What Is Synthetic Identity Theft, and How Can You Stay Safe?

Identity theft is far from new, but it’s evolving. As social media and other digital technologies have made personal information more accessible, fraud has become more common and far more advanced. Synthetic identity theft is a prime example of this shift.

A 2019 report found that synthetic identity theft is the fastest-growing type of financial crime in the U.S. Security experts may not even know its full extent because it can be far more difficult to catch. So, what exactly is synthetic identity theft, and how can you avoid becoming a victim? 

What Is Synthetic Identity Theft?

Traditional identity theft is fairly straightforward: a criminal steals personally identifiable information (PII) to pose as someone else. Synthetic identity theft also involves stealing PII, but instead of using a real identity, criminals create a new one. They take real, stolen information to craft a believable record of someone who doesn’t actually exist.

In 2018, a synthetic fraud ring created more than 20 synthetic identities to get loans and credit cards. By the time law enforcement caught them, they had stolen more than $1 million from 19 different financial institutions. Not all synthetic identity theft cases are that large, but they can get that way because it’s so hard to catch.

With traditional identity theft, there are normally signs that someone isn’t who they claim to be. A purchase or loan application may not align with that person’s financial history, suggesting it’s fraudulent. However, there aren’t many indicators like that with synthetic fraud.

Since these criminals use fake identities, there’s no credit history to compare anything to. That may make it harder to get loan approval, but if they don’t get caught, that doesn’t matter. They can keep creating new identities to commit more fraud.

How Does Synthetic Identity Theft Work?

Synthetic identity theft can happen in a few different ways. Most often, criminals steal someone’s social security number (SSN) and pair it with a fake name, address and birth date. These details may be stolen information from other sources, too.

Criminals try to target people with little to no active credit history, making it harder to get caught. As a result, children are some of the most popular targets. In 2017 alone, more than 1 million children in the U.S. were victims of synthetic identity theft. People without homes, incarcerated people and older adults are other common targets.

In some cases, fraudsters use a stolen SSN but their real names and addresses. These instances often happen when someone is trying to appeal for relief programs or financial services they couldn’t normally obtain.

Regardless of how the rest of it plays out, synthetic identity theft always starts with stolen PII. Cybercriminals often sell PII they obtain in data breaches on the dark web. There, fraudsters can buy it for as little as $8 per record and use it to create a synthetic identity. 

How to Protect Against Synthetic Identity Theft

Synthetic identity theft can be frightening. Thankfully, while it is harder to catch than traditional fraud, you can still protect against it. The most important thing is to be careful about how much personal information you give away, especially online.

If there is less of your PII online, even in secure databases, there’s less for a criminal to use. Always think twice about entering personal details in online forms, and make sure any services you use that have access to your data are secure. 

Learning how to spot phishing attempts is an important part of that process. Urgent calls to action, unknown senders, spelling errors and suspicious links are usually indicators that someone is trying to steal your information. In general, it’s best never to send personal information over email or online messaging services.

Physical security steps are helpful, too. Your mail can contain more PII than you think, so keep an eye on your mailbox to make sure no one is tampering with it. It’s also best to shred discarded mail and documents instead of just throwing them away so that no one can learn anything from your trash.

Finally, you can watch for possible fraud by monitoring your credit. Each of the three major credit bureaus will give you one free credit report a year, which you can review to watch for anything that doesn’t add up. If you see a change that doesn’t make sense, call the bureau to freeze your credit as you look into it further.

Stay Safe From All Types of Fraud

Cybercrime is rampant today, and synthetic identity theft is just one of the threats you may face out there. Learning about these crime strategies is the first step in protecting yourself. When you know how criminals may steal and use your information, you can take the right steps to stay secure.