WASHINGTON—The Federal Reserve has released a new white paper on synthetic identity fraud in the U.S. payments system and how financial institutions can detect potential scams to prevent financial losses.
In the report, the Fed explains how synthetic identities are created with real, legitimate information combined with false information. The Fed also flags that fraudsters have gone as far as appearing in person with fake credentials and creating social media around their fake personas, reported NAFCU.
The Fed has also established a Fraud Definitions Work Group, which is developing a more consistent and holistic view of the terminology used and other ongoing efforts to reduce fraud risk and advance the safety security and resiliency of the U.S. payments system, NAFCU noted.
As the Fed works to develop a real-time payments system – the FedNow Service – both credit union trade groups continue to call for a national data security standard to supplement a safer and faster payments system.