It’s no mystery that fraud is a rampant problem in today’s world. People and companies are losing billions to phishing scams, credit card information theft, identity theft, and more, but none of those threats are quite as sophisticated as synthetic identity fraud. 

Have you ever wanted to take a break from daily life and step into somebody else’s shoes for a while? Well, synthetic identity fraudsters take that notion a step further. They create the shoes. 

Synthetic identity fraud is when the fraudster uses a combination of real information, usually social security numbers, combined with invented information to create a whole new personality. These new personalities are used for all sorts of things, some more sinister than others. 

What Synthetic Identity Fraud is Used For

There are two kinds of synthetic identity fraudsters: people looking to steal money, and people looking for a new identity. 

The former is usually looking to build up to a major windfall down the road. They create their fake persona and try to open a credit card or credit account. This usually results in a rejection, but that rejection puts them into the system. 

From there, the fraudster makes small purchases under their new persona and slowly build up credit. 

The building up credit part of the scheme should theoretically be difficult, but it’s often all too easy for the criminal. Sometimes, the fraudster will “piggyback” on the account of an accomplice or an unsuspecting victim’s account gotten through information theft. Other times, they’ll pay a credit-boosting service to add them as an authorised user of another person’s card, particularly one with a long history and low utilization. 

Eventually, they are able to open accounts under their assumed name. Once this happens, they’re free to make as many purchases as possible before cutting free of the persona and making off with the money and items. 

Other uses of synthetic identity fraud involve creating personalities for illegal immigrants and evasion of authorities. 

Who are the Victims?

The most obvious victims are the merchants and credit card companies who lose money from the fraudulent charges. Some have even estimated that roughly 20% of credit losses are a result of synthetic identity fraud and that U.S. lenders alone lost $6 billion in 2016.

However, another kind of victim is the result of how the fraudsters obtain their social security numbers. 

Most of the SSNs used in this kind of fraud are stolen from minors with no credit history. Those minors then grow up and try to open credit accounts only to find that they have a horrible credit rating. 

Children born after 2011 are particularly at risk. In 2011, social security numbers became randomized rather than being tied to geography and date of birth. This means that it’s easier to fabricate new SSNs, and some of them are issued after having already been used by a fraudster. That means there are children who are already connected to credit card debt. 

How to Defend Against Synthetic Identity Fraud

Complex fraud like synthetic identity fraud has only become easier in recent times with the shift to online banking. On top of that, the lack of immediate victims makes tracking the fraudsters even harder. 

However, there are still measures that can be taken to prevent your SSN from falling into the wrong hands. 

For starters, be careful to keep your information as private as possible. Educating people on the threat of phishing scams is a strong start. Keeping up with communications from banking, credit card, and health insurance institutions that rely on a SSN or other valuable information can also mitigate risk. 

Be on the lookout for mail from credit card and banking companies that’s addressed to a different name. That could be a sign that an individual has been compromised. Offers Protection 

Additionally, identity protection and fraud prevention services can be a strong front line against synthetic identity fraud both for companies and individuals. offers a whole suite of anti-fraud protection tools designed on a continuously evolving platform to prevent all kinds of fraud, including synthetic identity fraud. Having the best tools on your side can be the difference that counts when it comes to fraud. Sign up for a free demo