Earlier this year Jeh C. Johnson, Secretary of the Department of Homeland Security (DHS) announced the final phase of implementation for the REAL ID Act. His announcement sets a timetable for when airline passengers will be impacted if IDs issues by their state are not compliant with the act, now set at January 22nd, 2018. Extensions are still available for states that can extend this timeframe all the way back to October 1st, 2020. The REAL ID Act was enacted over a decade ago, on May 11th 2005. Despite the extended timeframe since its passing, as of the date of this post less than half of states are compliant with the acts requirements.
While the REAL ID Act certainly has its critics (there have been multiple attempts to repeal or modify the law since it’s passing, and implementation has been delayed more than once), the intent behind the Act is important. The REAL ID Act is intended to prevent counterfeit and synthetic IDs. While the focus of the act is terrorism prevention, synthetic and counterfeit IDs also have a significant impact on fraud prevention.
Synthetic IDs present a significant challenge for identity verification and fraud prevention. Unlike counterfeit IDs, identity verification solutions based on scanning or evaluating the ID document itself have no ability to differentiate a synthetic ID. Solutions such as IdentiFraud Consumer makes it more difficult for identity fraud, even with a synthetic ID, since IdentiFraud Consumer uses different data sources (not the document itself) to verify identity. It is still possible for a fraudster to use a synthetic ID to create a data trail (by creating accounts at locations that verify the document for identity verification), but this increases the amount of time and effort required by the fraudster.
It is important to note that even when the REAL ID Act is fully implemented that synthetic identity fraud will continue to exist. The DHS final rule relaxed the verification requirements for identity documents outlined in section 202 of the act, as there was no mechanism in place to perform the required verifications in a practical manner. While the verification requirements that remain in place will make it more difficult to acquire synthetic IDs, it should not be expected that synthetic IDs will cease to exist.
A layered approach to identity verification is needed to address the challenges with synthetic IDs, and Electronic Verification Systems (EVS) can provide a significant component of a comprehensive identity fraud prevention program.