The financial technology industry that’s upending consumer finance could be the solution to a kind of identity fraud that’s dogging traditional banks and fintech companies alike.
It’s called synthetic identity fraud, where instead of stealing one person’s information, criminals synthesize a false identity using information from many people — usually those unlikely to monitor their credit, like children, the elderly, prisoners or the homeless. Fraudsters then establish a credit history for the fake person over time until they can trick banks or financial technology companies into lending them money.