How Does Synthetic Identity Theft Work?

Little information is available to assist you in correctly detecting a case of identity theft before it happens. Merchants can identify one after the fact. Once the dust has cleared and the thief has abandoned the account in issue, the only thing left is figuring out which method they used.

  • Manipulated Synthetic Identities: Identities based on real persons are less likely to raise suspicion, which is why this synthetic fraud is so common. To do this, fraudsters will make small changes to an SSN to hide a previous credit history and obtain credit.
  • Manufactured Synthetic Identities: They are sometimes called ‘Frankenstein’ identities since they comprise personally identifiable information (PII) gathered from various sources. For example, fraudsters might create a phony identity with verifiable data points using one person’s SSN, another’s address, and a third’s account information.

What is Synthetic Identity Theft?

Synthetic identity theft, also known as synthetic identity fraud, is a rapidly growing fraud that occurs when hackers use stolen data and hide a previous history to create new identities rather than stealing and using existing accounts. They can use these fake identities to create fraud attacks.

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What is Synthetic Identity Theft?

Synthetic identity theft, a type of fraud scheme that uses fabricated identities, is growing rapidly, with banks and digital merchants particularly vulnerable. If you don’t notice synthetic identity accounts early on, they can be difficult to detect because they show all of the characteristics of an ideal client. Other third-party fraud attack methods, such as account takeover or clean fraud, rely on existing identities. The fraudster gains access to a cardholder’s account or personal information and then makes as many transactions as possible within the short time frame before being discovered....

How Does Synthetic Identity Theft Work?

Little information is available to assist you in correctly detecting a case of identity theft before it happens. Merchants can identify one after the fact. Once the dust has cleared and the thief has abandoned the account in issue, the only thing left is figuring out which method they used....

How Does Synthetic Identity Theft Impact Merchants?

Unlike other kinds of fraud, synthetic identity theft seldom involves an identifiable customer victim. Since fraudsters are receiving card statements, no one will detect anything unusual. Real cardholders with stolen SSNs are unlikely to be aware that their information has been stolen until it appears on their credit report, which could take years....

How Can You Recognize Synthetic Identity Theft?

Social Security Statements: Social Security Statements show when payments are made to the Social Security fund as part of withholding taxes. If a business or user finds anomalies in Social Security payments, it’s possible that a fraudster exploited fraudulent credentials to get work....

What is a Synthetic Identity Used for?

Synthetic identity is mostly used to commit financial fraud. Synthetic identity theft creates an identity from several bits of information, but no real person exists. This becomes quite more difficult to detect....

What Happens if you’re the Victim of Synthetic Identity Theft?

The detection of synthetic identity theft is one of the most difficult problems. Most lenders and banks struggle to detect suspicious accounts since the identities created by fraudsters can look legitimate. Thieves also target customers who don’t use their credit cards often, making early detection of the problem less likely....

How to Help Protect Against Synthetic Identity Fraud?

Use digital security software: Do not leave your personal information and passwords vulnerable to hackers and viruses. Consider a full suite of digital security software to provide optimal protection. Review your credit reports: Check your credit reports and scores regularly so that you can prevent sharing unusual information. Secure your SSN: To avoid synthetic identity theft, you need to protect your personally identifying information, particularly your Social Security number....

Defend Against Synthetic Identity Theft

Authenticate Buyers Based on Risk: Merchants should use AVS (Address Verification Services), CVVs, geolocation services, and other fraud protection methods to separate low-risk transactions from high-risk ones. Using this program, businesses can categorize transactions more effectively depending on risk. This also allows them to remove friction points with existing clients....

Conclusion

In this article, we have learned about synthetic identity theft. Synthetic identity theft is a group scheme that uses a completely fake identity is on the rise and hitting financial institutions especially hard....

Frequently Asked Questions on Synthetic Identity Theft – FAQs

Who is most affected by synthetic identity theft?...