Using a fake identity for fraud is alluring. When the fraud is done, there will be no individual left to complain and the bank will lose time looking for a ghost. But it does take a fair bit of organization.
Stolen identity information can be a good starting point. Sometimes all it takes is one real document like a social security number. Equipped with this, a fraudster can forge a first identity. He will invent a name, age, date of birth, address, phone number, etc. The goal is to create a (fake) identity that has all the characteristics of a real one. Fraudsters will make sure that their identity can bypass the security checks of their targets. This is where having a “real”, verifiable, piece of identity (like a social security number) is useful.
The fraudster now has a first fake identity. He can start creating new identities. By slightly altering the information he used to create his first identity, he can give birth to fake individuals : a “John Doe”, a “Jane Doe” and a “John Smith”. All it takes is changing a name, modifying a phone number and re-using the rest of the identity information.
Once it has started, the process gets easier. Using a “fake” identity, someone can obtain new documents : driver’s license, phone bills, bank account information, etc. After a while, an experienced fraudster becomes effective at recycling information pieces and create new identities with minimal effort.
Fraudsters are effectively creating and managing a graph of fake identities. These fake identities are connected to bank accounts, phone numbers, social security numbers, identity papers, addresses, etc. As the information is often recycled, connections exist between fake identities that share one or more pieces of information.