As our digital environment evolves, identity criminals keep emerging with newer and better tools. Evidently, fraudsters are getting smarter and more inventive each day in rolling out the next big wave of crimes. Synthetic identity theft is one of those newest forms of crimes that are incredibly difficult to detect compared to common identity scams.
This type of theft involves fabricating new identities using both stolen and invented data. For example, a criminal could use small pieces of data from one or more stolen identities and combine them with a few more made-up information to create brand new fictitious personas. And these could be remarkably convincing and hard to trace.
How is synthetic identity theft different from typical identity scams?
Although relatively effortless to execute, typical identity scams are easier to detect. For instance, your name, SSN, date of birth, address, and other identifiable data are all linked. So, when a criminal uses your complete identity, it could get traced back to you.
But a fabricated identity that uses authentic and fake information can only point to a fictitious person. It can create substantial confusion, making it extremely difficult to detect.
Synthetic identity theft is also a highly elaborate and complex form of scam, unlike the typical identity theft you hear about on media. The latter is often straightforward. A criminal simply needs access to a person’s identity, whether it’s through a database breach or phishing attack. They would then use those details to take out a loan, file a tax return, receive medical benefits, or perform some other similar crime.
But synthetic identities consist of the meticulous construction of an individual who only exists on paper. Criminals would often go to great lengths planning and building these profiles before they finally execute their criminal acts. For example, they could apply for a loan just to create a credit report under the newly created fake identity. They could then apply for a job, take out credit cards and small debt, and do everything else a real person would. This helps ensure new records are added under the relevant name and SSN. These criminals will work patiently to develop a sufficient credit history and build rapport with lenders before they finally take out a massive loan and disappear.
So, this is not your run-of-the-mill identity scam. It is a highly sophisticated, well-panned, and meticulously executed scheme that’s often near-impossible to predict or identify.
Who is at risk?
Criminals could target anyone for synthetic identity theft. Information from real identities adds a degree of authenticity to their fake personas. So, they could use a database hacking, phishing, or malware attack to get their hands on your identifiable details. They might even purchase them on the dark web when they go on sale following a data breach.
However, children could face a higher risk of falling prey to this type of identity theft. It’s because they have far fewer data on record compared to adults. For instance, they would have a social security number but not a credit report or history. This provides criminals with more opportunities to create fabricated identities.
They could, for example, use your child’s SSN and produce a non-existing persona by combining it with other false information such as a name and date of birth. They could then apply for credit cards, take out loans, and even file tax returns before they disappear after taking a substantial loan. And when it’s time for your child to apply for their first loan, you may find that there’s already a credit report created under their SSN.
Synthetic identity theft could lead to a complex web of crimes. Although they mostly involve financial fraud, these criminals could even create fresh identities to claim benefits or get work permits and visas. This inevitably means complex and grave outcomes for unassuming victims.
How can you avoid synthetic identity theft?
Since detecting synthetic identity theft is significantly difficult, you will most likely find it hard to minimize its damaging impact. After all, many victims only find out years after the crimes have taken place. Therefore, taking measures to prevent this type of fraud is a better approach to minimize your exposure.
1. Ramp up data protection
The best preventative step to avoid synthetic identity theft is to safeguard data belonging to both you and your family. A more cautious approach to data security can go a long way to keep you safe and away from trouble.
So, adopt responsible data sharing practices, whether it’s on social media or in person. Use strict measures to protect your data from theft and loss. Also, watch out for unreasonable requests for personal information. Some may be genuine, while others could be deliberate phishing attempts.
2. Sign up for an identity theft protection service
These service providers can offer around-the-clock support by monitoring your personal information and alerting you to potential threats. They can even guide you in the event of a breach and help you through the recovery process.
3. Track your credit report
Although this is not a preventative measure, it’s still an essential step to detect potential warning signs of synthetic identity theft. A credit report could point to unauthorized activity under your name. It’s also important to protect kids from identity scams. If there’s been any activity using your child’s SSN, for instance, then you will likely find that the credit bureaus have already created a credit report for them.
Of course, checking the credit reports once a year will not be enough to detect and respond to this type of crime. You will need to review them at least once a month.
Synthetic identity theft could lead to devastating consequences for both you and your family. So, adopt a proactive approach to protecting your identity and avoid the often irreversible outcomes of becoming a victim.