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synthetic ID fraud
AI tools Cyber Security Financial Loss Identity Fraud KYC SSN synthetic ID fraud

How Synthetic Identity Fraud is Draining Businesses


 

Synthetic identity fraud is quickly becoming one of the most complex forms of identity theft, posing a serious challenge to businesses, particularly those in the banking and finance sectors. Unlike traditional identity theft, where an entire identity is stolen, synthetic identity fraud involves combining real and fake information to create a new identity. Fraudsters often use real details such as Social Security Numbers (SSNs), especially those belonging to children or the elderly, which are less likely to be monitored. This blend of authentic and fabricated data makes it difficult for organisations to detect the fraud early, leading to financial losses.

What Is Synthetic Identity Fraud?

At its core, synthetic identity fraud is the creation of a fake identity using both real and made-up information. Criminals often use a legitimate SSN paired with a fake name, address, and date of birth to construct an identity that doesn’t belong to any actual person. Once this new identity is formed, fraudsters use it to apply for credit or loans, gradually building a credible financial profile. Over time, they increase their credit limit or take out large loans before disappearing, leaving businesses to shoulder the debt. This type of fraud is difficult to detect because there is no direct victim monitoring or reporting the crime.

How Does Synthetic Identity Fraud Work?

The process of synthetic identity fraud typically begins with criminals obtaining real SSNs, often through data breaches or the dark web. Fraudsters then combine this information with fake personal details to create a new identity. Although their first attempts at opening credit accounts may be rejected, these applications help establish a credit file for the fake identity. Over time, the fraudster builds credit by making small purchases and timely payments to gain trust. Eventually, they max out their credit lines and disappear, causing major financial damage to lenders and businesses.

Comparing Traditional VS Synthetic Identity Theft

The primary distinction between traditional and synthetic identity theft lies in how the identity is used. Traditional identity theft involves using someone’s complete identity to make unauthorised purchases or take out loans. Victims usually notice this quickly and report it, helping prevent further fraud. In contrast, synthetic identity theft is harder to detect because the identity is partly or entirely fabricated, and no real person is actively monitoring it. This gives fraudsters more time to cause substantial financial damage before the fraud is identified.

The Financial Impact of Synthetic Identity Theft

Synthetic identity fraud is costly. According to the Federal Reserve, businesses lose an average of $15,000 per case, and losses from this type of fraud are projected to reach $23 billion by 2030. Beyond direct financial losses, businesses also face operational costs related to investigating fraud, potential reputational damage, and legal or regulatory consequences if they fail to prevent such incidents. These widespread effects calls for stronger security measures.

How Can Synthetic Identity Fraud Be Detected?

While synthetic identity fraud is complex, there are several ways businesses can identify potential fraud. Monitoring for unusual account behaviours, such as perfect payment histories followed by large transactions or sudden credit line increases, is essential. Document verification processes, along with cross-checking identity details such as SSNs, can also help catch inconsistencies. Implementing biometric verification and using advanced analytics and AI-driven tools can further improve fraud detection. Collaborating with credit bureaus and educating employees and customers about potential fraud risks are other important steps companies can take to safeguard their operations.

Preventing Synthetic Identity Theft

Preventing synthetic identity theft requires a multi-layered approach. First, businesses should implement strong data security practices like encrypting sensitive information (e.g., Social Security Numbers) and using tokenization or anonymization to protect customer data. 

Identity verification processes must be enhanced with multi-factor authentication (MFA) and Know Your Customer (KYC) protocols, including biometrics such as facial recognition. This ensures only legitimate customers gain access.

Monitoring customer behaviour through machine learning and behavioural analytics is key. Real-time alerts for suspicious activity, such as sudden credit line increases, can help detect fraud early.

Businesses should also adopt data minimisation— collecting only necessary data—and enforce data retention policies to securely delete outdated information. Additionally, regular employee training on data security, phishing, and fraud prevention is crucial for minimising human error.

