Synthetic Identities: The Hidden Threat to Your Online Business

When most business owners think about fraud, they imagine stolen credit cards, phishing scams, or account takeovers. But there’s a quieter, more insidious threat on the rise—synthetic identity fraud—and it’s costing businesses billions every year.

Unlike traditional identity theft, synthetic identities aren’t simply stolen—they’re manufactured. Fraudsters combine real data, such as a legitimate address or date of birth, with fake details like a fabricated name or a made-up Social Security or National Insurance number. Over time, these “people” establish credit histories, social media profiles, and even online shopping habits—making them almost indistinguishable from real customers.

Why Synthetic Identities Are So Dangerous

• Hard to Detect – Traditional fraud detection often looks for mismatches in personal data. But synthetic profiles are built to pass those checks.
• Long Game Approach – Fraudsters might nurture a synthetic identity for months or even years, making small purchases, paying them off, and earning trust before launching a high-value attack.
• Multiple Victims – The financial damage hits not only the targeted business but also the credit bureaus, banks, and genuine people whose personal details are partly used.
• Reputational Risk – If your customers perceive your business as a soft target for fraud, it erodes trust and customer loyalty.

Real-World Impact for Online Businesses

• Chargeback losses from purchases that appear legitimate at first.
• Inflated customer acquisition costs as fraudulent “customers” skew your marketing data.
• Account abuse in loyalty programs or referral schemes.
• Regulatory issues if your KYC (Know Your Customer) checks fail to identify fraudulent accounts.

Fighting Back with Smarter Detection

The key to combating synthetic identity fraud is moving beyond basic identity verification. That means:

• Cross-referencing multiple data points—email addresses, IP geolocation, phone numbers, and device fingerprints—not just names and IDs.
• Monitoring account behaviour over time, flagging unusual purchasing patterns or access locations.
• Partnering with dedicated fraud prevention services like Keepsafe, which leverage AI-powered risk scoring and real-time checks to spot anomalies before fraudsters can cash out.

Synthetic identities thrive in the blind spots of outdated verification systems. By upgrading your fraud detection strategies now, you not only protect your revenue but also safeguard the trust your business is built on.

Keepsafe helps businesses detect and block synthetic identities before they cause damage. In today’s digital economy, vigilance isn’t optional—it’s essential.