Published: January 22, 2025 on our newsletter Security Fraud News & Alerts Newsletter.
Imagine a crime straight out of a sci-fi thriller: criminals piecing together parts of people’s identities to create entirely new personas. This isn’t fiction—it’s a growing danger known as synthetic identity fraud, or “Frankenstein fraud,” where thieves use fragments of stolen identities to wreak havoc.
The Anatomy of Frankenstein Fraud
At its core, synthetic identity theft involves stealing a Social Security number (SSN) and combining it with fake or unrelated personal details—like a different name, address, or birthdate—to fabricate a brand-new identity. The culprits often target the most vulnerable: children, the elderly, or the homeless.
Why these groups? They’re less likely to monitor their credit activity, giving fraudsters the time they need to build a convincing financial profile. Once the criminal has established this fraudulent identity, they use it to take out loans or credit cards, leaving the real SSN owner with the consequences.
This alarming crime isn’t new, but its scope is staggering. Synthetic identity theft caused $20 billion in losses in 2020 alone, according to FiVerity. Shockingly, fraud expert Frank McKenna estimates that up to 15 million U.S. consumers have fallen victim to this scam—many without even realizing it.
How Does Synthetic Identity Fraud Work?
Patience is key for fraudsters. Using an SSN, often acquired from data breaches, phishing scams, or dark web purchases, they combine it with fictitious details to apply for credit. Initially, applications are rejected because no record exists for the synthetic identity.
But here’s where the system falters: applying for credit introduces the synthetic identity to credit bureaus, which recognize it as a “real” person. Over time, the fraudsters build creditworthiness by paying off small balances. Once the fake identity achieves a strong credit score, the thieves max out loans and credit cards, disappearing with the money—and leaving the victim and lenders to clean up the mess.
The Personal Fallout
The aftermath of synthetic identity theft can be devastating. Victims might discover ruined credit scores, collection notices for debts they didn’t incur, or even issues with their Social Security benefits. For children, the damage may not surface until they’re old enough to apply for credit, only to find their financial future compromised.
Protect Yourself from Synthetic Identity Fraud
While the risks are real, there are steps you can take to safeguard your Social Security number and other personal information:
1. Freeze Your Credit
A credit freeze prevents anyone—including you—from opening new accounts in your name without first lifting the freeze. This is a crucial defense, especially for children and seniors. Freezing a child’s credit involves additional steps, but it’s worth the effort.
2. Monitor Your Credit Reports
Regularly review your credit reports for any unfamiliar names, addresses, or accounts. Free tools like AnnualCreditReport.com offer weekly access to your credit reports. You can also use credit monitoring services like CreditWise or identity theft protection programs for added security.
3. Beware of Phishing Scams
Thieves may try to trick you into sharing your SSN through emails or calls pretending to be from your bank or government agencies. Always verify the source—contact organizations directly using official numbers. Be cautious of urgent messages filled with typos or demanding immediate action.
4. Secure Your Documents
Keep physical copies of sensitive documents, like tax returns, in a secure location. Shred unnecessary paperwork and delete electronic files containing your SSN.
5. Check Social Security Statements
Monitor your Social Security account to ensure no one is using your SSN for fraudulent employment or benefits claims. You can easily access your statements online and even lock your number for extra protection.
Stay Vigilant
Synthetic identity fraud may be complex, but awareness is your best defense. By taking proactive steps to protect your personal information, you can stay one step ahead of the cybercriminals. After all, in this digital age, safeguarding your identity isn’t just smart—it’s essential.
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