Synthetic Identity Fraud: How Fake Employees Bypass Onboarding

A new hire breezes through your company's onboarding process, submits all the paperwork, gets an email address, badge, and system access. However, this person doesn't actually exist. The name on file is a fiction, and the background checks passed because the Social Security number looked valid. The fraudster behind the account now moves freely through your systems under a made-up identity.

This is the reality of synthetic identity fraud. Fraudsters blend genuine personal data to assemble a convincing but entirely false identity.

Synthetic identity fraud isn't just a technical or financial crime. It exploits trust in your people, your HR processes, and your onboarding procedures for security‑aware organizations like yours. This makes it a serious human-risk issue, not just a technical threat.

In this article, we'll show why SIF matters well beyond credit cards and loans and why your workforce (and vendor) onboarding processes could make you vulnerable.

What is synthetic identity fraud?

Synthetic identity fraud is the creation of a fictitious persona by combining real data with fabricated details to build a new, fraudulent identity. In traditional identity theft (or account takeover fraud), a criminal hijacks an existing person's identity using their SSN, name, DOB, and other personally identifiable information (PII) to impersonate them.

By contrast, synthetic identity fraud fabricates a new identity that belongs to no real person. Because the identity is synthetic, not a real person's identity, it often avoids detection by traditional fraud checks that assume every identity maps to a real individual.

Historically, synthetic identity fraud has targeted financial systems: opening bank accounts, obtaining credit cards or loans, and exploiting credit systems. Fraudsters build credit history over time, making the synthetic identity appear legitimate, then "bust out," maxing out credit or vanishing without paying financial institutions.

The threat is no longer confined to banking or credit, however. As digital onboarding, supplier/vendor registration, and remote workforce hiring proliferate, synthetic identities can slip into enterprise HR, vendor management, or workforce systems.

For organizations focused on human risk, this broadens the risk landscape. What used to be a "financial fraud problem" is now a people‑risk and insider‑threat problem, making synthetic identity fraud especially relevant for workforce security.

Why it's rising: synthetic identities in the AI era

The growth of generative AI (GenAI) and related synthetic‑media tools has dramatically elevated the potency of synthetic identity fraud. Fraudsters now have access to capabilities that make fake identities look and feel more "real" than ever.

And not just on paper, but across documents, social media, voice, and more. According to a recent report, GenAI is fueling a sharp increase in synthetic‑identity creation, enabling bad actors to generate convincing identities at scale.

Here are the key vectors enabling this rise:

• AI-generated documents and media make fakes more believable. Fraudsters can now craft realistic identity documents, fake photos, and even deepfake video or voice content that passes many standard validation checks.
• Automation accelerates identity creation and impersonation. What once might have taken fraudsters days or weeks (assembling data, synthesizing documents, and building a profile) can now be done in hours or minutes.
• Human vulnerability: trust in documentation and digital presence is exploited. As hiring, vendor onboarding, and remote‑work enablement increasingly rely on digital processes, organizations often assume truthfulness when a resume, background check, or digital profile "looks real."

This type of fraud is less about cracking technical defenses and more about exploiting trust, process gaps, and assumptions about identity legitimacy.

Real-world scenarios that enable synthetic identity fraud

While synthetic identity fraud has roots in financial crime, its reach now extends well beyond banks. Below are some of the ways enterprises, even those without direct financial operations, can be exposed to data breaches.

HR onboarding without robust verification checks

Because much of modern onboarding relies on automated or semi‑automated identity and credential checks, rather than in‑person verification, a fake identity can easily sail through. Over time, the bogus employee gains company access, email privileges, and maybe even internal systems or sensitive data.

Especially with remote or hybrid work, identity checks frequently rely on scanned IDs, selfies, or video calls, which can be fooled by deepfakes or AI-generated media. Without stronger liveness detection or cross-channel verification, this kind of synthetic onboarding can go undetected.

Vendor impersonation during procurement

Fraudsters create synthetic identities posing as legitimate third‑party vendors or suppliers. With convincing credentials, fake company backgrounds, and plausible contact details, they get registered in vendor management systems, gain access to procurement platforms, or receive purchase orders.

Once inside, these fake vendors might invoice fictitious services or gain deeper system access, all under the guise of legitimate business relationships. For organizations that don't treat vendor identity verification with the same rigor as HR or customer onboarding, vendor impersonation becomes an attractive and under‑monitored fraudulent activity.

Executive‑assistant and administrative support scams

An attacker posing as a newly hired executive assistant, complete with forged credentials and a synthetic identity, can slip into the org via HR or contractor channels. Once inside, they manipulate leadership calendars, read sensitive emails, request confidential information, or set up fraudulent payment requests.

Since high‑trust roles like executive support often assume identity legitimacy based on internal referral or minimal verification, synthetic identity fraud becomes a powerful form of internal social engineering.

Where traditional security measures fall short against synthetic identity fraud

Many existing security and fraud‑prevention systems are built around digital authentication, like verifying digits, documents, credentials, or network activity. That creates a blind spot where criminals can deploy synthetic identities.

• Static checks miss synthetic legitimacy.
• Authentication controls like MFA don't address identity origin.
• Legacy fraud analytics struggle with speed, sophistication, and scale.

Since synthetic identity fraud exploits process and trust gaps, not just technical vulnerabilities, purely technical or automated fraud detection is insufficient. Organizations need behavioral and procedural safeguards like oversight, context-based validation, and human judgment.