Conducting security audits and assessments helps detect vulnerabilities, ensuring compliance with data protection laws like GDPR or CCPA. Furthermore, guarding against insider threats through background checks and separation of duties adds an extra layer of protection.

When working with third-party vendors businesses should vet them carefully to ensure they meet stringent security standards, and include strict security measures in contracts.

Lastly, a strong incident response plan should be in place to quickly address breaches, investigate fraud, and comply with legal reporting requirements.


Synthetic identity fraud poses a serious challenge to businesses and industries, particularly those reliant on accurate identity verification. As criminals become more sophisticated, companies must adopt advanced security measures, including AI-driven fraud detection tools and stronger identity verification protocols, to stay ahead of the evolving threat. By doing so, they can mitigate financial losses and protect both their business and customers from this increasingly prevalent form of fraud.


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Ransomware
BlackSuit Customer Data Data Breach Data Leak Financial Loss Ransomware

Private Data of 950K Users Stolen in BlackSuit Ransomware Attack

 

On April 10, 2024, a BlackSuit ransomware assault disclosed 954,177 personally identifiable information, forcing Young Consulting to send out data breach notifications. 

Young Consulting (formerly Connexure) is an Atlanta-based software solutions provider that specialises in the employer stop-loss marketplace. It helps insurance carriers, brokers, and third-party administrators manage, market, underwrite, and administer stop-loss insurance policies.

Earlier this week, the company began notifying nearly a million individuals about a data breach. Among them are Blue Shield of California subscribers whose data was stolen during a ransomware campaign carried out by BlackSuit earlier this year.

The network intrusion occurred on April 10, but the company only noticed it three days later when the perpetrators triggered the encryption of its systems. The subsequent investigation was completed on June 28, finding that the following information had been hacked: full names, Social Security numbers (SSNs), dates of birth, and insurance claim details. 

Those affected will receive free access to Cyberscout's 12-month complimentary credit monitoring service, which they can claim until the end of November 2024. 

According to security experts, potentially affected individuals should take full advantage of this offer immediately, as BlackSuit has already disclosed the stolen information on its darknet-based extortion portal. 

Users should also keep an eye out for unknown communications, phishing messages, fraud efforts, and requests for more information. The attackers claimed responsibility for the attack on Young Consulting on May 7. They followed through on their threats to publish the stolen data a few weeks later, most likely after failing to extort the software company. 

BlackSuit claimed to have leaked far more than what Young Consulting disclosed in notices to affected individuals, including business contracts, contacts, presentations, employee passports, contracts, contacts, family details, medical examinations, financial audits, reports, and payments, as well as various content from personal folders and network shares. 

BlackSuit's operations this year have resulted in enormous financial losses for American businesses, the most notable being the CDK Global outage. Earlier this month, CISA and the FBI claimed that BlackSuit is an updated version of Royal ransomware that has demanded over $500 million in ransom over the last two years.
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Technology
Artificial Intelligence Businesses Deep Fakes Financial Loss Scotland Technology

Why AI-Driven Cybercrime Could Be Your Business's Biggest Risk


 


The way technology keeps shifting its paradigm, the line between genuine interactions and digital deception is becoming increasingly difficult to distinguish. Today’s cybercriminals are leveraging the power of generative artificial intelligence (AI) to create more closely intricate and harder-to-detect threats. This new wave of AI-powered cybercrime represents a humongous challenge for organisations across the globe.

Generative AI, a technology known for producing lifelike text, images, and even voice imitations, is now being used to execute more convincing and elaborate cyberattacks. What used to be simple email scams and basic malware have developed into highly realistic phishing attempts and ransomware campaigns. Deepfake technology, which can fabricate videos and audio clips that appear genuine, is particularly alarming, as it allows attackers to impersonate real individuals with unprecedented accuracy. This capability, coupled with the availability of harmful AI tools on the dark web, has armed cybercriminals with the means to carry out highly effective and destructive attacks.

