The outstanding balance on auto loans linked to suspected synthetic identity fraud more than tripled from 2012 to 2017, according to TransUnion. But the credit bureau and other companies are launching products aimed at helping lenders identify synthetic identities before approving loans.
Synthetic identity fraud -- the fastest-growing type of identity theft -- occurs when a criminal combines real and fake information to create an identity to open bogus loan accounts and make fraudulent purchases.
In some cases, synthetic identities can have a real Social Security number from one person and an address, date of birth and phone number from three others, making it difficult to detect.
The balance of auto loans generated by suspected synthetic identities was more than $504 million in the fourth quarter of 2017, compared with $143 million five years earlier, said Lee Cookman, director of product strategy for TransUnion's fraud and identity solutions.
Compared with the fourth quarter of 2016, the balance of auto loans generated by suspected synthetic identities rose 7.7 percent, according to TransUnion. For auto loans, credit cards, personal loans and retail cards combined, the balance was $885.4 million in the fourth quarter, up 6.6 percent from a year earlier.
This week, TransUnion and PointPredictive announced separate product enhancements to help lenders continue to fight synthetic identity fraud.