Equifax has unveiled Synthetic Identity Risk, an advanced AI-driven solution designed to help businesses detect and prevent synthetic identity fraud a rapidly growing challenge that costs lenders millions each year. This next-generation fraud detection product employs sophisticated machine learning algorithms to uncover hidden fraud patterns that conventional methods often miss, allowing companies to flag potentially fraudulent activity before it impacts their financial performance.
Synthetic identity fraud arises when criminals combine elements of real identities with fabricated information to create new, fictitious profiles. Fraudsters then use these synthetic identities to open credit accounts or secure loans, only to default on payments later. Because these accounts often appear legitimate, they can go undetected for long periods, leaving lenders exposed to significant financial losses. According to Equifax, the average loss per identified synthetic identity is roughly $13,000, illustrating the magnitude of the risk.
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By leveraging patent-pending technology, Synthetic Identity Risk evaluates identity data, credit history, and behavioral patterns to determine the likelihood of synthetic activity. Businesses can apply the solution both at account opening, to prevent fraud before it occurs, and as an ongoing account management tool to continuously monitor for hidden risks within existing portfolios. This holistic approach enables organizations to make real-time, informed decisions about identity verification and fraud mitigation.
“Synthetic identity fraud is a rapidly growing threat impacting the consumer lending ecosystem,” said Felipe Castillo, Chief Product Officer for U.S. Information Solutions at Equifax. “With Synthetic Identity Risk, Equifax strengthens lenders’ fraud defenses, helping them to uncover hidden risks and ultimately shift from reactive loss recovery to proactive prevention. In doing so, they not only reduce their financial losses but they safeguard and build long-term trust with their legitimate customers.”
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Equifax emphasizes that early detection is critical, as synthetic identities can remain hidden for months or even years, compounding potential losses. By incorporating AI and machine learning, the new solution provides a dynamic, adaptive approach that continuously evolves alongside fraud tactics. Lenders benefit not only from reduced charge-offs but also from enhanced operational efficiency and improved confidence in their verification processes.
As synthetic identity fraud continues to grow in sophistication, Equifax’s launch of Synthetic Identity Risk positions businesses to stay ahead of emerging threats. By combining predictive analytics with real-time monitoring, the tool equips organizations with actionable insights, helping them protect both financial assets and customer trust while minimizing exposure to a threat that has historically been difficult to detect.
This strategic solution reflects Equifax’s commitment to innovation in identity verification and fraud prevention, empowering enterprises to take proactive measures against increasingly complex financial crimes.
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