What Is Synthetic Identity Fraud? How To Protect Yourself

February 14, 2024


 Minute Read

In this article:

    Shield Icon

    Identity theft and fraud protection for your finances, personal info, and devices.

    Get Identity Guard

    Did Someone Create a “Synthetic Identity” With Your Info?

    In June 2021, Hasan Hakim Brown took the stand in Fort Lauderdale federal district court. The 45-year-old Floridian led a synthetic identity fraud ring that used hundreds of stolen Social Security numbers (SSNs) to create fake identity profiles.

    When COVID-19 spread, Brown’s gang stole over $24 million in relief funds, leaving their victims and the U.S. government to untangle a web of fake personas and shell companies [*]. 

    The U.S. Federal Reserve recently claimed that synthetic identity fraud is the country's fastest-growing type of financial crime [*].

    More recently, Socure projected that this "Frankenstein fraud" will cost businesses $5 billion in credit losses by 2024 [*]. 

    Synthetic identity fraud is only growing. But what does it mean for you? 

    In this guide, we’ll explain how this type of fraud unfolds — and how you and your family can stay safe.

    What Are Synthetic Identities? How Do Scammers Create Them?

    Synthetic identity fraud occurs when criminals create false identity documents and accounts by using a combination of made-up details and stolen personal information from real people. 

    Creating a synthetic identity is a long-term con. Fraudsters start small and often repay loans and credit card bills to help their new synthetic identities build reputable credit profiles. Once qualifying for larger credit limits, the scammers “bust out” — draining the accounts and vanishing.

    If criminals use your personally identifiable information (PII) to create a synthetic identity, they can apply for credit cards, get government benefits, or take out loans — all under your name or SSN. 

    Here are a few of the ways that criminals create synthetic identities: 

    • Identity compilation: Fraudsters gather elements of personal information from multiple people to create a new identity. For example, after a hack or data breach, an identity thief could combine a child's stolen SSN with an adult's name and date of birth.
    • Identity manipulation: Fraudsters modify real elements of personal information to create a new identity. For example, someone could steal your driver’s license information but change the date of birth and home address.
    • Identity fabrication: Fraudsters create an entirely fictitious identity without using any genuine PII. A commonly used persona is Michael Smith — a man in his 30s from Houston, Texas.

    Many synthetic identities fail identity verification checks at banks and lenders. But cybercriminals are getting better at avoiding fraud detection.

    With artificial intelligence (AI), fraudsters can create lifelike photos, or clone the voices of their victims. These sophisticated tools can fool authorities running biometric checks and trick victims into believing they're talking with a loved one.

    ⚡️Get award-winning protection against SSN theft: Identity Guard can alert you in near real-time if your SSN and other personal information has been leaked or is being used by scammers. Save up to 33% on Identity Guard and secure your identity and finances from fraudsters today.

    What’s the difference between synthetic identity fraud and identity fraud?

    Perpetrators of synthetic identity fraud and traditional identity fraud both seek financial gain. However, these types of fraud differ slightly in their execution.

    Traditional identity fraud focuses on the theft and misuse of a real person's identity. For example, a scammer may steal your credit card details in a phishing scam and then make fraudulent purchases.

    Synthetic identity fraud involves the creation of entirely new identities. For example, a hacker may steal and sell your SSN card and email account details on the Dark Web. After that, identity thieves can modify the details, apply for loans, or get medical care in another state. Even though it's an ID that contains fake information, the fraudulent purchases will be linked to your SSN. 

    How Dangerous Is a Synthetic Identity That Uses Your Data?

    Synthetic identity fraud is mostly a concern for banks and lenders — as scammers use manufactured identities to take out loans and steal money. However, if your personal information becomes part of a synthetic identity, it can have serious real-world consequences.

    Here are seven risks of synthetic identity fraud: 

    1. Loans taken out in your name. If scammers use your SSN as part of a synthetic identity, any loan applications or new credit accounts may appear on your file. These bogus accounts and lines of credit create a fragmented credit history, which can take a long time to remedy.
    2. A sudden drop in credit score. A synthetic identity’s unauthorized activities linked to your credit file can negatively impact your standing with the three major credit bureaus — Equifax, Experian, and TransUnion. With a lower credit score, you may have problems when you need a loan or mortgage.
    3. Lost tax returns. Fraudsters can use stolen personal information to file tax returns in your name before you do. As the thieves disappear with your funds, you could find yourself in trouble with the Internal Revenue Service (IRS).
    4. Lost medical benefits. Over 254,000 Medicare beneficiaries are now at risk following a data breach last year [*]. If the stolen details fall into the wrong hands, criminals can use synthetic identities to access medical care, equipment, and drugs. 
    5. Unemployment fraud. Fraudsters can use synthetic identities to claim unemployment benefits in your name. In 2020, Adam Arena led a group that defrauded the federal government out of almost $1 million from the Paycheck Protection Program [*]. 
    6. Potential legal action. If fraudulent activities are linked to your identity, you may become embroiled in legal disputes. Zina Wilson went on a vigilante mission to clear her niece’s name after the younger woman received a string of warning letters from bilked debt collectors and real estate agents [*].
    7. Vulnerability to other types of identity theft. Synthetic identity fraud can make you more susceptible to other forms of identity theft. Nearly 50% of identity theft victims are repeat victims [*]. 

