Synthetic Identity Fraud
someone uses your Social Security number on a credit
application, you might not find out about it. Not even if you
checked your credit report.
You could be a victim of synthetic
-- a rapidly growing type of ID fraud. Thieves literally create
new identities either by combining real and fake identifying
information to establish new accounts with fictional identities
or create the new identity from totally fake information.
typical synthetic fraud, a fraudster uses a real Social Security
number and combines it with a name other than the one associated
with that number. The combination often doesn't hit the
consumer's credit report, says Chris Jay Hoofnagle, senior staff
attorney to the Samuelson Law, Technology and Public Policy
Clinic and senior fellow with the
for Law and Technology at the
Synthetic fraud is quickly becoming the more common type of
identity fraud, surpassing "true-name" identity fraud,
which corresponds to actual consumers. In 2005, ID Analytics
reported that synthetic identity fraud accounted for 74 percent
of the total dollars lost by U.S. businesses to ID fraud and 88
percent of all identity fraud "events" -- for example,
new account openings and address changes.
identity fraud was the prevalent identity theft mode about five
years ago," says Steve Coggeshall, chief technology officer
of ID Analytics. "Synthetic identity fraud is the dominant
vs. true-name ID fraud
ID fraud should not be confused with true-name
identity fraud. Real people's identities are
assumed in true-name ID fraud, whereas in
synthetic fraud scammers create a whole new
identity to open a new account. Here are some of
the main differences.
of new account
on victim's credit history
on victim's credit reports
of new account
fake and real consumer information
or all false information to open an
account. Social Security numbers
and/or names might be changed to
create new identities.
real identifying information is used
without modification. The fraudster
poses as the actual consumer.
should you care?
Synthetic identity fraud mainly hurts creditors, but it affects
consumers in three main ways.
Consumers are partially paying for it.
Indeed, creditors do bear the financial burden of fraud losses.
Still, they pass some of those costs on to consumers through
fees and higher interest rates, says Hoofnagle. "Although
it's diffuse, we're talking at least tens of billions of
Debt collectors could come after innocent consumers.
There could be a consumer victim if a creditor ignored the
fictitious name given and pursued the individual whose Social
Security number was used, he says. Collection agencies have the
ability to perform "Social searches" on Social
Security numbers to find current addresses for delinquent
debtors. A Social search will also turn up names associated with
that Social Security number, which means innocent consumers
could hear from debt collectors.
synthetic identity fraud
Synthetic ID fraud creates file variations at the credit
The other problem is that synthetic ID fraud creates subfiles at
the credit bureaus, says Hoofnagle. The term subfile,
says Evan Hendricks, author of "Credit Scores and Credit
Reports," refers to additional credit report information
tied to a real consumer's Social Security number, but someone
else's name. Because the identifying information contains some
data that's already linked to a particular consumer, the subfile
gets associated with the consumer's main file, or "A"
can surface when a creditor checking a consumer's credit report
asks for all the possible files related to that consumer -- if
they want all the files associated with a particular Social
problem comes in when negative information gets entered under a
subfile that is then linked to, but doesn't actually belong to,
you. If you have good credit and derogatory information is going
into your subfile, that could negatively impact your ability to
get credit, he says.
in credit files are natural
Extra file information is possible because of the way
information gets collected and stored at the credit reporting
agencies. "The algorithms allow for partial matching so
they'll accept a Social Security number that's not exactly the
same or a name or address that's not exactly the same as long as
enough things match up," says Hendricks.
Yet variations are not always due to the work of fraudsters,
says Maxine Sweet, Experian's vice president of public
not unusual for a Social Security number to be reported to us
that's associated with more than one name," she says.
"In some cases it might be an indication of fraud, but in
most cases it's just an indication that there were some
variations in the data as it was provided to us."
says variations can occur due to typos; for instance, when a
creditor types in the information from an application to request
a credit report on a consumer. Two names could also get
associated with one Social Security number; for example, when a
woman changes her name after marriage.
simply take advantage of these misspellings, typos and other
natural variations and cash in on them.
you can do about synthetic ID fraud
Consumers can employ traditional methods of detecting identity
theft: ordering credit reports and checking them carefully for
erroneous information and accounts that don't belong to them,
and keeping an eye out for suspicious mail.
also should make sure that creditors, if they deny you credit,
based their decisions on your credit file information only.
Check your credit reports.
First, look for accounts that don't belong and report them to
the credit bureaus. Also, watch out for inaccurate versions of
your name, address or Social Security number.
synthetic identity information doesn't always appear on your
credit report, "sometimes this stuff will show up,"
says Hendricks. "It's just case by case. So, it's
definitely still a good idea to check your credit report
Watch your mailbox.
Look out for suspicious mail, such as change-of-address notices
and credit offers with significant variations on your name.
Notify the credit bureaus of your correct name. Contact your
post office if you didn't initiate an address change.
Monitor your Social Security number.
"Credit monitoring doesn't help," says Avivah Litan, a
vice president and analyst at Gartner Inc., of its ability to
detect synthetic identity fraud. Credit monitoring won't catch
instances where the fraudster uses a different name, date of
birth or address along with the consumer's real Social Security
there are identity monitoring services out there, such as Intelius
that will, for a fee, scour the Web, black market and public
records for personal and financial information belonging to the
subscriber, such as an address, credit card number or Social
Security number. Unlike credit monitoring, the service doesn't
rely on a Social Security number matching other identifying
not all-inclusive, cautions Litan, who says they are only 60
percent to 70 percent reliable at the moment. They're only as
good as their data sources, she says, so scrutinize the
product's description before you buy.
can also order a
free public records report
once a year.
find out if someone is using your Social Security number to
obtain employment, you can order your Social Security Statement,
which provides a record of the earnings on which you have paid
Social Security taxes, online,
via snail mail, by
calling (800) 772-1213, or by going to your local Social
Security Administration office. Call the fraud hot line at (800)
269-0271 if you find earnings you don't recognize.
cannot find out if another person's consumer credit report is
associated with their Social Security number because of privacy
issues, Sweet says.
Scrutinize credit denial letters.
If you get turned down for credit, make sure the decision was
based on your file information only. "If they're turning
you down and you think there's a possibility they may have
gotten the wrong file, look to see if they sent you your letter
with all the right identifying information," says Sweet.
Follow up with the creditor if the information is wrong and ask
them to check your credit again, after they verify your
identity, she says.