While AI offers numerous benefits for businesses, including efficiency and productivity, it also expands the scope of potential cyber threats. In regions like Scotland, where companies are increasingly adopting AI-driven tools, the risk of cyberattacks has grown considerably. A report from the World Economic Forum, in collaboration with Accenture, highlights that over half of business leaders believe cybercriminals will outpace defenders within the next two years. The rise in ransomware incidents—up 76% since late 2022— underlines the severity of the threat. One notable incident involved a finance executive in Hong Kong who lost $25 million after being deceived by a deep fake video call that appeared to be from his CFO.

Despite the dangers posed by generative AI, it also provides opportunities to bolster cybersecurity defences. By integrating AI into their security protocols, organisations can improve their ability to detect and respond to threats more swiftly. AI-driven algorithms can be utilised to automatically analyse code, offering insights that help predict and mitigate future cyberattacks. Moreover, incorporating deepfake detection technologies into communication platforms and monitoring systems can help organisations safeguard against these advanced forms of deception.

As companies continue to embrace AI technologies, they must prioritise security alongside innovation. Conducting thorough risk assessments before implementing new technologies is crucial to ensure they do not inadvertently increase vulnerabilities. Additionally, organisations should focus on consolidating their technological resources, opting for trusted tools that offer robust protection. Establishing clear policies and procedures to integrate AI security measures into governance frameworks is essential, especially when considering regulations like the EU AI Act. Regular training for employees on cybersecurity practices is also vital to address potential weaknesses and ensure that security protocols are consistently followed.

The rapid evolution of generative AI is reshaping the course of cybersecurity, requiring defenders to continuously adapt to stay ahead of increasingly sophisticated cybercriminals. For businesses, particularly those in Scotland and beyond, the role of cybersecurity professionals is becoming increasingly critical. These experts must develop new skills and strategies to defend against AI-driven threats. As we move forward in this digital age, the importance of cybersecurity education across all sectors cannot be overstated— it is essential to safeguarding our economic future and maintaining stability in a world where AI is taking the steering wheel.


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Singapore
Cyber Crime Cyber Fraud Financial Loss Impersonation Attack Meta Scams Singapore

Scammers Exploit Messaging Apps and Social Media in Singapore


 


Singapore is experiencing the dread of scams and cybercrimes in abundance as we speak, with fraudsters relying more on messaging and social media platforms to target unsuspecting victims. As per the recent figures from the Singapore Police Force (SPF), platforms like Facebook, Instagram, WhatsApp, and Telegram have become common avenues for scammers, with 45% of cases involving these platforms. 

There was a marked increase in the prevalence of scams and cybercrime during the first half of 2024, accounting for 28,751 cases from January to June, compared to 24,367 in 2023. Scams, in particular, made up 92.5% of these incidents, reflecting a 16.3% year-on-year uptick. Financial losses linked to these scams totaled SG$385.6 million (USD 294.65 million), marking a substantial increase of 24.6% from the previous year. On average, each victim lost SG$14,503, a 7.1% increase from last year.

Scammers largely employed social engineering techniques, manipulating victims into transferring money themselves, which accounted for 86% of reported cases. Messaging apps were a key tool for these fraudsters, with 8,336 cases involving these platforms, up from 6,555 cases the previous year. WhatsApp emerged as the most frequently used platform, featuring in more than half of these incidents. Telegram as well was a go-to resort, with a 137.5% increase in cases, making it the platform involved in 45% of messaging-related scams.

Social media platforms were also widely used, with 7,737 scam cases reported. Facebook was the most commonly exploited platform, accounting for 64.4% of these cases, followed by Instagram at 18.6%. E-commerce scams were particularly prevalent on Facebook, with 50.9% of victims targeted through this platform.

Although individuals under 50 years old represented 74.2% of scam victims, those aged 65 and older faced the highest average financial losses. Scams involving impersonation of government officials were the most costly, with an average loss of SG$116,534 per case. Investment scams followed, with average losses of SG$40,080. These scams typically involved prolonged social engineering tactics, where fraudsters gradually gained the trust of their victims to carry out the fraud.

