Synthetic Identity Theft

One of the first steps a victim of financial identity theft is told is to check their credit reports.  These documents are crucial for a victim to identify specific acts of fraudulent activity, so they can then know which creditors will need to be notified.  But what if you were a victim and didn’t know it, EVEN after checking your credit report?

A particularly nasty variance of identity theft that is becoming ever-more common is known as synthetic identity theft.  Typically, this occurs when a thief uses all or part of someone’s social security number, and then combines that with another name and birth date and/or birth certificate (a potential second victim).  This type of identity theft is significantly more difficult to track because the fraudulent activity probably won’t show up on either victim’s credit report directly.  Instead, often times the CRA’s (Credit Reporting Agencies) will track the fraudulent information as an entirely new credit file or as a sub-file in one of the victim’s credit reports.

It is important to understand that this information can still negatively impact an individual’s ability to garner credit, and may create various other identity and credibility issues for the victim to deal with.  In addition, since this type of identity theft leaves a more confusing paper trail, the thief can often use this synthetic identity for a longer time before being figured out by creditors.  In the meantime the creditors continue to unknowingly grant the thief fraudulent lines of credit.  This creates a higher average loss in dollars for creditors and merchants.

Unfortunately it is harder to protect oneself from this hybrid form of identity theft beyond the traditional mitigation efforts available to people for financial identity theft.  Developing a “hyper awareness” about your personal information and where it might be used is the most important criteria for noticing things that may indicate a problem.   Carefully scrutinize your credit reports for incorrect information, particularly if you are denied credit based on what a creditor sees on your report.  Pay attention if you continually get mail at your residence addressed to someone else, and contact your local social security office annually to have them furnish you an earnings history report.  If you find any discrepancies in your earnings history report contact the SSI Office of the Inspector General at (800) 269-0271.

Any evidence of financial fraud on your credit report should be reported to the credit issuing organization listed (i.e. for a fraudulent visa bill, you need to contact visa).  Any type of fraud will require you to acquire a police report from your local law enforcement.   Synthetic Identity Theft makes it more difficult to understand that you may be a victim in the first place, and more difficult to clear up matters in the second place.  But the damage to your good name can be no different than a classic financial identity theft case, and should be taken with equal seriousness.