Synthetic identity fraud emerges as growing threat

Will the real you please stand up? I'm not trying to be funny, I just want to alert you to a new and emerging trend among ID-theft criminals who create a "synthetic" you. Most consumers think of identity theft as a financial event involving our Social Security numbers, credit- and debit-card numbers, banking account and loan numbers.

It's time to rethink your vulnerability to ID theft because synthetic identity theft and fraud is very lucrative for the bad guys. Criminals more than ever are stealing personally identifiable information to create a new, fictitious person and/or credit-bureau account. This creates a monster headache for those who are victimized, as recovering from synthetic ID theft can take months or years to fix.

Synthetic identity theft and fraud often includes a combination of fake and real credentials using names, Social Security numbers, driver's licenses and employee identification numbers to create new "synthetic" or fake identities. Traditional identity theft uses an individual's actual name, Social Security number and other personal information without changing the stolen information — the identity thief pretends to be 100 percent you.

Since synthetic identity theft and fraud uses only some of your actual personal credentials, the fraud does not always show up on your credit-bureau report. Conversely, if negative information is attached to another file that is linked to your credit-bureau report file, this can negatively impact your credit report and credit score.

Synthetic identity theft and fraud is problematic for the credit bureaus to detect, as the information is not an exact match, thus it is difficult to reconcile. Credit bureaus respond to a high volume of mistakes and other incorrect information due to typos, name changes and similar names every day. ID-theft criminals know this and exploit the weakness.

Criminals need only a minimal amount of your true information to commit synthetic ID Theft. This is what makes synthetic ID theft appealing to criminals: They do not need 100 percent of your personal information, they simply "synthesize" it.

As an example, an ID-theft criminal uses your Social Security number and slightly changes other credentials such as your name and address in order to create a new, synthetic identity out of thin air. Based on this new identity, the criminal can open new accounts tied to the fake name and slightly altered credentials. As a result, this new "person" can apply for a job, a new credit card and/or a new cellphone. The worst part is, the credit bureaus won't immediately know that this isn't a real person. At some point it will catch up to the real person — you or me!

Mark's most important: Synthetic-identity theft and fraud is a serious threat, so check your credit-bureau report quarterly at no cost through annualcreditreport.com.

Mark Pribish is vice president and ID-theft practice leader at Merchants Information Solutions Inc., a national ID-theft and background-screening provider based in Phoenix. Reach him at markpribish@merchantsinfo.com.