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Synthetic Identity Theft Explained And Why You Should Care

As your resource for all things data privacy, we like to break complicated issues down so that everyone can understand how to take control of their data. This week’s topic is synthetic identity fraud, a relatively new and frightening issue. As detecting stolen identities has become easier, criminals have created a new level of deceit. That is, creating completely new identities to exploit for their nefarious uses.

How It Works

Using a mixture of fake and real information, these criminals are able to assemble a profile. They’ll use a fake name and their own address, for example, but they’ll pull a real child’s social security number to legitimize the effort. With that information in tow, the thieves apply for a credit card. And although that application gets rejected due to the lack of a credit profile, the name is logged in the system effectively creating a record. Then, that person can be added to someone else’s existing account. That account typically belongs to an accomplice, or someone who doesn’t ask too many questions.

The thieves can also pay a credit-boosting company for the persona to be temporarily added as an authorized user to someone else’s card. Over time, a credit history gets established, and the synthetic composite of information becomes more legitimate. It’s a long con, but many of these synthetic identity thefts are willing to wait for that credit to be established. And all of this for what? Once that credit is established, the thief charges it to the limit and then cuts ties. Sometimes it’s a method used by illegal immigrants to allow them to live or work in the United States. And lastly, sometimes people do it to repair a damaged credit history.

What You Can Do

The main target of this kind of cybercrime are children, and unfortunately they can suffer some consequences. When applying for their first student loan, credit card, or car loan, they could be hit with some unexpected news. Here are a couple tips to help you prevent this misfortune.

  • Be careful: Avoid listing your child’s social security number, or your own, unless absolutely necessary.
  • Read agreements: Anytime you do provide your child’s (or your own) social security number on a form, read it very carefully. Ask questions and challenge the point of contact to fully understand potential repercussions.
  • Freeze your child’s credit: this option only helps with credit identity theft, but it can’t hurt. Here’s a quick guide to help you do that.


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