Synthetic Identity Theft: How to Avoid It?
Identity theft has been rampant even in the middle of the global pandemic. According to one study, identity theft reports rose at an alarming rate in 2020, growing by 113%. So, it’s hardly a surprise that it’s become a source of worry for 83% of Americans today. And it’s not just the possible financial costs that are keeping people up at night. The consequences of a stolen identity are tough to predict and may haunt you for many years into the future.
And now, there’s another growing phenomenon that could potentially lead to graver outcomes than what’s caused by the typical identity theft. Synthetic fraud is an entirely different crime that has taken ID theft to a new level. It’s when a criminal fabricates a brand new identity using a mix of real and made-up data. The result is the birth of a new individual who exists only on paper.
A synthetic ID scam is tricky to detect or trace, unlike the traditional identity fraud that imitates a real individual. It’s a highly elaborate and sophisticated fraud, left only to the expert criminals. And it could send organizations and law enforcement agencies on a wild goose chase for years, often with little hope of finding the culprit.
So, what kind of damage can a fraudster inflict with synthetic identity theft? Most importantly, how can you avoid getting entangled in one? Let’s find out.
What can a criminal do with a synthetic ID?
Fabricated identities could open up a world of possibilities to a criminal. In fact, they make it easier to commit crimes since they are much more complete with information than the stolen ones. For instance, fraudsters could take out credit cards, loans, and mortgages, file a tax claim, and carry out a host of other scams using synthetic identities.
They can even sell them on the dark web. These fabricated IDs could be the ideal cover-up for anyone looking to start a new life, leaving their old one behind. It’s likely why they’re in high demand among illegal immigrants, criminals, and those who have served jail time. For them, it’s the perfect solution to conceal their true identity and lead a near-normal life again under a new name. They can rent a house, get a job, seek medical insurance, or claim unemployment benefits by assuming a synthetic ID, often without ever getting caught.
It leaves no one spared
When talking about synthetic fraud, the focus is usually on the organization that bears the brunt of the apparent damage. For instance, if the criminal takes out a loan and defaults on payment, it’s the lending organization that’ll need to deal with the repercussions. Likewise, when the IRS pays out a tax refund based on a fraudulent claim, it’s the government that suffers the loss.
But there’s another important party that could face long-term distress because of these crimes: the victims of identity theft. Although synthetic IDs are fabrications, they also contain one or more authentic details extracted from a real person. These can include identifiable data like social security numbers (SSNs), names, or addresses. And the owner of this data could suffer many issues over time as they get involuntarily embroiled in criminal activities.
Now, children are vulnerable to synthetic identity theft, too. It’s because their social security numbers have no notable history attached. This is a massive boon to criminals. For instance, it gives them plenty of freedom to manipulate data and build an identity using the stolen SSN.
Another advantage is that kids have no proper use of their SSN until they become adults until it’s time to start a job, take out a credit card, or rent an apartment. As a result, ID thieves have plenty of time to carry out their schemes without raising alarm bells. But using an adult’s SSN is not that simple. There’s a higher chance of them finding out when checking a bill or credit report.
Data security is key
So, is it at all possible to avoid getting caught in synthetic identity theft? The key is identifiable data. If you can protect your PII, there’s little chance of becoming a victim. It’s as simple as that.
But this is easier said than done. There are countless organizations constantly seeking personal data for reasons both legitimate and otherwise. From your bank and medical services provider to your kids’ school, many external parties could be privy to identifiable information. Of course, there’s little you can do about their data security practices. But you can always question their privacy policies and data protection measures. And if you’re unhappy about any of them, you have every right to raise your concerns and ensure you and your family’s personal information is safe.
In addition, you also need to rethink your data-sharing habits. For example, phishing attacks are pretty common today and are one of the top causes of data breaches. So, being extra cautious about unexpected data requests that come your way is critical. Similarly, trivial activities like newsletter sign-ups and loyalty programs could make your identifiable information vulnerable. These are typical data collecting traps that often result in mishandling, sharing, or even selling personal information on the dark web. So, reassess how and when you share data and take a proactive approach towards security hygiene.
The fact is, from marketers to criminals, there are many vying to monetize your personal information. Synthetic identity thieves, in particular, could do innumerable damage with just a single piece of PII. And once a crime is committed, detangling yourself from it could take years. So, keeping your data secure is always an easier option. Treat personally identifiable information with due respect and confidentiality, whether it’s in digital or hard copy format. Remember, a little bit of caution could go a long way to avoid years of distress and potentially irreversible consequences.