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Fed: Synthetic ID fraud cost US $6B in 2016
A post in NAFCU's Compliance Blog earlier this week flagged that synthetic identity fraud is "one of the fastest-growing types of identity theft and financial crime in the U.S.," and the Federal Reserve has now published its first white paper on the issue. Among the report's notable findings, the U.S. incurred $6 billion in synthetic identity fraud costs in 2016.
The Fed's white paper compiles insights from the central bank as well as industry experts. NAFCU's Cybersecurity and Payments Committee during its June meeting was briefed on the Fed's work related to synthetic identity fraud by Tim Boike, vice president of industry relations at the Federal Reserve Bank of Chicago.
Other key findings from the report include:
- between 2017 and 2018, the volume of personally identifiable information exposed in data breaches increased by 126%; and
- 20 percent of credit losses were attributable to synthetic identity fraud in 2016.
This white paper is the first in the Fed's Payments Fraud Insights series, which "will describe potential gaps in detection and mitigation approaches, as well as ideas and best practices to address the issue."
The Compliance Blog post from NAFCU Regulatory Paralegal Shari Pogach offers explanations of synthetic identity fraud and credit card bust-out schemes, and includes resources on how to prevent it. Read it here.
NAFCU has long been active with lawmakers on the issue of data security and was the first group after the massive 2013 Target data breach to call for a legislative solution to reform the nation's data security system. The association also works closely with the Fed on efforts to create a safer, faster payments system.