Identity Fraud
Identity fraud is the deliberate use of another person's identity, or the creation of a fictitious identity, to commit fraudulent acts. It can involve identity theft, impersonation, or the fabrication of synthetic identities.
Identity fraud is one of the most widespread and costly threats in the financial sector. It manifests in several forms: identity theft (using a victim's personal data without their knowledge), impersonation (pretending to be someone else using their documents), and synthetic identity creation (combining real and fictitious data to create an identity that does not exist).
The impacts of identity fraud are considerable: opening of fraudulent accounts, taking out loans in the victim's name, money laundering, tax fraud, and sanctions evasion. For businesses, it leads to direct financial losses, regulatory penalties, and reputational damage. For victims, it can cause lasting financial and psychological harm.
Combating identity fraud relies on a multi-layered approach: document verification (document authentication), biometric verification (face matching and liveness detection), data verification (consistency with official databases), and ongoing monitoring (behavioural anomaly detection after the relationship has been established).
Regulations
Real-world examples
- 1.A fraudster uses stolen personal data from a victim (name, date of birth, national insurance number) to open an online bank account and take out a consumer loan in their name.
- 2.A criminal network fabricates synthetic identities by combining real national insurance numbers with fictitious names, using them to obtain credit cards they never intend to repay.
- 3.An individual presents themselves at a solicitor's office with a third party's stolen passport to attempt to sell a property belonging to the victim. Biometric verification via face matching detects the imposture.