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What is synthetic identity theft? Avoid becoming a victim

Synthetic identity theft can ruin your credit score and cause long-lasting problems. This technique involves criminals using your personal details to create fake online identities for nefarious purposes. In this article, we explain what synthetic identity theft is, how this fraud works in practice, and how you can avoid becoming a victim.

What is synthetic identity theft? Avoid becoming a victim

What is synthetic identity theft?

Synthetic identity theft definition

Synthetic identity theft occurs when someone creates fake identities, either by combining stolen and fabricated information or by creating fake personas from scratch. Some synthetic identity theft goes so far as to use AI to generate fake faces to fool biometric verification.

Synthetic identity theft is a type of fraud in which a criminal combines someone’s stolen personal details with fabricated elements to create a new identity. The fake identity can then be used to set up credit cards and perform other fraudulent actions.

Hackers can also create completely new identities from scratch, but throughout this article we’ll be focusing on synthetic identity fraud involving the details of real people. This type of crime can cause serious problems for the victims whose details are used to embellish fabricated identities.

Common uses of synthetic identity

There are a number of ways in which scammers can use such synthetic identities:

  • To fake their credit histories and open a bank account.
  • To artificially inflate their credit limit.
  • To illegally obtain a working permit in a foreign country.
  • To claim benefits they’re not entitled to.

How does synthetic identity fraud work?

Scammers usually combine real personal identifiable information with fake data to create a synthetic identity. They try to find people with no credit history, so they often exploit the social security numbers of children and minors. This can ruin your child’s credit score before they’re even old enough to make any purchases themselves. Criminals do this so that there’s less chance of an institution rejecting their application due to pre-existing credit scores. Criminals usually just snatch these numbers if they spot them circulating in the open, but they can also buy stolen numbers on the dark web.

Stolen data sells for a lot of money on the dark web, as we explored in our dark web case study.

They also target minors because they are less likely to use the number anytime soon, so it will take longer for the ruse to be discovered. However, if you had your details stolen as a child, you’ll find out when you grow up and try to open a bank account or apply for financing on a car or house.

Social security numbers have also become randomized since 2011, so they contain no birthdate or geographical data. That makes them even easier to use for synthetic identity creation. There have even been cases when scammers used randomly generated non-existing numbers to open bank accounts.

Synthetic identity theft vs. traditional identity theft

The difference between synthetic identity theft and traditional identity theft comes down to how your stolen data is used. In traditional identity theft, the attacker steals your entire identity, pretending to be you while maxing out credit cards and taking other actions in your name. With synthetic identity theft, only some of your personal information is used, and with it a criminal can set up an entirely fake persona.

In the short term, traditional identity theft might seem like the worse of the two, but the problem with synthetic identity theft is that it’s harder to detect, so the initial fraud alert is delayed. If someone has stolen just a few of your details, it might take a lot longer for you to find out about the fraudulent actions being perpetrated with those details.

Knowing how to check if someone is using your identity and understanding how to respond to the theft of your identity is important. Whenever possible, you should take steps to prevent all kinds of identity theft.

How to prevent synthetic identity fraud

To avoid falling victim to synthetic identity theft, follow the steps below:

  • Secure your data. Do not input your data on suspicious sites. Also try to minimize the online exposure of your personal data whenever possible. Sometimes the best identity theft protection is personal vigilance.
  • Stay alert for phishing attacks. If you receive unexpected or suspicious emails containing links, be careful. If you have a suspicion that you’re receiving communications from an impostor, ignore them or double check their authenticity with the real person or organization they’re claiming to be.
  • Act quickly. Immediately contact your bank and other relevant institutions if you have even the slightest suspicion and ask whether they noticed something suspicious happening with your account or your social security number.
  • Monitor your credit score. Keep a close eye on your credit score. There are some services that will allow you to track the different factors that influence your score over time, so you can see if an unusual card is being linked to your identity.
  • Avoid sharing SSNs. Be very careful about sharing your SSN (social security number), and only do so if you’re certain that you can do so securely and are dealing with a trusted organization. Your SSN is linked to you throughout your life and will be used to assess things like your viability for credit-based loans (including loans for buying a home).
  • Freeze credit reports if necessary. If you think that you might be the victim of identity theft, be it traditional or synthetic, you can contact credit checking companies and ask them to trigger a temporary credit freeze. This means that no one will be able to run credit checks for your details, so even if someone has stolen your social security number or other personal data, they won’t be able to take out lines of credit with them.
  • Use a VPN. A VPN or virtual private network encrypts your traffic and masks your IP address, mitigating the risk of getting hacked. You can install the NordVPN app on your smartphone, computer, tablet or router and prevent wrongdoers from spying on your online activities. With one NordVPN account, you can protect up to six devices and significantly improve your digital security. It’s better to be proactive than wait for an incident to happen and then fight the consequences.

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