    📚 Related: How To Protect Yourself From Identity Theft in 2024

    How To Protect Yourself From Synthetic Identity Fraud

    1. Monitor your SSN for signs of fraud
    2. Use strong passwords and 2FA
    3. Sign up for a credit monitoring provider
    4. Check your Social Security statement
    5. Lock or freeze your credit reports
    6. Scan the Dark Web for leaked personal information 
    7. Review your financial accounts regularly
    8. Use digital security tools to protect against hacking
    9. Don’t click on suspicious links or answer unknown calls
    10. Shred sensitive documents and mail

    As this crime is hard for authorities to detect, victims can face financial hardship for months or years. The best way to combat synthetic identity fraud is to take pre-emptive measures to stop scammers from exploiting you.

    Here are 10 ways to help protect yourself and your family from synthetic identity theft: 

    1. Monitor your SSN for signs of fraud

    Synthetic identity fraud is dangerous because scammers only need your SSN to target you. 

    Children are especially vulnerable, and most victims of child identity theft don't realize they have been targeted until they reach adulthood. With SSN monitoring, you can stop scammers from destroying your credit score and also protect your children’s futures.

    Here’s what to do:

    • Use an SSN monitoring service. Identity Guard is an award-winning identity theft protection solution that monitors your most sensitive information — including your SSN. When you sign up for Identity Guard, you'll get notified if your SSN has been leaked on the Dark Web or compromised in a data breach — giving you a chance to shut down scammers before it’s too late. 
    • Sign up for the Social Security Administration’s (SSA) myE-Verify program. E-Verify is an online system that allows employers to confirm the eligibility of employees to work in the United States. By signing up for E-Verify, you can stop scammers from claiming unemployment benefits or income in your name.

    📚 Related: What To Do If a Scammer Has Your Social Security Number

    2. Protect your online accounts with strong passwords and 2FA

    Nearly one-third of internet users have had their accounts or information compromised by weak passwords [*]. As the first line of defense on your online accounts, it is critical to create passwords that people can't easily guess or crack. 

    Here’s what to do:

    • Create unique passwords for every account. Avoid obvious patterns, and opt for a complex mix of uppercase and lowercase letters, numbers, and special characters.
    • Set up two-factor authentication (2FA). By adding a fingerprint scan or authenticator app to the login process, you make it harder for hackers to take over your accounts. 
    • Use a password manager. It’s easier to create and store long, complex login credentials with a password manager.

    3. Sign up for a credit monitoring provider

    Your credit score determines your ability to borrow from lenders. When you use a credit monitoring service, you can keep tabs on your credit reports and react quickly to any potential fraudulent fraud.

    Here’s what to do:

    • Look for a three-bureau credit monitoring provider. It’s important to review your credit file at each of the three reporting agencies. With three-bureau monitoring, you’ll have 24/7 coverage.
    • Enable real-time alerts. If your information is at risk, acting fast can save you from huge losses. Set up alerts to get instant notifications about any credit inquiries, new applications, or changes to your accounts. 

    🛡 Don’t settle for second-best fraud protection. Identity Guard offers award-winning credit, bank, and identity monitoring — plus a $1 million identity theft insurance policy for every adult member on your plan. Get 33% off Identity Guard when you sign up today. 

    4. Check your Social Security Statement throughout the year

    If your details are compromised by synthetic identity fraud, a scammer could get a job or claim unemployment benefits in your name. Any income will appear on your Social Security Statement. You can limit the damage by staying proactive.

    Here’s what to do:

    • Order your Social Security Statement. You can print, complete, and send Form SSA-7004 to file a Request For Social Security Statement. The SSA will send your information by mail within 4-6 weeks. If you want to access the statement quickly, create an account at www.ssa.gov/myaccount to view your statement online.
    • Review the statement for inaccurate details. Carefully examine the information to ensure that the reported earnings, benefits, and taxes align with your expectations. 
    • Contact the SSA to query issues or report potential fraud. If you spot any inaccuracies or suspicious activity, contact the Social Security Administration (SSA) at 1-800-772-1213.

    5. Lock or freeze your credit reports with all three bureaus

    A credit freeze is a temporary block on your credit file that stops anyone from accessing your reports or opening new bank accounts. If you’re a victim of identity theft or have concerns that someone has compromised your personal details, placing a freeze will protect you from any fraud or financial loss. 

