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Synthetic identity fraud

What is synthetic identity fraud?

Synthetic identity fraud is a type of identity fraud that involves creating a new identity using a combination of real and fake information. Criminals use this new identity to open bank accounts, apply for credit cards, and take out loans. They establish a credit history over time, making it difficult for the victim to know their identity has been stolen. 

What are examples of synthetic identity fraud? 

A common example of synthetic identity fraud is when a criminal uses a real Social Security number (SSN) with a fake name, date of birth, and address to create a new identity. The thief can then use this “new” identity to open a bank account, apply for a credit card, or get a loan. The criminal may also use a fake SSN with a real name and address to create a synthetic identity. The fake SSN is often used to avoid detection by credit bureaus, making it difficult for the victim to know that their identity has been stolen. 

What happens if you’re the victim of synthetic identity theft?

Victims of synthetic identity fraud may not realize their identity has been stolen until they apply for credit and are denied or receive calls from debt collectors. It can be challenging to detect and fix the issue because the thief may have used a different name or address with the real SSN, making it difficult for credit bureaus to identify the fraud. To fix the issue, victims must first report the fraud to the credit bureaus and dispute any inaccurate information on their credit reports. They may also need to file a police report and work with the Social Security Administration to correct any errors on their SSN record. 

How can companies protect against synthetic identity theft?

Companies and businesses can take several steps to protect themselves from synthetic identity theft. They can use more robust identity verification tools, such as multifactor authentication (MFA) or biometrics, to ensure that the person applying for credit is who they say they are. They can also monitor their customers’ credit reports for any suspicious activity, such as new accounts being opened in their name. Additionally, companies can limit the amount of personal information they collect from their customers and protect the data they do collect with strong encryption and security measures. 

How do you protect yourself from Identity Fraud? 

Protecting yourself from identity fraud requires taking proactive steps to safeguard your personal information and monitor your financial accounts for signs of fraudulent activity. Here are some of those steps:  

  • Monitor Your Credit Reports: Check your credit reports from all three major credit bureaus (Equifax, Experian, and TransUnion) at least once a year. Look for any suspicious activity, such as new accounts or loans that you did not open. 
  • Use Strong Passwords: Use strong, unique passwords for all your online accounts, including social media, email, and banking. Avoid using the same password for multiple accounts, and don’t use easily guessable information, such as your birthdate or pet’s name. 
  • Protect Your Social Security Number: Your Social Security number is the most critical piece of personal information that identity thieves can use to steal your identity. Protect it by not carrying your Social Security card in your wallet, and never give it out unless it is necessary. 
  • Beware of Phishing Scams: Phishing scams are a common way for identity thieves to steal personal information. These scams often come in the form of emails or text messages that appear to be from a legitimate source, such as your bank or credit card company. Be cautious of any unsolicited emails or messages and do not click on links or download attachments unless you are certain they are safe. 
  • Use Two-Factor Authentication: Two-factor authentication adds an extra layer of security to your online accounts. This requires a password and another form of verification, such as a code sent to your phone, to log in. Enable two-factor authentication on all your online accounts that offer it. 
  • Shred Sensitive Documents: Shred any documents that contain sensitive personal information before throwing them away, including credit card statements, bank statements, and pre-approved credit offers. 
  • Freeze Your Credit Report: Consider freezing your credit report, which prevents anyone from opening new accounts or loans in your name without your permission. You can easily unfreeze your credit report when you need to apply for new credit.