What is synthetic identification fraud?

Mar 8th, 2018 | By FCT

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!

 

Categories: Fraud

4 Responses to “What is synthetic identification fraud?”

  1. Luke Parker says:

    So how can they use someone else’s SIN. Even if the SIN has no credit history attached wouldn’t the acuall owners name be attached to the card so the fraudster would be flagged ?

    • FCT says:

      Hi Luke, synthetic fraud often involves the use of inactive social insurance numbers, usually belonging to young children or deceased individuals where credit has not been issued and accordingly will raise no alarm bells or flags. They start with a real SIN and combine it with fake information or a combination of different people’s data to create new totally fictitious identifies. They then apply for credit. Even if the credit is denied, which it most likely will be, the credit bureaus now have record of the application and create a file. They then slowly build a credit profile and typically they will target credit lending institutes that offer small credit lines to applicants with no credit history in order to get started. Hope this helps!

  2. Jennie says:

    Can someone get a credit card with someone else’s active sim number and a fake name?? If so does that affect the person who owns that sin number even though it isn’t there name

    • FCT says:

      Hi Jennie,
      Typically if someone applied for credit using a real social insurance number and a fake name, it would be caught as the bureau would not match the applicant. In situations of synthetic identity-fraud however, the fraudster uses a real social insurance number and slowly over time manipulates the particulars creating a whole new identity, so it can happen.

      Any fraudulent activity using your name can affect your credit rating so it is important that if you are a victim of fraud that you immediately report it to the credit reporting agencies.

      Regards,
      FCT

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