What is synthetic identity theft + how does it work?

What is synthetic identity theft?

Synthetic identity theft is a type of identity theft in which an identity thief mixes real and fake information to create fake identities. 

For example, the thief may steal a legitimate Social Security number (SSN) and combine it with falsified personally identifiable information, such as a fake name, date of birth, and address, to create an entirely new identity.

How does synthetic identity theft work?

Unlike regular identity theft, synthetic identity theft can be hard to detect. This is because identity thieves commonly target vulnerable people like children, the elderly, the incarcerated, and the unhoused population when carrying out synthetic identity theft, as these groups are less likely to use credit or regularly check their credit reports.

How an identity criminal ends up with a legitimate SSN varies. In some cases, a fraudster may come across a lost wallet, while others involve purchasing legitimate SSNs on the dark web. 

Once an identity thief creates a synthetic identity, they usually use it for financial fraud, like applying for credit cards, loans, and unemployment benefits. Synthetic identities may also be used to launder money or commit other crimes.

It's important to remember that synthetic identity fraud doesn't usually happen overnight. Some identity thieves may spend years slowly constructing a synthetic identity, building a long credit history and a strong credit score to help make their false identity appear more believable. 

Detecting synthetic identity theft 

Synthetic identity theft is one of the hardest types of identity theft to detect because many financial institutions do not always have the proper filters in place to identify a false identity.

In addition, the identity thief may establish a long history of using the counterfeit identity responsibly before they use it for identity fraud. That way, when the criminal decides to use the synthetic identity for nefarious purposes, it looks as if a real person is experiencing sudden financial problems rather than an identity thief faking an identity for fraud.

With that in mind, there are still steps you can take to help increase your chances of catching synthetic identity theft, including checking the following places for warning signs:

• Your credit reports: You can do this at AnnualCreditReport.com, where you’re allowed to access one free credit report each year from each of the three major credit reporting agencies. By accessing a different report every four months, you can track your activity at no charge at different points throughout the year. Given the value placed on minors’ Social Security numbers, check your children’s credit reports as well. If you see unfamiliar activity, contact the credit agency. 
  
• Your annual Social Security statement: Since a fraudster might use a synthetic identity to obtain employment, it’s possible their income could show up on your statement. You want to make sure the amount on your statement aligns with what you know your income to be. If it doesn’t, contact the Social Security Administration.
  
• Your mail: Be on the lookout for mail sent to your address in someone else’s name. This could be a sign that creditors are trying to reach the thief—and your home address is mingled with information the identity thief has cobbled together.
  

Additionally, identity theft protection services like LifeLock Standard can help closely monitor your identity. From patrolling the dark web for your personal information to alerting you whenever there is fraudulent use of your SSN or other personally identifiable information, LifeLock can provide you with peace of mind.

How to protect yourself against synthetic identity theft 

With an understanding of how synthetic identity theft works and the ways you can help detect it, you may wonder how you can help prevent identity theft in the first place. Follow these protection tips to help reduce your risk of synthetic identity fraud.

• Secure your Social Security number: Keep your Social Security card and any documents that contain the number safe and secure. Before discarding any documents containing your personal information, be sure to shred them. The same goes for bank accounts, credit cards, and tax statements.
  
• Beware of phishing attempts: Whether over email, text, or phone, many identity thieves rely on phishing attacks to trick unsuspecting people into giving up their SSNs and other personally identifiable information.
  
• Freeze your credit reports: By freezing your credit reports, you can prevent identity thieves from opening an account in your name, even if they stole your SSN. If you have children, you may also consider freezing their credit reports, as they are often targeted in synthetic identity theft. And if you’re ever affected by synthetic identity theft, be sure to report it to the credit bureaus.
  
• Safeguard your personal information: From posting on social media to casually chatting in public, be sure to keep important information like your SSN, address, and other personally identifiable information private. That way, you can reduce the chances of an identity thief using your personal information for synthetic identity theft.
  

While you can never fully prevent synthetic identity fraud from occurring, following the above tips can help you decrease your chances of being affected by synthetic and other forms of identity theft. If it still happens to you, remember that reporting identity theft can help minimize the damage.

Help safeguard your identity with LifeLock Standard

When it comes to protecting your identity, let LifeLock do the heavy lifting for you. With LifeLock Standard, you can rest easy knowing that LifeLock closely monitors your credit, SSN, and personal information for fraudulent use. Plus, LifeLock will personally handle your case if your identity is compromised and connect you with experts that can help you restore it.

FAQs about synthetic identity theft

Read through this FAQ section to learn more about synthetic identity theft.

What is a synthetic identity used for?

An identity thief may use a synthetic identity for a variety of purposes, including:

• Loan fraud
  
• Credit card fraud
  
• Medical identity theft
  
• Tax fraud
  
• Employment-related fraud
  
• Criminal identity theft
  

What happens if you’re affected by synthetic identity theft?

If you become affected by synthetic identity theft, you might experience lasting effects, such as:

• Financial loss
  
• Credit damage
  
• Legal hassles
  
• Emotional stress
  
• Reputation damage
  

What is the difference between synthetic and regular identity theft?

Synthetic identity theft occurs when a criminal creates an identity instead of stealing an existing one. The scam involves mixing real Social Security numbers or fake numbers with other pieces of information—names, addresses, and birth dates—to put together an entirely new identity, often using partially fake identity information. 

In contrast, regular identity theft involves using the actual name, Social Security number, and other personal data of a single victim.

What is a synthetic identity theft example?

An example of synthetic identity theft is if an identity thief purchases your SSN from the dark web. From there, the identity thief uses a fake name, date of birth, and address to create a fictitious identity. After they create this identity, the fraudster can use it to apply for credit cards and commit financial fraud.