The rise of synthetic fraud in BNPL

Synthetic identities are increasingly used to attack buy now, pay later (BNPL) offerings, says Mike Cook, vice president of fraud solutions commercialization at identity verification firm Socure.  “Synthetic identities take a different bunch of different forms, but basically, they're just identities that don't really exist,” Cook tells Bank Automation News in this episode of “The Buzz” podcast. “Fraudsters will always attack a new vertical.” Socure works with five of the six biggest banks in the U.S., including Wells Fargo and Capital One, as well as digital banks Chime and SoFi.  BNPL is an attractive target for cybercriminals since the loans are submitted with little information for quick approval, making it challenging for companies to filter out fraudulent applications, Cook says on the podcast. There are two main ways to launch a synthetic fraud attack, he says, including “credit washing” one’s own credit report to artificially inflate the person’s credit rating and fabricating an account to open credit lines the fraudster has no intention of paying back.