On a positive note, the number of malware-related scam cases saw a notable drop of 86.2% in the first half of 2024, with the total amount lost decreasing by 96.8% from SG$9.1 million in 2023 to SG$295,000 this year.

Despite the reduction in certain scam types, phishing scams and impersonation scams involving government officials continue to pose serious threats. Phishing scams alone accounted for SG$13.3 million in losses, making up 3.4% of total scam-related financial losses. The SPF reported 3,447 phishing cases, which involved fraudulent emails, text messages, and phone calls from scammers posing as officials from government agencies, financial institutions, and other businesses. Additionally, impersonation scams involving government employees increased by 58%, with 580 cases reported, leading to SG$67.5 million in losses, a 67.1% increase from the previous year.

As scammers continue to adapt and refine their methods, it remains crucial for the public to stay alert, especially when using messaging and social media platforms. Sound awareness and cautious behaviour is non negotiable in avoiding these scams.


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Ransomware
Business Security Cyber Attacks Financial Loss Manufacturing Firm Ransomware

Keytronic Lost Over $17 Million Due to a Ransomware Attack

 

Keytronic, an electronic manufacturing services supplier, has said that it lost more than $17 million as a result of a ransomware assault in May. The American technology firm established in 1969 as an Original Equipment Manufacturer (OEM) of keyboards and mice, but has since grown to become one of the leading global manufacturers of printed circuit board assembly (PCBA), with operations in the United States, Mexico, China, and Vietnam. 

In a filing with the Securities and Exchange Commission (SEC) last Friday, Keytronic stated that it detected the incident on May 6 after outages at its Mexico and U.S. sites affected business systems allowing bot operations and corporate services. 

"Due to this event, the Company incurred approximately $2.3 million of additional expenses and believes that it lost approximately $15 million of revenue during the fourth quarter," the company noted. "Most of these orders are recoverable and are expected to be fulfilled in fiscal year 2025. Partially offsetting these additional expenses was an insurance gain in the amount of $0.7 million that was also recorded during the quarter.” 

Keytronic originally disclosed in a May filing that the hack required it to suspend domestic and Mexican operations for two weeks during the incident response. The corporation also stated that the hackers stole private data from its systems during the intrusion. While Keytronic has yet to identify the attack to a specific threat group, the Black Basta ransomware gang claimed responsibility in late May and published all of the data stolen from the company's systems. 

The Black Basta ransomware gang claimed responsibility for the attack in late May and released what they claimed to be all of the data harvested from the company's systems, however Keytronic has not yet linked the attack to a specific threat group.

During the hack, the ransomware gang claimed to have access to several types of data such as HR, finance, engineering, and corporate files. Black Basta's dark web leak website published screenshots of employees' passports and social security cards, customer presentations, and company records. Black Basta is a Ransomware-as-a-Service (RaaS) operation that first appeared in April 2022 and has since claimed numerous high-profile victims, including government contractors and healthcare organisations.
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Vulnerability
Awareness Cyber Criminals Cyber Fraud Cybersecurity elderly Financial Loss fraud prevention Online Scams Scams vigilance Vulnerability

India's Digital Rise Sees Alarming Surge in Online Scams Targeting the Elderly

 

With India advancing in the digital landscape, the country is also witnessing a concerning rise in online scams. In recent months, thousands of individuals have lost substantial sums to these cyber criminals, either hoping to earn more money or after being threatened. Scammers employ new tricks, targeting people across all age groups, with a notable increase in elderly victims. Cyber criminals use increasingly sophisticated techniques to exploit the vulnerability and trust of senior citizens, causing significant financial and emotional distress.

In one case from Bengaluru, a 77-year-old woman named Lakshmi Shivakumar lost Rs 1.2 crore to a scam. It began with a call from someone posing as a Telecom Department representative, falsely claiming a SIM card in her name was involved in illegal activities in Mumbai. The caller mentioned a complaint with the Mumbai Crime Branch to add credibility.

