We have selected announcements, relevant news articles and white papers from various sources to provide a more in-depth background of First Party Fraud. They are intended to provide real life examples of these types of activities and the risks businesses may encounter.
News & Announcements
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July 26, 2017 - GAO-17-708SP Report
The U.S. Government Accountability Office publish GAO-17-708SP, a report to Congress.The following is an excerpt from the GAO Highlights.
Why GAO Convened this Forum
According to experts, SIF has grown significantly in the last five years and has resulted in losses exceeding hundreds of millions of dollars to the financial industry in 2016. A key component of synthetic identities is SSNs—the principal identifier in the credit reporting system. There are many questions about SIF; the threat it poses to the financial system, government programs, and national security; and the most effective partners and methods for combating SIF.
GAO convened and moderated a diverse panel of 14 experts on February 15, 2017 to discuss: how criminals create synthetic identities; the magnitude of the fraud; and issues related to preventing and detecting SIF and prosecuting criminals. With assistance from National Academy of Science, GAO selected panelists (private sector and government) based on their publications, referrals from other experts, and their specific skills and knowledge of SIF. The viewpoints in the report do not necessarily represent the views of all participants, their organizations, or GAO. GAO provided participants the opportunity to review a summary of the forum and incorporated their comments as appropriate.
April 2, 2015 - TRS and IBM partner on Synthetic Identity Fraud whitepaper . . .
IBM and Turnkey Risk Solutions (TRS) have combined their expertise to analyze and provide solutions to help mitigate losses in multiple industries. The IBM Counter Fraud Management tool is a single next-generation integrated solution that addresses all phases of enterprise counter fraud. The TRS team is widely acknowledged throughout the financial services industry and by US federal and local law enforcement agencies as subject-matter experts for first-party fraud. Figmentum is our premier solution suite, which contains algorithms that target organized fraudulent behaviors throughout the customer lifecycle.
March 2, 2015 - TRS receives WBENC national certification . . .
Turnkey Risk Solutions, a business specializing in First Party Fraud Solutions, received national certification as a Women’s Business Enterprise by the Women’s Business Enterprise Council PA-DE-sNJ, a regional certifying partner of the Women’s Business Enterprise National Council (WBENC).
WBENC’s national standard of certification implemented by the Women’s Business Enterprise Council PA-DE-sNJ is a meticulous process including an in-depth review of the business and site inspection. The certification process is designed to confirm the business is at least 51% owned, operated, and controlled by a woman or women.
The Women’s Business Enterprise National Council is the nation’s largest third party certifier of businesses owned and operated by women in the United States. WBENC is a resource for more than 700 US companies and government agencies that rely on WBENC’s certification as an integral part of their
The articles listed below represent a small cross section of relevant press releases for First Party Fraud and the impacts associated within multiple industries. These articles were selected to illustrate that even though First Party Fraud has become the new buzz word it has existed for many years. Due to the lack of accurate identification and controls it has become persistent and pervasive.
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First Party Fraud . . .
The “Customer” is the perpetrator of the fraud and the business is the victim.
BUST OUT - A fraud scheme where the “Customer” intends to maximize the amount of loss to a business; frequently going significantly over the credit limit.
- Fifteen Charged in ‘Bustout’ Scheme That Cost Victim Banks More Than $15 Million - The Federal Bureau of Investigation
- Transcontinental crime ring broken up, Pinellas authorities say - Tampa Bay Times
- Queens man sentenced in $200,000 in credit card "bust out" scam - U.S. Immigration and Customs Enforcement
- Jackson Heights Variety Store Owner Masterminded $6.8 Million Credit Card Fraud and Money Laundering - Queens District Attorney's Office
CREDIT REPAIR - “Customer” is intentionally manipulating their credit history in an effort to hide from bad credit.
- Three Men Indicted In $2.5 Million Fraud Scheme Using Stolen Social Security Numbers - United States Department of Justice
- Participant In Multi-Million Dollar Fraudulent Credit Repair Scheme Sentenced - United States Department of Justice
SYNTHETIC IDENTITIES - An identity that is fabricated leveraging a valid Social Security Number (SSN) and combining it with fictitious Personal Identifying Information (PII)
- Suspected terrorist links to synthetic ID fraud are being 'ignored' - CBC News
- How 'synthetic' identity fraud costs Canada $1B a year - CBC News
- More defendants plead guilty in massive, $200M credit card fraud - nj.com
- 18 charged in $200M credit card fraud scam that created 7,000 new identities - nj.com
- The Borrower Who Never Was - The Wall Street Journal
REPUTATIONAL RISK . . .
These articles are examples of potential implications of First Party Fraud
ANTI-MONEY LAUNDERING (AML)
CHILD ID THEFT
- Report on Child ID Theft Attempts to Raise Awareness on Vital Issue - Carnegie Mellon University CyLab
- Scam traffic's in kids' social security numbers - NBC News
KNOW YOUR CUSTOMER (KYC)
- Banks 'must go beyond box-checking' for successful KYC operations - Bureau Van Dijk
IMPACTED INDUSTRIES . . .
These articles are examples of some of the costs associated with First Party Fraud.
- Flawed Social Security data say 6.5M in US reach age 112 - Associated Press
- Improper payments by federal agencies reach a record $125B - Associated Press
- International crime ring stole millions from Medicare - Dayton Daily News
- Fraud and Organized Crime Intersect Eurasian Enterprise Targeted - The Federal Bureau of Investigation
- Thieves are targeting your child's Social Security Number - 19 Action News
- Businesses are Also Synthetic ID Theft Targets - SecureWorld
- The $272 billion swindle - Why thieves love America’s health-care system - The Economist
- Using Big Data to Stop Fraud in its Tracks - A Smarter Planet Blog
- A $250 Million Fraud Scheme Finds a Path to Brighton Beach - The New York Times
- 57% of Insurers Say Personal Lines Insurance Fraud Losses to Rise in 2013 - Claims Journal
- Investigating Insurance Fraud - A $30-Billion-a-Year Racket - The Federal Bureau of Investigation
Synthetic identity fraud: Can I borrow your SSN? Who else might be using your Social Security number and why?
This paper is a primer for understanding synthetic identity fraud. It defines synthetic identity fraud, describes its evolution, explains how it works and what the identities are being used for, identifies the industries being impacted and shows who is most commonly targeted and why. It also highlights some of the challenges and the ramifications associated with this fraud type.