Fake Identities: Damages, Data, and Defense

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Synthetic identity theft involves pulling together a brand-new digital person made up of pieces from real consumers. Your Social Security Number could be combined with someone else's name, a third person's address, and a fourth person's purchasing history. 

In 2021, 11 people were charged in a vast fake identities scheme that cost banks more than $1 million. This is just the tip of the iceberg, experts say. 

As stealing real identities grows harder and harder, combining data from many becomes a more feasible way to commit crime.

What is synthetic identity fraud? 

Criminals use identity fraud to convince banks, credit unions, merchants, and other vendors to sell or give them money or merchandise. Synthetic identity fraud involves making up the identity used in those thefts. 

In an old-school identity theft, someone steals many parts of your online persona, such as your:

  • Name
  • Social Security Number
  • Physical address
  • Part of your account number
  • Employer's name
  • Driver's license number 

The criminal applies for loans or makes purchases in your name, but the contact information for those transactions goes back to the criminal and not you. 

In synthetic identity fraud, a criminal pieces together a brand-new digital person from many parts stolen from real people. The criminal works slowly, building up a credit rating for this new person. And eventually, they max out the benefits they can get and start again.

Should you be worried about synthetic identity theft?

You may struggle to understand why the average consumer should care about fake identities. You aren't held responsible for thefts that need only part of your identity. But the banks and credit unions you use are victims, and they can pass along their losses in higher fees and penalties you must pay. 

Synthetic identity theft is also on the rise, as it accounts for about 85 percent of all identity-based fraud. Anyone who wants to fight crime should be concerned. 

Some criminals are also abusing programs paid for with your taxes. In 2020, for example, researchers discovered fake identities in the Paycheck Protection Program made to help people recover from the coronavirus. 

Unfortunately, spotting synthetic identity theft isn't easy. Few victims know that their identities have been stolen, so they don't help companies spot the issue and fight back. And the crimes are slow to build, which makes them harder to monitor and prevent.

Fight synthetic identity theft 

You can help keep criminals from stealing your information.

Treat all of your financial information as personal. Don't share your card numbers, purchase history, or banking partnerships with anyone you don't trust. Monitor your accounts closely, and report anything that seems suspicious. 

If you're searching for a new financial partner, ask about their ability to keep your data safe. Do they use enhanced due diligence techniques to vet their customers? How do they safeguard your information? 

Find out more about how to defend against identity attacks on our blog


Frankenstein Fraud: How Synthetic Identities Became the Fastest-Growing Fraud Trend. (May 2021). Security Management. 

The Changing Face of Identity Theft. Identity Theft America. 

Synthetic Identity Fraud Worrying U.S. Regulators. (November 2020). Thomson Reuters. 

What Is Synthetic Fraud? (March 2021). Forbes.