Network of fraud rings

Discover How to Detect and Disarm Identity Fraud Rings

Identity fraud rings are becoming larger and more pervasive. Bank cards, wireless services and retail credit cards are targets for these rings. 

Stopping Identity Fraud Rings 



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Detect and Disarm Identity Fraud Rings

Recognize Patterns of Organized Fraud Activity Before You Experience Losses

Identity fraud occurs when a person intentionally uses false personally identifiable information (PII) such as a name, address, date-of-birth and Social Security Number (SSN), to improperly obtain goods and services.

While identity fraud can be carried out as an individual act, thieves often collude to perpetrate their crimes, forming a fraud ring. Members of the ring may either be stealing victims’ identities or improperly sharing and manipulating personal identifying information. 

Who’s Involved in these Fraud Rings?

While some of these fraud rings are comprised of what might be considered typical criminal professionals, others consist of family members or groups of friends who collaborate to improve their rate of success and increase the scale of their fraud.

These groups may engage in a variety of fraudulent behaviors including:

  • Forgery
  • Filing false claims
  • Identity theft
  • Identity manipulation
  • Counterfeiting checks or currencies

By working together instead of on their own, members of the fraud ring can share information that helps them to make more money, better elude detection, aid one another with logistics, and carry out more diverse and complicated strategies for committing fraud.

Identity Fraud Rings are More Common Than You Think

LexisNexis® Risk Solutions decided to take a closer look at the identity fraud ring problem. Our research identified more than 10,000 identity fraud rings in the U.S. The study examined more than a billion applications for bank cards, wireless services and retail credit cards and found identity fraud rings attacking all three industries, with wireless carriers suffering from the most fraudulent activity.1

It was the first study to systematically find thousands of these criminal groups, accomplished through the development of an algorithm that automates the process of examining the interconnections between identity fraudsters to uncover rings of organized activity.

The Scope of Identity Theft

Using automation to look beyond individual behavior, the study took a broader approach to identifying fraud ring activity. It examined various groups to learn more about the participants, including their locations, ages and relationships to each other. What they found was surprising on multiple levels.

For example, a family of five in Florida was identified in a fraud ring. They operated undetected for more than three years. The extended family participants ranged in age from 24 to 37. In total, they filed at least 130 fraudulent applications, using more than 8 SSNs and 11 DOBs during that time period.2

The Numbers are Alarming

Ever-growing databases of personal and financial information are being stored online, giving thieves more opportunities to breach security and obtain valuable personal identity data. At the same time, identity theft rings continue to innovate, continually developing new strategies to commit fraud. 

Statistics related to identity fraud confirm the pervasiveness of this type of fraud.

  • In 2019, 14.4 million consumers became victims of identity fraud—that’s about 1 in 15 people.3
  • Identity theft happens most frequently as a result of a data breach, occurring 65% of the time.4
  • Over 146 million records were exposed in 2019, and data breaches increased by 17%.5
  • Consumers lost more than $1.9 billion to identity theft and fraud in 2019.6
  • Overall, 33% of U.S. adults have experienced identity theft.7
  • There’s a new victim of identity theft every two seconds.8

A Patented Approach to Defeat Identity Fraud Rings

We developed a patented approach to the systematic detection of fraud rings by recognizing potential fraudulent activity. The patent covers a technique for the detection of rings of identity fraud by gathering a group of likely fraudsters and looking for interconnections. When these interconnections are strong, the individuals are likely participating in a fraud ring.

Combining collective network insights and advanced data science, enables LexisNexis Risk Solutions to build new variables into our fraud models. Those models offer the ability to recognize subtle patterns of fraudulent behavior and highlight them in our tools to detect bogus applications before they’ve been approved.

When enterprises have the right tools to identify fraud rings, they can tailor their remediation practices to reflect specific threat vectors and further prevent fraud losses.

Contact a Sales Representative to learn more about our fraud and identity solutions.

1 LexisNexis Risk Solutions internal data sources
2 Ibid
3 Insurance Information Institute,  Facts + Statistics: Identity theft and cybercrime
4 Statista, Distribution of global data breach incidents in 1st half 2018, by type
5 Statista, Annual number of data breaches and exposed records in the United States from 2005 to 1st half 2020
6 Insurance Information Institute,  Facts + Statistics: Identity theft and cybercrime
7 Proofpoint, Global Cybersecurity Awareness Survey Reveals 33 Percent of U.S. Respondents Have Experienced Identity Theft, More than Twice the Global Average
8 Clark, There’s a new victim of identity theft every two seconds: Here’s the best way to protect yourself online

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This article is for educational purposes only and does not guarantee the functionality or features of LexisNexis products identified. LexisNexis does not warrant this article is complete or error-free.