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Synthetic Identity Fraud is defined as when the fraudster combines real and fake identities to create a new identity and thus creates fake accounts makes purchases by use of credit cards and other means the fraudsters also use this type of fraud to fake driver’s licences, open deposit accounts and fake passports. Synthetic identity fraud accounts for 80% -85%of all identity frauds.
This type of fraud is on the rise where scamsters do not steal credit cards etc but create fake identities and mix with real cards by changing photos, date of birth etc.
This type of fraud is also that of cyber criminals.
Thus, constructing Fake People in order to get Real credit cards.
Fraudsters secure inactive social security numbers or not frequently used numbers like that of children or old persons and such numbers or accounts are used by scamsters by substituting or pairing with names not related to such vital information and obtain credit cards or open fake accounts or deposits and for online purchases and other unlawful activities etc.
Such above activities are called “synthetic identity frauds” where no theft as such is involved but duplicate identity is used to manipulate.
Billions of dollars are lost in, Canada, north America due to the emergence of this type of synthetic identity frauds.
Thus, synthetic identity is created simply out of thin air!
This type of fraud has now taken top of the crime charts to deal with by police as well as fraud investigators and poses a big challenge.
Fraudsters secure information from data banks of credit rating agencies who have the data bank of millions of people that deal with banks & other NBCs and take loans.
The data is stored and full information is available. It is about 15 years since the onset of Synthetic frauds and are on the increase ever since and no signs of slowing down.80% of the synthetic frauds are credit card related.
It is a combination of real information and fabricated data. In 2013 in the US 18 fraudsters were charged with the intention of fabricating over 7000 identities of credit card holders and plotting to steal $200 Million.
Thus, the following stages are involved in synthetic frauds:
1.Obtaining the social security numbers or such personal identification details, passport details and driving licences details.
2.Fabricating name and photos on such cards or other documents.
3. Create false birth dates to match with that the photos affixed.
4. Create false addresses to get information and correspondence.
5. Provide phone numbers that are not traceable or go stale after sometime.
Data breaches of banks, credit rating agencies are one of the main source of leakage of personal information.
Equifax had a big data breach :
Synthetic identity theft posses another serious problem of attaching the negative and derogatory information of the fragmented portion attached by the scamster to that of the real owner.
Thus, a sub file is created but it does not affect the main credit file of the real owner.
It takes much time after the fraud hits the real owner that the creditors will start looking at the real owner and come after him for their dues, used up by the fraudster.
Thus it is difficult to detect synthetic identity frauds in their initial stages until much damage is done.