Synthetic identity fraud, in which fraudsters create a fictitious identity and use it to open credit accounts or obtain loans, is a fast-growing threat, the company said in a Friday (Jan. 23) press release.
Equifax’s new Synthetic Identity Risk product uses machine learning algorithms to uncover fraud patterns based on identity data, credit history and behavioral signals; detect potentially fraudulent activity; and flag that activity so enterprises can make decisions about identity verification and fraud prevention, according to the release.
The product can be used at account opening or continuously as an account management tool, per the release.
“Synthetic identity fraud is a rapidly growing threat impacting the consumer lending ecosystem,” Felipe Castillo, chief product officer for U.S. Information Solutions at Equifax, said in the release. “With Synthetic Identity Risk, Equifax strengthens lenders’ fraud defenses, helping them to uncover hidden risks and ultimately shift from reactive loss recovery to proactive prevention.”
Synthetic identity fraud is one of the most common and costly threats facing financial services firms, according to the PYMNTS Intelligence and Trulioo collaboration, “When ‘Good Enough’ Isn’t Enough: Digital Identity Verification in the Age of Bots and Agents.”
The report found that this form of fraud exploits automation and scale, often passing traditional verification checks designed for a simpler environment.
Artificial intelligence tools have augmented the threat of synthetic identity fraud by allowing fraudsters to create phony companies and clients and thwart fraud prevention efforts, according to the PYMNTS Intelligence and Finexio collaboration “Companies Enlist AI in Battle Against AI Fraud.”
This has led companies to upgrade their systems to mitigate the risks associated with the latest AI threats, according to the report.
Equifax said in October 2025 that it was preparing to launch new fraud prevention tools. During the company’s earnings call, management spotlighted efforts to use AI tools to combat fraud, specifically the increase in synthetic and first-party fraud.
“Fraud remains one of the most significant and rapidly evolving threats our customers face,” Equifax CEO Mark Begor said during the call. “We are leveraging our new advanced AI capabilities and unique data assets to deliver a new generation of fraud prevention tools that can identify risks that are invisible to traditional methods.”
