A rise in “synthetic fraud” – where a combination of fake and real information is being used in applications – is being seen by a credit information service.
Previously, criminals may have had to go through people’s bins, trawl through publicly available information online or buy information on the “dark web”.
But the growth in AI (artificial intelligence) is making it easier to rapidly fabricate huge volumes of new synthetic identities to launch fraud attacks on financial service companies, Experian said.
Experian said that analysis of confirmed fraudulent and potentially fraudulent credit applications showed a 60% annual jump in false identity cases in 2024.
AI technology can enable fraudsters to create fake identity documents which are “virtually identical” to genuine ones, making it harder to identify and prevent fraudulent applications, the firm added.
To counter the problem, companies are increasingly deploying AI solutions themselves, to quickly analyse and identify fraudulent applications on a wide scale, it said.
A YouGov survey of more than 500 financial service companies in Britain for Experian in February found only a quarter (25%) feel confident in addressing the threat posed by synthetic identity fraud.
Tristan Prince, fraud and financial crime director, Experian UK & Ireland, said: “Historically synthetic identity fraud was a difficult process for criminals to undertake, as they would need access to people’s actual personal information, often gleaned from rummaging through bins and trawling public records of births, marriages and deaths.
“Now with the prevalence of compromised personal data on the dark web and the latest AI technology at their fingertips, the effort to create or steal identity is vastly reduced.
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“Criminals are using AI to create images, generate identities, set up email addresses, and write social engineering scripts. This has all made creating a synthetic identity easier for criminals and that is showing in the data.
“Fortunately, AI solutions are at the forefront of solving the problem too. A multi-layered approach to fraud prevention is critical, with systems which incorporate biometric and behavioural technology helping companies lead the fight against fraud in 2025.”
Experian said it has prevented more than £9.5 billion in fraudulent applications across the UK and Ireland over the past five years.