This is where a human‑risk and security‑awareness platform like Adaptive Security becomes critical. Embedding behavioral controls and culture-level checks into onboarding, vendor intake, and ongoing access reviews lets companies shore up the non‑technical layers that synthetic fraud targets.

How behavioral training helps detect synthetic identity fraud

Given the limitations of technical defenses, employees themselves, especially those involved in hiring, procurement, vendor management, or privileged‑access onboarding, can be the first line of defense. But only if they're trained to view identity and access differently: not as checkboxes, but as trust assumptions worth interrogating.

Training builds awareness of "people-risk," not just technical risk. Employees learn to spot behavioral and contextual red flags. Real-world indicators of synthetic‑identity fraud might include:

• A new hire or vendor whose paperwork seems overly polished but whose background is thin
• Someone unusually eager to gain access quickly
• Vague or inconsistent background or backstory
• Reluctant or evasive answers to standard questions
• Odd requests for system access or privileges outside of what's normal for their role

Behavioral analytics and cultural reinforcement can surface anomalies. Tools and programs that track user behavior, sometimes referred to as user/entity behavior analytics (UEBA), can reveal unusual patterns. Ongoing training and culture-building also sustain vigilance and continued fraud prevention.

Adaptive Security doesn't approach training as an afterthought, but as a core pillar. Through role-specific modules, periodic refreshers, interactive training, and behavioral nudges, organizations can transform their workforce into an active fraud alert machine.

What HR, GRC, and security teams should watch for

Synthetic identity fraud thrives in the cracks between people, process, and systems. That makes it everyone's responsibility, not just IT's. From hiring to access governance, here's how different internal teams can help detect and prevent synthetic identities from slipping in unnoticed.

HR & onboarding teams

As the frontline gatekeepers of workforce access, HR teams play a critical role in identity validation. But with increasing remote work and outsourced functions, traditional verification processes are no longer enough. Professionals need to scrutinize anomalies in background checks or digital footprints.

Be wary of:

• Background reports with minimal employment history or inconsistent timelines
• Professional references that are unverifiable or use webmail addresses
• Social profiles that look recently created or overly curated

Synthetic identity theft is hard to spot on your own. Always verify upstream to confirm the authenticity of recruiting firms, contractor platforms, or referral sources.

GRC and compliance teams

Governance, risk, and compliance (GRC) teams have the oversight power to detect systemic risk, but only if identity management is treated as a control domain.

• Conduct regular access audits. Ensure that every user, contractor, or vendor in critical systems has a legitimate, verifiable identity.
• Look for dormant open accounts. This can include duplicate profiles or entities with excessive or unusual access patterns.
• Cross-check identity claims. Use external validation tools, such as business registry databases, to confirm the legitimacy of vendors or new entities before provisioning access or initiating payments.
• Flag role and access mismatches. Investigate cases where the access granted to an identity doesn't align with the role or business justification.

Security awareness teams

Security awareness training teams can turn employees into active detectors of suspicious behavior, but only if synthetic identity scenarios are explicitly addressed.

• Simulate onboarding-based threats. Integrate fake employee or contractor scenarios into phishing simulations or red team exercises. For example: a "new hire" requesting early access to sensitive files, or a "new vendor" requesting invoice approval.
• Train on behavioral red flags. Teach employees to be aware of human cues, such as evasive communication, urgency, or inconsistencies in backstory, that may indicate a fabricated identity.
• Reinforce reporting culture. Encourage staff to report identity oddities or procedural workarounds without fear of repercussions. A suspicious gut feeling from a recruiter or executive assistant can stop a cybersecurity breach in progress.

The best defense against synthetic fraud is human

Synthetic identity fraud is no longer just a threat to credit profiles or credit card companies; it's an organizational risk.

From HR onboarding to vendor access, synthetic identity thieves now exploit the weakest link: human trust. Your firewall won't catch a fake resume. MFA won't question a too-polished backstory. But your people can, if they know what to look for.

That's where Adaptive Security awareness training fits in. We don't block fake IDs at the perimeter. Instead, we empower your workforce to recognize behavioral signals that synthetic actors rely on: urgency, vagueness, out-of-scope access, and more.

Want to test your team's human-layer defenses? Book a demo to explore how Adaptive can help.

FAQs about synthetic identity fraud

What's the difference between identity theft and synthetic identity fraud?

Identity theft involves stealing and using someone else's complete personal identity (e.g., using their real SSN, name, and date of birth). Synthetic identity fraud combines real data (like a valid SSN) with fake data (like a made-up name) to create a new, fictitious identity. The victim may not even know they're being exploited.

How can you prevent synthetic identity fraud?

Prevention requires layered verification, cross-departmental vigilance, and behavioral awareness. Combining technical controls with staff training—especially for HR, GRC, and vendor-facing roles—helps detect suspicious patterns early. Treat identity as both a technical and social verification challenge.

How can systems detect synthetic identity fraud?

Traditional systems often fail because synthetic identities appear valid. More advanced solutions use behavioral analytics, third-party identity resolution tools, and AI-based anomaly detection to flag patterns inconsistent with legitimate users. However, human judgment remains key in many contexts.

How do synthetic identities get past background checks?

Fraudsters use fabricated or stolen data to pass automated background screening tools, which may not cross-reference identity data across multiple sources. If checks rely only on document scans or public databases, synthetic identities can slip through without triggering alerts.

Who is most vulnerable to synthetic identity fraud?

Organizations with digital-first onboarding, remote hiring, or decentralized vendor intake processes are particularly at risk. Industries like tech, healthcare, education, and logistics, which handle large distributed workforces and third-party relationships, are common targets.