    A credit freeze is a free service and won’t impact your credit score. To freeze your credit, you’ll need to contact each of the three major credit bureaus, prove your identity, and request a freeze. 

    Here’s how to request a credit freeze at each bureau: 

    Experian Security Freeze — P.O. Box 9554, Allen, TX 75013
    Equifax Information Services LLC — P.O. Box 105788, Atlanta, GA 30348-5788
    TransUnion LLC – P.O. Box 2000, Chester, PA 19016

    6. Scan the Dark Web for your leaked personal information 

    Hackers and identity thieves trade stolen SSNs on illicit online marketplaces for as little as $2 [*]. While you can’t remove your information from the Dark Web, staying alert to threats helps you keep ahead of scammers.

    You can check your personal data exposure with Dark Web monitoring tools. This scanner also checks to see if your information was used in scams such as account hijacking or to make spam calls.

    Screenshot of Identity Guard's Dark Web scanner interface with an email address field next to a button called Scan
    Check if your personal information was compromised in a data breach. Source: Identity Guard Dark Web scanner.

    7. Review your financial accounts regularly

    You can maintain healthy finances and a good credit score when you get into the habit of reviewing your accounts on a regular basis. While time-consuming, it may help you catch the early signs of identity theft.

    Here’s what to do:

    • Order free copies of your credit reports. Until the end of 2023, you can get one free copy of your credit report every week from each bureau by visiting AnnualCreditReport.com.
    • Review your financial documents. Look over your credit reports, bank statements, and credit card statements. Follow up on any unrecognized transactions or discrepancies that you see in the accounts or balances.
    • Report issues. You can dispute fraudulent credit card charges or hard inquiries in your file. The sooner you report the problems to the relevant bureaus and vendors, the better.

    📚 Related: Is Discover Identity Theft Protection Worth It?

    8. Use digital security tools to protect yourself against hacking

    Your personal information could be at risk every time you go online. A hacker could intercept your details if you’re not on a secure network and don’t follow best practices to protect your privacy.

    Here’s what to do:

    • Use a virtual private network (VPN). An encrypted network keeps your IP address, location, activity, and data safe from hackers, advertisers, and government agencies.
    • Install reliable antivirus software. With protection against malware, spyware, and ransomware, you can run scans and receive alerts about any threats or risky websites. 
    • Set up parental controls to improve privacy. Children may unwittingly share personal information on social media or on gaming platforms. With parental controls, you can limit access to certain apps, sites, and chat features. 

    9. Don’t click on suspicious links or answer strange calls

    Phishing emails may be among the oldest types of fraud, but they are not going anywhere. Entersekt CTO Gerhard Oosthuizen warns, "People are already using ChatGPT and generative AI to write phishing emails, to create fake personas and synthetic IDs." [*]

    Here’s what to do:

    • Be wary of unsolicited emails or text messages that use pressure tactics. No reputable bank, business, or government agency will contact you out of the blue with an urgent request to transfer money or make changes to your account. 
    • Avoid clicking on links or downloading attachments. If you receive emails or SMS texts, don’t click on anything. It’s safer to go to the company’s official website and find the customer support phone number.
    • Read about the latest types of fraud. The more you know about fraudsters' methods, the less likely you will become a victim. 

    📚 Related: The 11 Latest Phishing Types You Need To Be Aware Of

    10. Shred sensitive documents and mail

    If you leave important personal information or financial details lying around, someone else may steal it and exploit your identity. For example, Elisabetta Agyeiwaa doesn't officially exist because her mother registered another child 30 years ago with Elisabetta's birth certificate. The Italian-Ghanaian filmmaker cannot vote, marry, or get a mortgage [*]. 

    Here’s what to do:

    • Opt for electronic communications whenever possible. You can minimize the risks by going paperless. Ask all lenders and government bodies to only contact you electronically. 
    • Shred sensitive documents that you no longer need. Avoid throwing sensitive documents in the trash — such as statements, letters from your bank, or medical records — as dumpster divers may find them. 
    • Protect vital physical documents. It’s wise to keep sensitive documents like your passport and SSN card in a locked safe with a combination.

    Are You the Victim of Synthetic Identity Fraud? Do This

    If you believe you might be a victim of synthetic identity theft, here are eight steps to help you recover:

    Check your insurance coverage

    If you have identity theft insurance, your provider can walk you through the recovery steps and facilitate three-way calls with banks and impacted companies. If you don’t have dedicated ID theft insurance, check if you have coverage with your home insurance or employer.

    📚 Related: The 6 Best Home Title Protection Services of 2024

    Check your SSN statement for unfamiliar activity

    Visit the SSA’s Statement request page and sign in to my Social Security account to review your statement. 

    Look over your credit reports for signs of fraud

    Take note of any suspicious activity — like new accounts, unrecognized purchases, or changes to your profile. 

