Synthetic identity theft may sound like the next “whodunnit” espionage novel, but it´s not. It´s a new spin on an old crime. As consumers, we should never underestimate the power of the criminal mind.
With news stories of ATM machines stolen from bank branches, laptops containing tens of thousands of consumer names, addresses and Social Security numbers stolen out of vehicles, and other hard-to-imagine events, you would think by now that identity thieves may have run out of ideas to steal your personal information. Well, think again.
The latest form of identity theft is called synthetic identity theft - and it may be the most complicated form of identity theft ever. Synthetic identity theft occurs when thieves create new identities either by combining real and fake identifying information to establish new accounts with fictional identities, or create a brand new identity from totally fake information.
Here´s an example: Let´s say a thief uses a real Social Security number from a real person, yet changes the name, thereby creating a “new person.” The Social Security number is real, but the name is fake. But now, this means that even fake people can get credit. Or, the thief establishes credit histories for fictitious persons by creating false businesses to establish credit accounts and to establish an employment history.
Let´s back up a little. Think of it this way: rather than traditional identity theft, where a crook steals someone´s personal identity, synthetic identity theft involves stealing “bits and pieces” of it. For example, a stolen Social Security number. For the synthetic identity thief, this gets the ball rolling. Consider that, with a stolen Social Security number, a thief can open new bank accounts, obtain new credit cards and even use it to get a job.
What´s more, since the only piece of information that matches the “real” person is the Social Security number, often times, the crime can go on undetected for many years. That´s because all the “bits and pieces” of personal information confuse the system - the computer programs are designed to try and “match” a person´s information using their name, address, Social Security number and so forth. If the computer doesn´t get a true “match” it moves on.
Collection agencies have the ability to perform what´s called a “Social search” on people´s Social Security number. That´s the key for the computer to try to find a record, or more exact, a current address for someone who has delinquent accounts. Since the Social Security number may be correct, an innocent consumer could hear from collection agencies.
How to fight back
Look very carefully at your annual Social Security statement. Make sure that your reported income figure for the year is in line, and not over inflated from what you actually earned. Additionally, you can order your Social Security statement throughout the year to check for social security taxes you have paid on your income. You can even view it online, if you prefer.
Be on the lookout for mail that is sent to your home address with someone else´s name.
Review your credit reports on a regular basis, checking for potential inaccurate information and any unauthorized accounts.
If you are denied credit, make sure the lender based their decision on your identity and your personal credit information, and not someone else's.
Consider investing in an identity theft protection product, such as ProtectMyID™, which will monitor your personal credit information, scour the Internet for unauthorized use of your Social Security number, credit cards, and debit cards and alert you if key changes are detected. ProtectMyID also offers $1 Million Identify Theft Insurance coverage.
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