Synthetic identity theft occurs when a fraudster combines real and fake personal information to create a new identity—as opposed to stealing an existing one.  A thief can use a real Social Security number combined with a fake name and date of birth to ‘Frankenstein’ together a new ID for the purpose of committing all manner of fraud. Synthetic ID is hard to spot, and, thus, hard to prevent, which is why we’re going to show the various ways synthetic ID theft happens, and how to guard against it.

How does synthetic ID theft start?

Thieves start by acquiring an SSN (Social Security number), or other personal data through which they can access an SSN, via:

• Data breach: Synthetic ID theft often starts with data breaches at banks, credit institutions, health providers, any company that holds your personal information.
• Wallet/purse/mail theft: These types of theft can yield a treasure trove of personal information—bank and credit card statements, pre-approved credit offers, new checks, tax information, driver’s license, and, of course, a Social Security card, if carried in a wallet or purse.
• The dark web: Stolen SSN’s can be purchased on the dark web.
• Phishing: A thief poses—via phone or email—as someone who ‘legitimately’ needs your personal information to check on unemployment benefits, bank transfers, Social Security payments, etc.
• Dumpster diving: Rummaging through trash for personal data.
• Randomization software: Thieves can get lucky and create viable SSN’s with randomization software.
• Data brokers selling your identity: Anyone with a computer can buy your personal information from search sites.
• Roommates, friends or relatives: Yes, people in your personal life can also be culprits. Your children’s Social Security numbers are especially valuable, as they can be useful for a longer time.

How a thief builds a synthetic ID

Once a thief has assembled enough fake and real elements to create the new ID, they use it to build credit. This process can take months, even years, which is why it’s so difficult to catch. To financial institutions, the fake profile seems like a real person with a job, a salary, photo, address, and even a library card who is simply making their way in the world.

‘Busting out’

Months, sometimes years later, the thief “busts out” by maxing their carefully earned credit with large

• Credit card purchases
• Retail purchases
• Bank loans
• Auto loans
• Home loans

Some thieves manage multiple synthetic identities in a rotating series of scams which also include stealing tax returns, medical benefits, and insurance payouts. Other uses for a synthetic identity are:

• Undocumented immigrants use synthetic IDs to live and work in the U.S. and receive benefits like healthcare and unemployment insurance.
• Fugitives purchase synthetic IDs to evade the law.
• Criminal rings use synthetic IDs for illegal activities like money laundering, drug and human trafficking.

Who pays for synthetic ID fraud?

Once thieves max out every possible fraudulent use for their synthetic ID, they abandon it, leaving the bills for others to pay.  If you’ve been a victim of synthetic ID theft, you will not be liable for fraudulent purchases or accounts as long as you can prove you are the real SSN holder and not the thief. However, it can take months to restore your credit and right your financial ship.

How to protect yourself against synthetic ID fraud

Even though synthetic identity fraud can be difficult to detect, there are ways to protect yourself against it, such as:

• Share SSNs as little as possible: This is particularly important if you have children, since they will not be dealing with their own credit for years, and the fraud can go undetected.
• Monitor your monthly credit card and bank statements: Look for unfamiliar charges or withdrawals.
• Get your credit reports: Be sure to check your reports from all three major credit bureaus—Experian, TransUnion, and Equifax—for accounts opened in your name.
• Watch your mail: Check for mail sent to your address in someone else’s name. This could be a sign that creditors are trying to reach the thief, and your address is part of the real information the fraudster has pieced together.
• Watch out for phishing: Attempts via phone, email, or text to trick you into sharing your SSN and other personal information.
• Watch what you share on social media: Don’t give out your birthday, or other important personal information.
• Read all communications from the IRS and Social Security Administration: Check all mail that comes from a service that uses your SSN.
• Freeze your children’s credit reports: This helps keep others from using their SSN to open new credit accounts.
• Freeze your own credit reports: This keeps thieves from opening an account in your name.
• Get an ID theft protection service: To help ensure that your private information remains private, our online privacy and reputation management services let you take back control of your personal data. From scanning and monitoring of social media accounts for reputation-damaging images and harmful content to providing a VPN, malware protection and password manager, IDShield offers the peace of mind needed in today’s digital world. Pick the one that’s right for you.