Gartner Research

The Growing Problem of Synthetic Identity and First-Party Fraud Masquerades as Credit Losses

Published: 01 March 2018

ID: G00349749

Analyst(s): Tricia Phillips , Danny Luong


Credit write-offs are skyrocketing in financial services, but economic pressures are not the cause. Security and risk management leaders must apply fraud prevention and secure payment technologies and strategies to new account use cases in digital channels.

Table Of Contents
  • Impacts


Impacts and Recommendations

  • Many Financial Institutions Are Experiencing Dramatic Increases in Credit Write-Offs, Erroneously Attributed to Credit Failures Instead of Fraud
  • Most Losses Are Due to Synthetic Identity Fraud and First-Party Fraud, Which Traditional Underwriting Tools Fail to Consistently Detect
  • Underwriting and Credit Processes and Models Are Designed to Determine Creditworthiness and Are Unable to Detect Fraud

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