Synthetic ID Scams Reveal the Dark Side of AI Technology

Last year, synthetic identity fraud scammed Americans out of around $20 billion. That’s up from $6 billion in 2015, and it makes it the most damaging form of identity fraud in the USA. Yet it doesn’t involve stealing your identity in the conventional sense. Synthetic identity fraud uses a mixture of real data, such as a genuine social security number, with fake identity information. And freeware AI apps are making the task easy.

Who really exists?

The This Person Does Not Exist face generator was one of the big hits of 2019. Every refresh would generate a new headshot - man, woman or child. Every one of them looks like someone you might bump into on the street, but none are real people. At the time, concerns were raised that this could have darker applications, for example among those perpetrating online dating scams or other forms of phishing.

Three years on, it’s no real surprise that the technology has developed further. Sites like don’t just provide a mugshot. It’s also accompanied by all the basic biographical data you might need, including name, date of birth, height, even favorite color. It’s the social engineering equivalent of a loaded gun - a fully automatic one with unlimited supplies of ammunition.

A range of frauds

The synthetic identities are used to perpetrate a wide range of frauds. For example, in 2020, Adam Arena and co-conspirators used a catalog of artificially created names combined with real social security references to apply for loans that they had no intention of repaying. Months later, Arena was at it again this time, this time using his fake IDs to make fraudulent claims on the government’s Paycheck Protection Program (PPP).

Arena is not the only perpetrator of this kind of crime. Other operators are believed to have literally thousands of fake IDs ready to be “primed” ie to start using for a few routine transactions, before “busting out,” ie talking out the maximum available credit and then defaulting. The average such “smash and grab” comes in at $13,000.

What next?

Frauds only evolve to become more sophisticated, just like technology. The AI tools that generate fake IDs are not going to disappear any more than the fraudsters who abuse them. Now, however, is the time to come up with controls to safeguard against such abuse - for example, if all these generators preserved the fake mugshots and IDs so that they could be reverse image searched, their value to scammers would evaporate overnight.

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