Synthetic Identity Theft: A Growing Threat in the Digital Age

In today’s digital landscape, identity theft has become more sophisticated and dangerous. Among the many types of identity fraud, synthetic identity theft is emerging as the fastest-growing and hardest-to-detect form. Unlike traditional identity theft, synthetic identity fraud involves the creation of entirely new identities using a mix of real and fictitious data, making it incredibly challenging for institutions and individuals to spot.

As cybercriminals become more innovative, understanding how synthetic identity theft works and how to defend against it is more critical than ever. This blog will explain synthetic identity theft, how it differs from traditional forms, how to detect and prevent it, and what steps to take if you believe you’ve been affected.

What is Synthetic Identity Theft?

Synthetic identity theft occurs when criminals create a new identity by combining factual information like a Social Security Number (SSN) with fake or fabricated data such as a false name, date of birth, or address. These “synthetic identities” can appear legitimate and pass many standard fraud detection systems.

The goal of synthetic identity theft isn’t to impersonate a specific person. Instead, fraudsters create a fictional person to open new accounts, build credit, and eventually “bust out” by maxing out lines of credit before disappearing.

What is Synthetic Identity Fraud?

Synthetic identity fraud is using a synthetic identity to commit financial fraud. Criminals use these identities to:

• Open bank accounts
  
• Apply for credit cards or loans.
  
• Purchase products or services on credit
  
• Evade law enforcement or immigration checks.
  

Because the identity is partially real, fraud detection systems often don’t flag the activity as suspicious. Over time, these accounts gain trust and value for the fraudster.

How Does Synthetic Identity Theft Work?

The process typically follows these steps:

1. Data Collection: The criminal obtains a real Social Security Number, often belonging to a minor, older adult, or someone who doesn’t use credit actively.
   
2. Identity Creation: They combine the SSN with a fake name, birthdate, and address to build a new profile.
   
3. Credit File Establishment: They apply for credit. Initial applications may be denied, but the credit bureaus create a file for this new identity.
   
4. Credit Building: The criminal continues applying for credit or becomes an authorized user on another account to build credit history.
   
5. Bust-Out Phase: Once the synthetic identity has a good credit score, the fraudster maxes out credit cards or takes out large loans and disappears.

What is the difference between synthetic and regular identity theft?

Regular Identity Theft and Synthetic Identity Theft both involve the misuse of personal information, but they differ in key ways:

1. Identity Source

• Traditional Identity Theft: The thief steals and uses all of a real person’s identity, such as their full name, Social Security Number (SSN), date of birth, address, and other personal details, to impersonate them directly.
  
• Synthetic Identity Theft: The thief creates a new, fake identity by combining factual information (like a stolen SSN) with fabricated data (phony name, birthdate, address). The goal isn’t to impersonate a specific person, but to build a brand-new “person” from scratch.

2. Victim Impact

• Traditional: Victims often notice quickly because their existing accounts get accessed or new accounts appear in their name.
  
• Synthetic: Victims (especially children or inactive SSNs) may not even realize their information is being used, sometimes for years, since the identity is partially fake and doesn’t directly connect back to them at first.

3. Detection

• Traditional: Easier to detect due to immediate disruptions (e.g., fraudulent charges).
  
• Synthetic: Harder to detect because the fake identity often builds a normal-looking credit history over time.

What do people use synthetic identity theft for?

Criminals use synthetic identities for financial gain, fraud, and sometimes even criminal cover. Here are the most common uses:

1. Credit Fraud

• They use synthetic identities to apply for credit cards, personal loans, or car loans. After establishing trust and building credit, they max out the credit and vanish. This tactic is known as “bust-out fraud.”

2. Opening Bank Accounts

• Fraudsters open bank accounts to launder money or issue fraudulent checks under synthetic names.

3. Committing Tax Fraud

• They may file false tax returns using synthetic identities to claim refunds from the IRS.

4. Evading Law Enforcement or Immigration

• Some use synthetic identities to hide criminal records, immigration status, or for illegal employment.

5. Buying Goods or Services

• With a fake identity and good credit, they can purchase expensive items (electronics, cars, etc.) on credit with no intention of repaying.

How to Detect Synthetic Identities?

Detecting synthetic identities is complex, but not impossible. Here are some red flags:

• A credit report linked to multiple Social Security Numbers or addresses
  
• A Social Security Number tied to multiple names or birthdates
  
• Inconsistent application data across different institutions
  
• Limited activity on a credit file for an extended period, followed by sudden spikes
  

Financial institutions increasingly use AI and machine learning tools to identify these anomalies and flag synthetic identities.

What Are the Signs You Might Be a Victim of Synthetic Identity Theft?

If your identity is partially used to create a synthetic one, you might notice:

• A sudden drop in your credit score
  
• Accounts or credit lines on your credit report that you didn’t open
  
• Collection calls or letters for unfamiliar debts
  
• Denied credit applications despite a strong credit history
  
• Tax filing issues due to someone using your SSN

How to Prevent Synthetic Identity Theft?

Protecting yourself requires proactive measures:

1. Monitor Your Credit Regularly

Check your credit reports from all three major bureaus, Equifax, Experian, and TransUnion, at least once a year. You can get them free at AnnualCreditReport.com.

