Scammers Now Use And Nurture Fake Identities To Commit Fraud, A Research Reports

Researchers have warned about a potential multi-billion pound fraud that could hit the UK economy. According to the researchers, the scam could be championed by the three million “Frankenstein” identities formed by fraudsters out of both fake and real personal details.

LexisNexis bank, leading the research, looked at more than 72 million consumer profiles, and the firm discovered that 2.8 million of them could be susceptible to Frankenstein cloning”. They could be used to create new identities to commit high-value fraud and spoof credit checks from credit providers and banks.

Other Regions Are Also Experiencing High Levels Of Frankenstein Fraud

Apart from the UK, other regions face increased levels of systematic fraud. In the US, this type of fraud is already an issue, with businesses reporting an average $15,000 loss after each case of systematic fraud.

Following the research conducted by LexisNexis, the platform predicted that the fraud case could lead to the loss of £4.2 in the economy by 2027. However, it also stated that this massive loss can be prevented or curbed if companies start early to screen for the threat.

The research also discovered strong evidence of scammers using “systematic farms’ to gain illegal control of people’s funds.

While they use ‘systematic factories’ in urban locations, the scammers deploy ‘systematic farms’ in rural areas. They use these approaches to build up the credit scores of some systematic identities on a large scale as they prepare to strike.

For instance, a Chichester-based farm showed rental cottages that seemed to have 439 specialized identities that have been occupying the place for the past seven years. However, only 22 of the identities revealed evidence of real people living there. This means that they have generated over 400 fake identities that could be used for financial fraud.

It was released that the identities were creating hundreds of applications for credit, such as payday and short-term loans. It also showed that some farmers were connected to other farms hundreds of miles away.

Lexis News Has Warned Users To Be Proactive When Fighting Fraud

Identity fraud specialist at LexisNexis, Noreen Altaf, commented on the development. He stated that fraudsters do not place value on a synthetic ID. Since they do not have credit histories, the fraudsters have opted to play the long game.

The scammers start by building what seems to be a real credit profile for several months, which shows that the credit profile is a trusted one. This systematic nurturing of the profile makes the customer trustworthy to the lending organizations.

Since this fraud method is not visible to firms, it becomes difficult to prevent until it’s too late. The researchers have warned that organizations must find alternative and proactive means to identify these fraud types on time.