Announcements, Payments Security

Defining Synthetic Identity Fraud: Federal Reserve Launches Focus Group

The U.S. payment system faces dynamic, persistent and rapidly escalating threats as technological developments in cybercrime make it easier than ever to commit payments fraud. The Federal Reserve is taking an active role to help the industry understand and address some of these challenges as a leader and catalyst in the U.S. payment system – including the growing threat of synthetic identity fraud.

To educate the industry, help reduce fraud risk and advance the safety and security of the U.S. payment system, the Federal Reserve published three white papers on synthetic identity fraud from July 2019 to July 2020. During this time, the Fed spoke with more than 50 industry experts, who said differing definitions of synthetic identity fraud and multiple approaches to detection make it difficult to quantify the impact of this type of fraud on the U.S. financial system.

In response to this challenge, the Federal Reserve is launching a focus group of experts to create an industry-recommended definition of synthetic identity fraud and a suggested approach for voluntary industry application. The group will kick off its work in September and meet virtually over the next several months. Members of the synthetic identity fraud focus group are:

  • Aaron Brehove, Truist
  • John Buzzard, Javelin
  • Mike Cook, SentiLink
  • Lee Cookman, TransUnion
  • Jeffrey Feinstein, LexisNexis Risk Solutions
  • Toni Gillich, U.S. Government Accountability Office
  • Claire Le Gal, MasterCard
  • Jack Lynch, Payment Systems for Credit Unions (PSCU)
  • Stacey Nash, USAA
  • Donald Rebovich, CIMIP
  • Amy Walraven, Turnkey Risk Solutions
  • Greg Woolf, FiVerity (FKA Coalesce.ai)

A shared understanding of what constitutes synthetic identity fraud is expected to improve measurement, reporting and detection of synthetic identity fraud. In addition, common usage of this definition can allow broader comparison and analysis of data about synthetic identity fraud. It also may contribute to increased industry awareness of this type of fraud.

To stay up to date on the Federal Reserve’s payments improvement efforts, including this initiative, join our FedPayments Improvement Community and select “Payment Identity Management” at registration.

Any definition of synthetic identity fraud to be proposed by the focus group or accepted by the Federal Reserve is not intended to result in any regulatory or reporting requirements, imply any liabilities for fraud loss, or confer any legal status, legal definitions, or legal rights or responsibilities.

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