The Rise of Synthetic Identity Theft and What You Need to Know

Introduction

Identity theft continues to evolve, and, one of the most dangerous threats is synthetic identity theft. Unlike traditional identity theft, where criminals steal existing personal information, synthetic identity theft involves the creation of entirely new identities using real and fictitious data. This type of fraud is harder to detect and can have devastating consequences for both individuals and businesses.

In this article, we’ll explore the rise of synthetic identity theft, and how it works, the industries most affected, and the best ways to protect yourself.

What is Synthetic Identity Theft?

Synthetic identity theft is a form of financial fraud in which criminals combine real and fake personal information to create a new identity. This identity is then used to open bank accounts, apply for loans, and make fraudulent transactions. Unlike traditional identity theft, where a person’s entire identity is stolen, synthetic identity theft blends false and real data to bypass fraud detection systems.

How Synthetic Identities Are Created

Fraudsters typically use:

  • Stolen Social Security Numbers (SSNs) – Often from children, seniors, or inactive accounts
  • Fake names and addresses – Designed to make the identity seem legitimate
  • Manipulated credit profiles – Created by piggybacking on real accounts or through credit-building scams
  • AI-generated personal details – Making the identity more difficult to detect

Why is Synthetic Identity Theft on the Rise?

There are several reasons why synthetic identity theft is increasing at an alarming rate this year:

  1. Data Breaches Have Exposed Millions of Personal Records
    • Major data breaches in recent years have provided cybercriminals with a treasure trove of personal information, including SSNs, birth dates, and financial records.
  2. Advancements in AI and Deepfake Technology
    • Fraudsters now use AI-driven tools to generate realistic fake identities that can pass identity verification checks.
  3. Lack of Regulatory Oversight on Digital Identities
    • Many financial institutions and businesses have not yet implemented stringent identity verification measures, leaving gaps for criminals to exploit.
  4. The Increasing Use of Digital Banking and Online Transactions
    • As consumers and businesses move more financial activities online, fraudsters find more opportunities to exploit security weaknesses.

Industries Most Affected by Synthetic Identity Theft

Certain industries are particularly vulnerable to this type of fraud:

1. Financial Services

  • Banks and credit card issuers are top targets since synthetic identities can be used to take out fraudulent loans and credit lines.

2. Healthcare

  • Medical fraud using synthetic identities allows criminals to receive medical care or prescription drugs under fake credentials.

3. Government Benefits Programs

  • Fraudsters use synthetic identities to file for unemployment benefits, tax refunds, and social security claims.

4. E-Commerce and Retail

  • Online merchants often struggle with fraud detection, allowing criminals to make high-ticket purchases using fake accounts.

How to Protect Yourself from Synthetic Identity Theft

Because synthetic identity theft is difficult to detect, it’s crucial to take proactive steps to safeguard your personal and business information.

1. Monitor Your Credit Reports Regularly

  • Check your credit reports from all three major credit bureaus (Experian, Equifax, TransUnion) for unfamiliar accounts or inquiries.

2. Freeze Your Credit When Not in Use

  • A credit freeze prevents fraudsters from opening new accounts in your name without authorization.

3. Be Cautious with Personal Information

  • Never share sensitive data like SSNs, banking details, or addresses with unverified sources.

4. Use Multi-Factor Authentication (MFA) for Online Accounts

  • MFA adds an extra layer of security, making it harder for hackers to access your accounts.

5. Sign Up for Identity Protection Services

  • A trusted identity protection service like TechG2’s Identity Protection can monitor your personal data, detect fraudulent activity, and offer recovery support.

What to Do If You Suspect Synthetic Identity Theft

If you believe you’ve been a victim of synthetic identity fraud, act immediately:

  1. Report suspicious activity to your bank or credit card company.
  2. File a fraud alert with the major credit bureaus.
  3. Report identity theft to the Federal Trade Commission (FTC) at IdentityTheft.gov.
  4. Monitor all financial accounts for unauthorized transactions.
  5. Contact a professional identity protection service for additional support.

Conclusion

Synthetic identity theft is one of the most sophisticated financial crimes, making it more important than ever to stay vigilant. By understanding how it works and taking preventive measures, you can reduce your risk of becoming a victim.

At TechG2, we specialize in identity protection services designed to keep your personal and financial information secure. Don’t wait until it’s too late—get started today and safeguard your digital identity.

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