expanded his areas of expertise and is a cross-industry specialist in and cybercrime and counter-fraud measures.

As Phronesis continues to expand, now offering our Mobile Identity and Fraud Prevention services directly to enterprise, we wanted to commission research into cybercrime, and the many facets within, to both add to our understanding, and to share with our growing network of partners, clients, followers, and of course to those who generally operate in the sector.

References: Synthetic Identity Theft Still Growing In Automotive, Just Not As Fast, TransUnion Says (forbes.com)