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Synthetic ID Theft: Fastest Growing ID Fraud in U.S.

Synthetic ID Theft: Fastest Growing ID Fraud in U.S. - The Beacon

09-2014

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By: Jackie

Synthetic ID Theft: Fastest Growing ID Fraud in U.S.

There is a new type of ID theft in the United States called synthetic ID theft, your BBB has learned. According to a CBS Los Angeles news report, the Federal Trade Commission (FTC) has called it the fastest growing type of ID fraud in the U.S. Several years ago, the most prevalent type of ID theft was what experts call true name ID theft. In true name ID theft, thieves use all of the victim’s identifying information—name, date of birth, and Social Security number—to open new credit accounts without changing any of the information. They basically assume the victim’s identity. With this type of identity theft, continuous credit monitoring, fraud alerts and credit freezes alert the consumer pretty quickly that there is a problem.

Synthetic ID theft, on the other hand, is much more complicated. In synthetic ID theft, thieves steal your Social Security number, someone else’s name and address, someone else’s birth date, real or fake, and combine them into a new person. When the thieves open credit card accounts in the new person’s identity, the only bit of information that matches the “real” person is the Social Security number. This confuses the credit reporting system, and it creates a fragmented or sub-file to the victim’s main credit file. Since synthetic ID theft does not affect your main credit file, it often doesn’t show up on your credit report, so checking your credit report often, putting a fraud alert or credit freeze on your credit report won’t warn you or stop it from happening.

According to a study by ID Analytics, true name ID theft accounts for a small portion of all identity fraud, 10 – 15 percent, while synthetic identity fraud comprises 88.3 percent of the more than 16 million ID thefts in the United States each year and 73.8 percent of the total dollars lost by U.S. businesses. The FTC estimates that synthetic ID theft alone costs American businesses $50 billion per year in fraudulent charges.

Here are some actions consumers can take to avoid becoming victims of synthetic identity theft:

  1. Carefully examine your annual Social Security statement. Make sure that your reported income figure for the year is in line, and not over inflated from what you actually earned.
  2. Be on the lookout for mail that is sent to your home address with someone else’s name.
  3. Examine your credit reports on a regular basis, checking for potential inaccurate information and any unauthorized accounts. Go to annualcreditreport.com to get your free credit report.
  4. If you are turned down for a loan or a credit card, make sure the lender based their decision on your identity and your personal credit information, and not someone else’s.

For more information you can trust, visit bbb.org/evansville.

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Jackie

Jackie is the Operations and Education Foundation Assistant with the BBB. She assists consumers with business inquiries, and does presentations to senior groups and high school students. She is a regular contributor to the blog.