Synthetic identity represents a growing threat to e-commerce. By combining false information with real data, fraudsters create fictitious identities that are difficult to detect. This method makes it possible to bypass security systems, resulting in financial losses and risks for businesses. In this article, find out how this type of fraud works and what you can do to protect yourself effectively.
Identity fraud, in all its forms, is a constantly evolving scourge in the e-commerce sector. Among the most insidious forms of this fraud, synthetic identity stands out for its ability to bypass traditional security mechanisms. On November 7, we co-hosted a webinar with Fevad (Fédération du e-commerce et de la vente à distance), highlighting the growing dangers associated with this fraud, as well as solutions for dealing with it at the earliest stages of the customer journey. You can watch the replay here ( for FEVAD members only).
What is synthetic identity?
Synthetic identity is a fraud based on the creation of fake online profiles from real data, but mixed and altered. A fraudster combines existing information, such as social security numbers, addresses or dates of birth, to create fictitious identities. These ‘identities’ can then pass through the security filters you use, such as conventional identity checks, which do not detect the deception. Fraudsters use these synthetic profiles to make online purchases with stolen bank cards or generate fraudulent returns, often exploiting loopholes in product return processes. This form of fraud is particularly difficult to detect and can result in significant financial losses.
Fraud is evolving: a constantly growing problem
The biggest challenge with synthetic identity lies in its constant evolution. As we pointed out during the webinar, online fraud has grown in recent years and is adapting to new technologies and verification methods. Fraudsters are using increasingly sophisticated tools to make their artificially created identities harder to detect.
This has direct consequences. Not only does synthetic identity fraud disrupt your sales and affect your profitability, it also leads to a deterioration in consumer confidence in your site, due to the bad reputation that these frauds can generate.
Protect yourself at the first stage of the customer journey
Faced with this growing threat, prevention is essential. And that starts at the very first stage of the customer journey, when information is recorded on your e-commerce site. It is essential to put in place robust verification mechanisms as soon as sensitive data is entered. Several strategies can be adopted to reduce the risks:
1. Customer data verification : use multi-factor authentication (MFA) tools, which require users to validate their identity via another means (SMS, e-mail, verification application). In addition, check address and bank details for inconsistencies.
2 . Behavioural analysis : integrate behavioural analysis solutions that detect atypical patterns in user interactions on your site. These technologies can spot suspicious behaviour, such as bulk purchases or unusual return attempts, which are often characteristic of fraud.
3. Monitoring product returns : another dimension of synthetic identity fraud is linked to product returns. Fraudsters often use synthetic identities to make purchases and then attempt to return products with falsely supplied information.
Galeries Lafayette: a success in the fight against return fraud with Oneytrust !
With Galeries Lafayette, a long-standing Oneytrust customer, we have implemented a system to combat returns fraud that has enabled us to detect and prevent numerous cases of synthetic identity. Thanks to a combination of advanced technologies and stricter verification processes, Galeries Lafayette has succeeded in significantly reducing returns fraud.
The figures speak for themselves: Galeries Lafayette recorded 160,000 € in fraud avoided in 2024 following the implementation of this Oneytrust pilot thanks to the optimisation of its fraud detection tools and better control of customer information. By meticulously analysing suspicious transactions and cross-referencing data, Galeries Lafayette has been able to considerably limit the financial losses linked to fraudulent returns while strengthening the confidence of legitimate consumers. Watch Rachid Rhilan, Head of Fraud and Payment, speak on this subject (at 45:27 of our webinar).
How can you integrate these strategies into your own business?
It is crucial not to wait until you are confronted with fraud before taking action. Here are a few practical steps you can take:
– If you haven’t already done so, think about activating controls from the very first stage of your customer journey. We are of course at your disposal if you would like to extend your coverage with our solutions, just contact us!
– Strengthen product return procedures : implement more rigorous return policies and monitor suspicious return behaviour. For example, limit the amount of returns for newly created accounts or record additional information on returns (photos of returned products, proof of purchase, etc.).
– Educate your teams : fraud prevention also requires human investment. Train your teams to spot the signs of fraud and to act quickly when in doubt.
In conclusion, synthetic identity represents a major challenge for the e-commerce sector, but it is possible to protect yourself effectively by taking appropriate measures right from the first stage of the customer journey. By using identity verification tools, analysing user behaviour and optimising product return processes, you can significantly reduce the risks associated with this fraud.
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