Synthetic identity theft is a buzz term for a type of identity theft that’s been around almost as long as identity theft. Some experts define synthetic identity theft simply as the use of a victim’s SSn (SSn) along with a name and personal information that are different from or variants of the victim’s name and personal information.
Synthetic identity theft includes any variation of identity theft other than “true name” identity theft. True name identity theft occurs when the identity fraud committed uses the victim’s exact name, social security number, birthdate and any other victim information that is necessary to commit identity fraud.
Synthetic identity theft occurs when bits and pieces of the victim’s information are used, even when the use of the victim’s information is coincidental. In the past synthetic identity theft commonly described those situations where fraudsters synthesized an SSn (that is, they created an SSn randomly with or without using the rules for the SSn format). This synthetic SSn was used with real or fake names. For example, illegal immigrants could purchase a synthetic SSn on the black market and they would use it was their real name or a fictitious name.
It was not uncommon that the synthesized SSn corresponded to an SSn that had already been assigned to a real person. Consequently, the real person became a victim of identity theft, because transactions made by the imposter(s) under the victim’s SSn linked back to the victim’s SSn.
A recent article states that synthetic identity theft composed 20% of the total reported identity theft in 2002 and today it composes over 80% of the total. Why the increase?
When a person is victimized through synthetic identity theft, it is less likely that the victim will learn they have been victimized. One reason is that credit reports and credit monitoring may or may not report the situation when an SSn is used with a name other than the victim’s name. Therefore there is no alert to the victim that Jane Smith using their SSn. Consequently, the victim does not report the incident to creditors or law enforcement, and the imposters may never be caught. If the crooks are caught, they can use a simple legal argument to get them off identity theft criminal prosecution, unlike if they used the victim’s name and SSn.
A plausible explanation for the increase in synthetic identity theft is that consumer education awareness and new monitoring techniques by the credit reporting agencies are detecting synthetic identity theft technique that had previously gone undetected and unreported.
In part 2 of this article on synthetic identity theft, we'll explore whether or not credit reports and monitoring are of any help to consumers for the purpose of detecting synthetic identity fraud.
Comments