Within hours, she received another call from individuals impersonating Mumbai Crime Branch officers, accusing her of laundering Rs 60 crore and demanding her bank account details for verification. Using threats of arrest and showing a fabricated FIR and arrest warrant, the scammers coerced her into sharing her bank details, ultimately transferring Rs 1.28 crore from her account, promising the money's return after the investigation.

In another case from Chandigarh, an elderly woman was deceived out of Rs 72 lakh under the pretense of a digital arrest scam. She received a call from someone claiming to be from the Central Bureau of Investigation (CBI) office in Andheri, Mumbai, falsely implicating her in a drug case connected to a man named Naresh Goyal and threatening to freeze her bank accounts.

The scammer linked her ATM card to the suspect and claimed obscene messages from her phone were circulating. Under immense pressure, she complied with the demands, participating in a video call where a fake police ID was shown. Over a week, the scammers defrauded her of Rs 72 lakh, promising to return the money after proving her innocence.

Older people are particularly vulnerable to such scams due to several reasons. They often struggle to keep up with the latest technology and digital security measures, making them easy targets for tech-savvy criminals. Additionally, older adults are more likely to trust authoritative figures and may not recognize the signs of deceit in official-looking communications. Their financial stability and natural inclination to trust and cooperate with law enforcement further increase their susceptibility.

How to stay safe and protect the elderly from scams

To protect the elderly from falling prey to such scams, awareness and vigilance are crucial. Here are some essential tips:

  • Inform elderly family members about common types of scams and the tactics used by fraudsters. Regular discussions can help them recognize and avoid potential threats.
  • Encourage seniors to verify any unsolicited calls or messages by contacting the official organization directly using known contact details, not the ones provided by the caller.
  • Ensure that devices used by the elderly have updated security software to protect against malware.
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Wireless
Cyber Scammers cyber threat Cyberattacks CyberCrime FBI FCC Financial Loss Reddit SIM SIM swap Swap Scam T-Mobile Technology Verizon Wireless

Inside Job Exposed: T-Mobile US, Verizon Staff Solicited for SIM Swap Scam

 


T-Mobile and Verizon employees are being texted by criminals who are attempting to entice them into swapping SIM cards with cash. In their screenshots, the targeted employees are offering $300 as an incentive for those willing to assist the senders in their criminal endeavours, and they have shared them with us. 

The report indicates that this was part of a campaign that targets current and former mobile carrier workers who could be able to access the systems that would be necessary for the swapping of SIM cards. The message was also received by Reddit users claiming to be Verizon employees, which indicates that the scam isn't limited to T-Mobile US alone. 

It is known that SIM swapping is essentially a social engineering scam in which the perpetrator convinces the carrier that their number will be transferred to a SIM card that they own, which is then used to transfer the number to a new SIM card owned by the perpetrator. 

The scammer can use this information to gain access to a victim's cell phone number, allowing them to receive multi-factor authentication text messages to break into other accounts. If the scammer has complete access to the private information of the victim, then it is extremely lucrative. 

SIM swapping is a method cybercriminals utilize to breach multi-factor authentication (MFA) protected accounts. It is also known as simjacking. Wireless carriers will be able to send messages intended for a victim if they port the victim’s SIM card information from their legitimate SIM card to one controlled by a threat actor, which allows the threat actor to take control of their account if a message is sent to the victim. 

Cyber gangs are often able to trick carrier support staff into performing swaps by presenting fake information to them, but it can be far more efficient if they hire an insider to take care of it. In the past, both T-Mobile and Verizon have been impacted by breaches of employee information, including T-Mobile in 2020 and Verizon last year, despite it being unclear how the hackers obtained the mobile numbers of the workers who received the texts. 

The company stated at the time that there was no evidence that some of the information had been misused or shared outside the organization as a result of unauthorized access to the file, as well as in 2010 a Verizon employee had accessed a file containing details for about half of Verizon s 117,00-strong workforce without the employee's authorization.

