Deceptive Strategies: Fraudsters Manipulate Genuine IDs for Bank Fraud
Authorities apprehended four members of a fraudulent syndicate engaging in "Frankenstein" fraud, synthetic identity fraud. The suspects utilized valid IDs with authentic photos but filled with false information, deceiving banks into granting loans. The arrest occurred during an entrapment operation conducted by the NBI-Anti-Organized and Transnational Crime Division. The seized IDs displayed varying details such as names, birthdates, and addresses, shedding light on the elaborate nature of the fraud.
The term "Frankenstein fraud" refers to synthetic identities crafted from a combination of real and fake Personal Identity Information (PII), often sourced from data leaks or the dark web.
Like the creation of Frankenstein's monster, fraudsters carefully construct synthetic identities, typically pairing an easily obtainable Social Security number (SSN) with a false PII during the onboarding process – the initial interaction between a customer and a business. While the Frankenstein analogy is commonly used, considering Mary Shelley's alternative title, "The Modern Prometheus," may be more apt.
Fraudsters continuously evolve their tactics, incorporating stolen data from global breaches, often acquiring valid SSNs from the dark web. They may target vulnerable groups such as the deceased, homeless, or children, estimating millions of children falling victim to such schemes. Advanced attacks involve biometrics, with fraudsters using masks or synthetic documents to manipulate identity verification systems.
As a precautionary measure, the NBI emphasized the importance for financial institutions to maintain a high level of vigilance and stringency in conducting credit investigations with their clients.
Sources: https://www.gmanetwork.com/news/topstories/metro/890059/nbi-arrests-4-suspects-in-frankenstein-fraud-scamming-banks/story/, https://onfido.com/blog/frankenstein-fraud/