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What is synthetic identification fraud?


You may be wondering, what is a synthetic identity?

A synthetic identity is when a fraudster uses real and fake identification (ID) to create an entirely new identity. Virtually untraceable, this type of fraud is costing Canadians over $1B a year.

So how do they do it?

Unlike traditional forms of identity theft involving stolen IDs, synthetic identification fraud is often accomplished by using a legitimate clean social insurance number (often assigned to the elderly or children) with no credit attached to it. From this number, fraudsters start to build out an ID; subtle changes in the social insurance number, changing the birthdate, attaching different fictitious names and addresses to it. They apply for credit with small limits or cell phones, and for a while they are diligent with paying back the credit in order to obtain a good credit rating. They then apply for more credit, mortgages, lines of credit, etc. and then disappear. Since the person does not exist, it is extremely difficult to trace the source.

How can you tell if you are a victim of synthetic identification fraud? 

Be wary of credit card applications that are sent to your children or mail sent to your home with a different name. Check with your credit monitoring agencies for subtle changes to your profile and perhaps enrol in credit monitoring.

If you are a lawyer acting on real estate transactions, the usual flags apply–quick closing, private agreement of purchase and sale, you have never acted for your client or you just have a bad feeling. Trust your instincts!

Do you have any questions about synthetic identification fraud? Ask us in the comments!

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