    Notify your bank or card issuer 

    Speak to each of your financial institution’s fraud departments to let them know you could be at risk of synthetic identity fraud. They can freeze or cancel your cards and place fraud alerts on your accounts. 

    Here's how to contact most major credit card companies in the United States:

    • Visa: 1-800-847-2911
    • Mastercard: 1-800-627-8372 (1-800-MASTERCARD)
    • American Express: 1-800-528-4800
    • Bank of America: 1-800-732-9194
    • Capital One: 1-800-227-4825 (1-800-CAPITAL)
    • Chase: 1-800-432-3117
    • Citibank: 1-800-950-5114
    • Discover: 1-800-347-2683 (1-800-DISCOVER)

    📚 Related: How To Spot a Citibank Phishing Email (With Examples)

    File an identity theft affidavit with the Federal Trade Commission (FTC) 

    If you become a victim of synthetic identity fraud, the FTC will help you recover. Visit IdentityTheft.gov to submit your report and get a personalized recovery plan.

    Secure your identity 

    After a fraudster targets you, it's crucial to make changes to improve your digital security. Create new passwords, place credit freezes, and set up credit monitoring to automatically alert you of any suspicious activity or new credit accounts opened in your name.

    Request information from debt collectors 

    The Fair Credit Reporting Act (FCRA) gives you the right to request all information related to debts in your name. Write to debt collection agencies to officially request that they mail you all information and cease further contact with you while authorities investigate.

    Dispute transactions with vendors

    Call the fraud department of any company at which fraudsters used your details to make purchases or obtain credit. Explain that you are a victim of fraud, and request that they reverse all charges. You can share your FTC affidavit and police report to support your claims. 

    📚 Related: How To Repair Your Credit After Identity Theft

    What’s the Government Doing About Synthetic Identity Fraud?

    In response to the rise of synthetic identity fraud, the Social Security Administration (SSA) developed the electronic Consent Based Social Security Number Verification (eCBSV) service.

    This identity verification system helps detect bogus ID documents and profiles that scammers create with stolen SSNs.

    Here’s how the eCBSV system works:

    • Permitted entities can check an individual’s SSN, name, and date of birth combination against Social Security records. 
    • The eCBSV returns a simple verification check of “Yes” or “No.” 
    • If SSA records show the legitimate SSN holder is deceased, the eCBSV service returns a death indicator — and doesn’t verify the individual’s identity.

    Also, as an added prevention method, the SSA needs the number holder’s written consent before eCBSV can disclose the SSN verification. 

    Don’t Let Scammers Use Your SSN for a Synthetic Identity

    According to the FTC, nearly 85% of all identity theft cases are actually synthetic identity fraud [*].  

    This threat will continue to grow as criminals use AI tools to dupe victims, banks, and government agencies. Just as modern identity verification systems rely on machine learning to identify anomalies in data points, sophisticated scammers can use technology to exploit flaws in fraud prevention systems. 

    Signing up for Identity Guard is the best way to keep your personal information and devices safe from sophisticated scams in 2024. 

    Identity Guard’s award-winning identity theft protection suite includes SSN and Dark Web monitoring along with advanced digital security tools. If you fall victim to synthetic identity fraud, Identity Guard covers you with a $1 million insurance policy and expert support from U.S.-based Fraud Resolution Specialists. 

    Shut down synthetic identity fraud. Save 33% when you sign up for Identity Guard today.

    Related Articles

    A zoomed-in image of a keyboard with a blue backlight and a key called "Darknet" instead of an Enter key

    Was Your SSN Found on the Dark Web? Do This

    If your SSN was found on the Dark Web, scammers could use it to steal your identity, money, and more. Here’s what to do if your SSN has been compromised.

    Read More

    August 10, 2023

    Was Your SSN Found on the Dark Web? Do This
    A person wearing a green sweater, in a well-lit room as if on a bright day, and using their laptop while sipping coffee

    How To Protect Yourself From Identity Theft in 2024

    No one can prevent all types of identity theft. But by following these 17 identity theft prevention tips, you’ll be a much harder target for scammers.

    Read More

    February 14, 2024

    How To Protect Yourself From Identity Theft in 2024

    Get Started with Identity Guard

    Get started with Identity Guard today, risk-free.

    Get Protected Today
    1. Financial identity theft and fraud
    2. Medical identity theft
    3. Child identity theft
    4. Elder fraud and estate identity theft
    5. “Friendly” or familial identity theft
    6. Employment identity theft
    7. Criminal identity theft
    8. Tax identity theft
    9. Unemployment and government benefits identity theft
    10. Synthetic identity theft
    11. Identity cloning
    12. Account takeovers (social media, email, etc.)
    13. Social Security number identity theft
    14. Biometric ID theft
    15. Crypto account takeovers