Synthetic identity theft differs from other forms of identity fraud in one big way: instead of trying to assume a victim’s identity, criminals use the victim’s information to create a new identity, which they then use to rack up debt on credit cards and more. It’s ingenious, really, and usually hard to detect. In the past, people who were looking to circumnavigate their negative credit ratings committed synthetic identity theft. Typically, a parent or family member would steal their child’s identity in order to get a credit card or qualify for loans. The victims would only find out about the crime many years later as they started to apply for credit cards or loans using their own information. This left many children with two options: fix the issue by reporting their parents to the police or say nothing and take the hit on their own credit reports. Over the years, the crime has evolved to something more nefarious. It is such a lucrative, and somewhat easy, endeavor, that it is now favored by organized crime syndicates. Children are still the preferred targets, but nobody is immune. Here is how it works and what to look out for.
How it Works
Synthetic identity theft often hinges on stolen social security numbers (SSN). The Social Security Administration’s “Identity Theft and your Social Security Number” brochure reminds/warns/exclaims (in big bold letters) that “your number is confidential.” It’s a nice sentiment, but we all know that isn’t exactly the case. Just think about all the places your SSN ends up. Job applications, banks, medical records and nearly anything you do with any government agency. All these places that have your SSN info have proven to be great hacker honey pots. Remember the Office of Personnel Management data breach in June of 2015? Hackers stole 21.5 million SSNs. What, pray tell, do you think they are going to use that info for? Hopefully those government employees and military members who had their info stolen have LifeLock identity theft protection. Anybody can receive fraud alerts on its Facebook page.
Once the criminals get your social security numbers, they can use those numbers to create new identities. Criminals then use the fake identities to apply for credit cards. This is where it gets interesting. Criminals know that people with better credit ratings get higher credit card limits. So, the criminals let accounts mature so they can steal even more money via the credit cards. Often times, these criminals use a child’s information, which improves their odds of not getting caught since children don’t apply for loans and most parents don’t monitor their child’s credit.
What to Look For?
Often times, some legwork can help you pinpoint the identity crime before it gets too bad. According to the National Conference of State Legislatures, an organization that has been monitoring the rise of synthetic identity theft, there are five signs that point to a child’s information being used for synthetic identity theft, all of which have to do with being contacted about a child’s employment or tax situation when a child obviously won’t have any work history or taxes. Adults should be proactive and use data-based services to monitor their entire family’s SSN. Otherwise, you’ll learn about the crime when you apply or a loan and credit card or try to get job and your SSN is matched to another person. By then, it is probably too late. You are going to have a huge credit mess to clean up.