Synthetic Identity Theft – Fastest Growing in Financial Crime
Imagine someone posing as you to drain your bank account or to use your credit card. According to a report, identity theft accounts for a relatively small percentage of all incidents today.
But a much scarier type of fraud that has taken over is synthetic identity theft. Synthetic identity fraud is the reason behind many cyber crimes these days. According to a report by the Federal Reserve, synthetic identity fraud is the fastest-growing financial crime in the United States.
Synthetic identity fraud which is a form of a planned crime is clamping up with every passing day. Identity verification solutions should be integrated into a system in order to combat such frauds. Because of its nature and execution, this crime remains untraceable. In this article, we’ll discuss what synthetic identity is and how you can stay a step ahead to avoid falling into the pit of such scams.
What is meant by Synthetic Identity Theft?
Synthetic identity theft is when a criminal combines someone’s real identity with fake details to create an entirely new and different identity that doesn’t even exist. For instance, any Social Security number (SSN) can be combined with a fake name and address to open bank accounts, obtain health insurance, or apply for a job.
The thief uses fake information so it is impossible to catch the culprit behind synthetic identity theft. Also, the victim will not be able to detect the damage because it won’t be shown in traditional credit reports or alerts. Synthetic identity thieves steal information from unsuspecting individuals. This information may include:
- Social Security numbers (SSNs)
- Real Name
- Dates of birth
Who is likely to Fall, Victim?
Children are the prime target for such fraudsters. They can steal their SSN and use it for years before they can even realize that they have been compromised. It can only be revealed once a child starts to apply for different loans or credit cards. The breeding ground for selling or buying PII is the dark web that leads to synthetic identity theft. Identity thieves conduct their business in the shadow anonymously.
This makes it very difficult to trace and tackle such fraudsters. Only when a victim tries to apply for credit using that number, he will get to know that the information is already used. For example, anyone applying for their first job might find their Social Security number is misused.
Uses of synthetic identity:
There are three main reasons people create these fake identities:
- Identity fraud for fraudulent activities:
Activities such as stealing money or benefits especially in terms of credit card fraud, these synthetic identities can be used.
- Identity fraud for the job:
A false identity created can be used to live or to get a job.
- Identity fraud for credit repair:
Fake identity using SSN can be used to create an alternate credit history
How can you protect your child?
- Freeze your child’s credit:
If you have this option, consider it. Synthetic identities file fraudulent tax returns and get benefits and medical care so freezing credit for your child may help to mitigate them.
- Minimize child exposure:
Don’t provide your or your child’s Social Security number to anyone or anywhere. If someone requires it, ask why and know how they will protect that information.
- Monitor communications carefully:
Investigate anything that seems suspicious. Do not hesitate to follow up if anything does not make sense to you.