Read Our Reviews
Contact Us
Each time we publish a new article you can receive a notifcation and link. Its the best way to stay up to date with consumer law. Plus, you'll receive our monthly newsletter.
Identity theft is always evolving, and one of the most insidious forms is synthetic identity fraud. Unlike traditional identity theft, where a fraudster steals and uses an existing identity, synthetic identity fraud involves creating a new identity by combining real and fake information; this sophisticated method allows criminals to operate undetected for years, making synthetic identity fraud detection incredibly challenging.
Financial institutions and law enforcement struggle to identify synthetic identities because these fraudulent profiles often behave like real people. Unlike typical identity theft cases, where a victim reports suspicious activity, synthetic fraud victims may not even realize they’ve been targeted. Fraudsters also play the long game, slowly building up credit over time before making large withdrawals and disappearing.
Take, for example, a fraudster who uses the SSN of a deceased individual and creates a fictional person named “David Carter.” Over several years, David has applied for low-limit credit cards, made consistent payments, and gradually built trust with banks. David appears to be a responsible borrower to creditors, so they offer him higher credit limits. By the time he takes out a major loan and vanishes, the financial system has no obvious red flags—only an empty account and a fraudulent history left behind.
Another reason detection is difficult is that synthetic identities often pass automated verification systems. Many banks and lenders rely on algorithms to check an applicant’s credit history, and because synthetic identities develop real credit records, they don’t trigger fraud alerts.
Many synthetic identity fraud victims don’t discover the issue until years later. A parent might apply for student financial aid for their child, only to learn that their Social Security number has been used for years, tied to unpaid debts and loans they never took out. Others might only realize their SSN was compromised when they are unexpectedly denied credit or contacted by debt collectors.
Because synthetic identity fraud detection is difficult, prevention is key. Child identity theft preventative measures can help work to detect sythethics identity theft in its early stages.
Take action if you suspect you’ve been targeted for identity fraud. Consumer protection attorneys can help dispute fraudulent accounts, repair your credit, and hold financial institutions accountable for failing to detect the fraud.
Synthetic identity fraud detection remains one of the biggest and most difficult challenges in financial security. However, by understanding how these schemes work and taking proactive steps to protect personal information, you can reduce your risk and avoid fraudsters.
If you or your loved one’s lives have been turned upside down by identity theft, don’t feel powerless; help is available.