It appears that the hackers behind the SIM swap campaign were working with outdated information, as opposed to recent data stolen from T-Mobile, according to the number of former T-Mobile employees who commented on Reddit that they received the SIM swap message. As the company confirmed the fact that there had not been any system breaches at T-Mobile in a statement, this was reinforced by the company. 

Using SIM swap attacks, criminals attempt to reroute a victim's wireless service to a device controlled by the fraudster by tricking their wireless carrier into rerouting their service to it. A successful attack can result in unauthorized access to personal information, identity theft, financial losses, emotional distress for the victim, and financial loss. Criminals started hijacking victims' phone numbers in February 2022 to steal millions of dollars by performing SIM swap attacks. 

The FBI warned about this in February 2022. Additionally, the IC3 reported that Americans reported 1,075 SIM-swapping complaints during the year 2023, with an adjusted loss of $48,798,103 for each SIM-swapping complaint. In addition to 2,026 complaints about SIM-swapping attacks in the past year, the FBI also received $72,652,571 worth of complaints about SIM-swapping attacks from January 2018 to December 2020. 

Between January 2018 and December 2020, however, only 320 complaints were filed regarding SIM-swapping incidents resulting in losses of around $12 million. Following this huge wave of consumer complaints, the Federal Communications Commission (FCC) announced new regulations that will protect Americans from SIM-swapping attacks to protect Americans from this sort of attack in the future.

It is required by the new regulations that carriers have a secure authentication procedure in place before they transfer the customer's phone numbers to a different device or service provider. Additionally, they need to warn them if their accounts are changed or they receive a SIM port out request.
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unauthorised access
Cyber Fraud Financial crime Financial Loss Information Technology Online fraud Online Scam OTP unauthorised access

E-Challan Fraud, Man Loses Rs 50,000 Despite Not Sharing Bank OTP

 

In a cautionary tale from Thane, a 41-year-old man, M.R. Bhosale, found himself embroiled in a sophisticated online scam after his father fell victim to a deceptive text message. The incident sheds light on the dangers of trusting unknown sources and underscores the importance of vigilance in the digital age. 

Bhosale's father, a diligent auto-rickshaw driver in Ghatkopar, received a seemingly official text message from the Panvel Traffic Police, notifying him of a traffic violation challan against his vehicle. The message directed him to settle the fine through a designated app called Vahan Parivahan, with a provided download link. Unbeknownst to him, the message was a clever ruse orchestrated by scammers to dupe unsuspecting victims. 

When Bhosale's father encountered difficulties downloading the app, he sought his son's help. Little did they know, their attempt to rectify the situation would lead to financial loss and distress. Upon downloading the app on his device, Bhosale encountered a barrage of One-Time Passwords (OTPs), signalling a red flag. Sensing trouble, he promptly uninstalled the app. 

However, the damage had been done. A subsequent check of his bank statement revealed unauthorized transactions totalling Rs 50,000. With resolve, Bhosale wasted no time in reporting the incident to the authorities. A formal complaint was filed, detailing the deceptive mobile number, fraudulent link, and unauthorized transactions. 

In response, the police initiated an investigation, invoking sections 66C and 66D of the Information Technology Act to pursue the perpetrators and recover the stolen funds. This unfortunate ordeal serves as a stark reminder of the prevalence of online scams and the importance of exercising caution in the digital realm. To avoid falling victim to similar schemes, users must remain vigilant and skeptical of unsolicited messages or unfamiliar apps. 

Blind trust in unknown sources can lead to devastating consequences, as Bhosale's family discovered firsthand. Furthermore, it is essential to verify the authenticity of communications from purported official sources and refrain from sharing personal or financial information without thorough verification. 

In an era where online scams abound, skepticism and diligence are paramount. As the investigation unfolds, Bhosale's story serves as a cautionary tale for all internet users. By staying informed, exercising caution, and seeking assistance when in doubt, individuals can protect themselves from falling prey to online scams.
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