Jewelers and pawnbrokers don't often get fooled by fake Rolexes. Counterfeit currency rarely passes muster at casinos. Fake ID confiscation has ruined many underage drinking excursions.

How do fraudsters keep getting away with exploiting synthetic identities for profit? In short, it's because these fake identities are so difficult to distinguish from the real thing, and the patterns behind them can be nearly impossible to distinguish from normal banking activity. Traditional fraud-fighting measures simply can't account for this growing source of criminal profit, and it's costing financial institutions billions in losses.

In 2015, Javelin Strategy & Research estimated new account fraud, perpetrated with synthetic identities, will rise from $5 billion in annual losses in 2015 to a projected $8 billion by 2018. What began as a problem for credit issuers has now become a high-risk proposition for credit unions, with the potential for large losses and diminished consumer confidence in a credit union's ability to protect its members from fraud.