Fake Identity Fraud

TL;DR

• Fake identity fraud = Orders placed using fabricated or mismatched identity information
• For merchants: Focus on detecting fake personas at checkout, not building credit files
• Detect via: Name/address mismatches, disposable contact info, suspicious account patterns
• Prevent with: Identity verification, device fingerprinting, address validation
• Often part of larger fraud ring operations

When fraudsters create fake personas to commit fraud.

Definition

Fake identity fraud occurs when someone uses fabricated or mismatched identity elements to place orders. Unlike third-party fraud (stolen identity) or first-party fraud (real identity abused), fake identity involves made-up customer personas.

For Issuers vs. Merchants

Banks worry about "synthetic identities" built over years to get credit. Merchants see the simpler version: fake personas used for immediate fraud.

What Merchants Actually See

Fabricated Customers

Element	Example
Fake name	Random combinations, celebrity names
Mismatched info	Name doesn't match card, address doesn't match name
Disposable contact	Burner phone, temporary email
No digital footprint	Email/phone has no history

Common Patterns

Pattern	What's Happening
Name ≠ cardholder name	Using someone else's payment
Email created same day	Throwaway for this order
Phone is VoIP	Untraceable number
Address is commercial mailbox	Drop point for packages
Account has no history	Created just for fraud

Why Fake Identities Get Used

Fraud Type	How Fake Identity Helps
Third-party fraud	Hide real identity when using stolen card
Promo abuse	Fake accounts for unlimited promos
Refund fraud	Untraceable account for abuse
Resale fraud	Buy limited items for resale
Fraud rings	Scale operations with fake personas

Detection Signals

Identity Mismatch Indicators

Signal	Risk Level
Name on order ≠ name on card	High
Billing name ≠ shipping name	Medium
Email name ≠ account name	Medium
Phone area code ≠ address location	Low-Medium

Contact Information Red Flags

Signal	What It Suggests
Disposable email domain	Throwaway identity
Email created recently	Account for this fraud
VoIP phone number	Untraceable contact
Phone recently acquired	New burner phone
No social/email footprint	Fabricated person

Account Behavior

Behavior	Risk
New account + high-value order	Using fake identity for fraud
Account info changed before order	Switching to fake details
Multiple identity changes	Testing what works
No order history, immediate large purchase	Fabricated customer

Prevention Strategies

At Checkout

Check	What It Catches
Name match validation	Cardholder ≠ customer
Email domain check	Disposable emails
Phone verification	Fake numbers
AVS	Address doesn't match card

Identity Verification

Level	Method	When to Use
Basic	Email confirmation	All orders
Medium	Phone verification	High-value orders
Strong	Document verification	Very high-value, suspicious orders

Behavioral Analysis

Device fingerprinting reveals:

• Same device, multiple "identities"
• Known fraud device
• Automation/bot signals
• Location inconsistencies

Response Playbook

When you suspect fake identity:

1. Add friction – Phone verification, email confirmation
2. Verify card match – Name on card matches order?
3. Check device – Same device, other accounts?
4. Review history – Any prior legitimate activity?
5. Decline or delay – Don't ship until verified

Fake Identity vs. Other Fraud Types

Type	Identity	Payment	Your Focus
Third-party	Stolen real	Stolen	Payment verification, 3DS
First-party	Own real	Own	Policy abuse detection
Fake identity	Fabricated	Mixed	Identity verification

Prevention Checklist

• Name matching on card validation
• Disposable email domain blocking
• Phone verification for new accounts
• VoIP detection enabled
• Device fingerprinting active
• AVS/CVV verification
• Velocity limits on new accounts
• High-value order review queue

Next Steps

Detecting fake identities?

1. Check identity signals – Score mismatches
2. Review contact info – Disposable markers
3. Link accounts – Same device, different names

Preventing fake identity fraud?

1. Add identity checks – Name matching
2. Verify contact info – Email and phone
3. Use device intelligence – Catch repeats

Related to larger fraud ring?

1. Check for patterns – Organized activity
2. Map linked accounts – Find the network
3. Update blocklists – Stop infrastructure

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Related Topics

• Third-Party Fraud – Stolen identity vs. fake identity
• Account Fraud – Fake accounts on your platform
• Fraud Rings – Organized fake identity operations
• Device Fingerprinting – Linking fake identities
• AVS & CVV – Payment verification
• Promo Abuse – Often uses fake identities
• Velocity Rules – Catching patterns