Look for:

• Accounts you didn’t open
  
• Names or addresses you don’t recognize
  
• Social Security Number inconsistencies

Use credit monitoring services to receive alerts about suspicious activity in real time.

2. Freeze Your Credit

A credit freeze prevents lenders from accessing your credit report, which blocks fraudsters from opening new accounts even if they have your information.

You can freeze your credit for free with:

• Equifax
  
• Experian
  
• TransUnion

Also consider freezing your child’s credit to prevent their SSN from being used in synthetic identities. Children are common targets because they typically don’t use credit until a certain age.

3. Safeguard Your Personal Information

Limit how and where you share personal data:

• Never share your Social Security Number unless it’s legally required.
  
• Shred sensitive documents like bank statements, medical bills, or anything with personal data before throwing them away.
  
• Be cautious of phishing emails, texts, or calls that trick you into giving out personal information.

4. Protect Online Accounts

Strong cybersecurity helps keep personal information from being stolen in data breaches.

• Use strong, unique passwords for each account.
  
• Enable two-factor authentication (2FA) wherever possible.
  
• Avoid using public Wi-Fi for banking or other sensitive transactions.s
  
• Keep your devices and software up to date

5. Monitor Your Child’s Identity

Children are prime targets for synthetic identity theft because their credit is rarely checked.

Take these steps:

• Request a credit report for your child to see if one exists (it shouldn’t)
  
• Freeze their credit through the credit bureaus.
  
• Watch for signs such as:
  
  • Pre-approved credit offers in their name
    
  • Denials of government benefits due to “existing records”
    

6. Be Alert After Data Breaches

If you’re being notified that your personal information was exposed in a data breach:

• Change your passwords immediately
  
• Monitor your credit closely.
  
• Consider placing a fraud alert or freeze on your credit.
  
• Watch for identity theft red flags like new accounts or suspicious charges.s
  

7. Use Identity Theft Protection Services (Optional)

If you prefer more automated protection, consider signing up for an identity theft protection service. These services monitor your SSN, credit, and dark web activity and alert you to suspicious changes.

Just be sure to choose a reputable provider, and remember that no service can guarantee complete protection.

8. Be Cautious With Social Media

Cybercriminals gather information from public profiles to help build synthetic identities.

• Avoid sharing your birthday, full name, or address.
  
• Don’t post photos of official documents (even your vaccination card)
  
• Set your privacy settings to limit who can see your content.

How to Report Synthetic Identity Theft?

If you suspect you’re a victim of synthetic identity theft, take action immediately. Here’s what you should do:

1. Contact the Credit Bureaus

• Place a fraud alert on your credit reports with one bureau—they will notify the other two.
  
• Consider placing a credit freeze to prevent new accounts from being opened.
  

Contact Info:

• Equifax: 1-800-525-6285
  
• Experian: 1-888-397-3742
  
• TransUnion: 1-800-680-7289
  

2. File a Report with the Federal Trade Commission (FTC)

• Visit IdentityTheft.gov to file an official identity theft report.
  
• The FTC will generate a recovery plan based on your situation and provide documentation you can use with banks or credit agencies.
  

3. Contact the Affected Institutions

• Call your bank, credit card companies, or lenders where the fraudulent accounts or transactions occurred.
  
• Provide the FTC report and any supporting documents to dispute the charges.
  

4. File a Police Report

• Go to your local police department with:
  
  • A government-issued ID
    
  • Proof of address
    
  • A copy of the FTC identity theft report
    
  • Any evidence of the fraud
    

5. Notify the Social Security Administration (SSA)

• If you use your Social Security Number in a synthetic identity, call the SSA Fraud Hotline at 1-800-269-0271 or visit https://oig.ssa.gov.
  

6. Monitor Your Credit and Accounts Closely

• Continue monitoring your credit reports and bank statements.
  
• Consider enrolling in identity theft protection or credit monitoring services for added security.

How to Safeguard Your Identity with AstrillVPN?

Using AstrillVPN is an effective way to safeguard your identity online by encrypting your internet traffic and masking your IP address. Connecting to the internet through AstrillVPN creates a secure tunnel between your device and the VPN server. This encryption protects your data from hackers, trackers, and even your internet service provider, making it extremely difficult for anyone to intercept your personal information, such as your location, browsing history, or login credentials. This is especially important when using public Wi-Fi networks, where data theft is a common risk.

AstrillVPN also helps prevent identity theft by hiding your real IP address and replacing it with one from a secure server in another location. This makes it harder for cybercriminals to trace your activity or target you with phishing attacks and scams. With features like StealthVPN, DNS leak protection, kill switch, and multi-device support, Astrill ensures your digital footprint stays hidden across all platforms. Using AstrillVPN consistently adds a strong layer of protection that helps keep your identity safe from evolving cyber threats.

Conclusion

Synthetic identity theft represents a dangerous evolution in cybercrime. Staying vigilant is essential because it often flies under the radar of traditional fraud detection systems. Regularly checking your credit, safeguarding your personal information, and taking swift action when you notice suspicious activity can help protect you and your loved ones.

As identity thieves continue to develop more advanced techniques, awareness and education remain our strongest lines of defense. Understanding how synthetic identity theft works empowers you to take proactive steps to secure your digital life.

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