10 Apr Rise of AI-driven identity fraud raises fresh security concerns, new report finds 

Synthetic identity theft is now one of the fastest-growing forms of fraud globally, prompting warnings that rapidly evolving technology could outpace current security defences. 

New figures from LexisNexis Risk Solutions show synthetic identity fraud now accounts for 11 per cent of all reported fraud cases worldwide. Even more striking is the speed of its growth: incidents increased eight-fold in 2025 alone, according to the company’s latest Cybercrime Report. 

The findings point to a clear shift in criminal tactics. Fraudsters are no longer relying solely on stolen identities, but are increasingly building entirely new ones by blending real and fabricated data, often using generative artificial intelligence tools to make them more convincing. 

What was once largely a US-focused issue has now spread globally. The report highlights a sharp rise in cases across Latin America, which accounted for nearly half of all synthetic identity fraud in 2025.  

Analysts link this surge to the rapid expansion of regulated online gaming and gambling in the region, creating new opportunities for exploitation. 

Synthetic identities are particularly difficult to detect because they combine genuine personal data into a single, seemingly legitimate profile. 

 Even with advances in biometric security and deepfake detection, stopping these attacks remains complex.  

Financial firms such as TransUnion and developer platforms like GitHub have both highlighted the growing challenge of identifying manipulated or artificially generated identities. 

Despite its rapid rise, synthetic identity fraud is not yet the most common form of digital crime. The report shows that first-party fraud remains the largest category, accounting for 38 per cent of cases. This is followed by account takeover (ATO) attacks, where criminals gain unauthorised access to existing accounts, making up 17 per cent per cent. 

The data is drawn from more than 116 billion online transactions analysed through the LexisNexis Digital Identity Network, covering sectors including financial services, e-commerce, telecommunications, media, and gaming. 

Alongside the growth in synthetic identities, the report highlights a broader surge in automated threats. Malicious bot attacks rose by nearly 60 per cent last year, while so-called ‘agentic’ traffic – activity driven by AI agents – increased by 450 per cent, particularly in areas such as online payments and gaming logins. 

According to Biometric Update, Stephen Topliss, vice president of fraud and identity at LexisNexis Risk Solutions, said: “Cybercriminals are experimenting with the same technologies that are transforming digital commerce and organizations must prepare for a future where both legitimate users and malicious actors rely on automated agents to interact online. Those that succeed must be able to confidently distinguish between humans, bots and agents as well as determining intent.”