You might know what identity theft is. It’s when someone takes someone else’s personal and private information so that they can get something out of it…namely, money. What you might not know is what synthetic identity theft is. The goal is the same, but it’s a little different.
Synthetic Identity Theft
In the case of synthetic identity theft, a person makes up a new and fake identity by mixing up information from a real person with information that they create. You might not immediately see that this is a bad thing, but it can be pretty devastating.
Here are three ways that hackers can create a synthetic identity:
They Can Create a New Credit Profile
By far, the most common way that the bad guys use a synthetic identity is to create a new credit profile. Basically, they use a valid Social Security number, which they take from the victim, and pair it with a made-up name. Then, they start applying for credit with this information. Typically, these applications will get denied, but during this process, a credit profile is created. Even with poor credit, there are companies that give credit to people with bad credit, so the hackers know they can get a few hundred dollars out of this which can turn into a few thousand dollars or more.
They Can Piggyback
Another thing that people do with synthetic identity is a practice known as the piggyback. At a basic level, they look for individuals with great credit, and then they access their account. When they do this, they add a fake person as an authorized user. However, they don’t use this account. Instead, they bide their time and let it sit. While they wait, the major credit card agencies create a report of this synthetic identity, and the criminal hacker can use this new, great credit profile to apply for loans and credit cards.
They Practice Data Furnishing
Finally, they might use data furnishing. This is an effective, sophisticated method, and it requires someone else to help. Basically, the hacker needs access to someone like a manager or a small business owner from an established business. The company is already well-known, and it is approved to offer info on their customers…which they give to the hackers. A setup like this takes several months to set up, but once it is established, it can make the thieves a lot of cash.
Currently, it’s difficult to pinpoint how much financial impact these synthetic identities have, although it is thought that it could be billions of dollars in losses. For someone who gets into the business of synthetic identity theft, this could mean billions of dollars. Thankfully, there are a number of things that you can do to protect yourself, including being careful about what type of information you are sharing, especially when it comes to social media. Also, consider a credit freeze and ID theft protection, and make sure that you check your credit report regularly.
Written by Robert Siciliano, CEO of Credit Parent, Head of Training & Security Awareness Expert at Protect Now, #1 Best Selling Amazon author, Media Personality & Architect of CSI Protection Certification.