Synthetic Identity Fraud – What Is It?

by

According to a recent Bankrate article the most common type of Identity Theft is now “synthetic” identity theft which is explained as follows:

Thieves literally create new identities either by combining real and fake identifying information to establish new accounts with fictional identities or create the new identity from totally fake information.

In typical synthetic fraud, a fraudster uses a real Social Security number and combines it with a name other than the one associated with that number. The combination often doesn’t hit the consumer’s credit report, says Chris Jay Hoofnagle, senior staff attorney to the Samuelson Law, Technology and Public Policy Clinic and senior fellow with the Berkeley Center for Law and Technology at the University of California.

Synthetic fraud is quickly becoming the more common type of identity fraud, surpassing “true-name” identity fraud, which corresponds to actual consumers. In 2005, ID Analytics reported that synthetic identity fraud accounted for 74 percent of the total dollars lost by U.S. businesses to ID fraud and 88 percent of all identity fraud “events” — for example, new account openings and address changes.

“True-name identity fraud was the prevalent identity theft mode about five years ago,” says Steve Coggeshall, chief technology officer of ID Analytics. “Synthetic identity fraud is the dominant mode now.”

While this primarily affects creditors it can lead to collection agencies or debt collectors contacting the consumer based upon the social security number. Read the rest of the article for more information on this disturbing trend.

We appreciate the Consumerist pointing out this post to us in their blog today.

Another resource for you is to join our Facebook Fan Page – Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

by
Posted in:
Updated:

Comments are closed.

Contact Information