A criminal can do a lot with “only” your Social Security number, says a report from darkreading.com. Okay, so he doesn’t have the name that goes with the number. Big deal—he’ll just make one up to go with it! This is called synthetic identity theft.
And this crime has proven worthwhile for the crooks. Nowadays, there’s an increased risk for this crime, says a report by ID Analytics. This is because thieves exploit new SSN randomization practices, says Dr. Stephen Coggeshall, author of the report, and
chief analytics and science officer for ID Analytics.
In 2011, the SS Administration began issuing the numbers randomly rather than by pattern to help protect against ID theft. This change has backfired because it trips up anti-fraud technology that’s supposed to spot when a number, that was issued a few years
ago, is linked to a phony identity.
The implementation of chip-and-pin cards will fuel the risk and growth of synthetic ID theft. Chip-and-pin point-of-sale transactions will inspire ID theft specialists to figure out new fraud tactics. And they will. They always will. They’re not dumb.
The ID Analytics report says that this crime goes undetected for long stretches because there’s no specific consumer victim. Like, who’s Alekksandreya Puytwashrinjeku? Or, who’s John Smith? Alekksandreya will open up small accounts just to get some credit
going under “her” name. The next step is to apply for a big loan—that will never be paid.
The long-term nature of undetection allows the criminal to generate increasingly larger credit limits when compared to the typical ID theft case, says Coggeshall.
As you can see, there’s no actual consumer victim, but instead, the victims are the banks, along with the companies that offer the products that are illegally obtained by the fraudsters. The U.S. government is also a victim. The report explains that over
a time period of three years, nearly 1.4 percent of tax returns seemed to be synthetic, costing the government $20 million.
You don’t hear much, if at all, about synthetic ID theft, but the report also points out that a credit card issuer did an analysis and discovered that over a three year period, about two percent of the total application volume consisted of this type of crime.
Still, an identity that incorporates identity theft protection is less likely to be victimized and more secure. And synthetic identity theft can sometimes be detected by a protection service.