Search This Blog

Powered by Blogger.

Blog Archive

Labels

About Me

Showing posts with label Frankenstein fraud. Show all posts

Frankenstein Scam: Here's How to Safeguard Yourself Against Synthetic Identity Fraud

 

Identity theft is not always as straightforward as acquiring one person's information; stolen identities can be put together from several sources. This rising crime, known as synthetic identity fraud or "Frankenstein fraud," involves combining someone's Social Security number with information from other people to establish a new, fake identity.

To safeguard yourself from this and other types of identity theft, look into the finest identity theft protection services. Criminals frequently target the most vulnerable people, including children, the homeless, and the elderly. The offender can then use his new name to borrow money. If a fraudster succeeds, the real owner of the SSN may be held liable.

Modus operandi

Synthetic identity fraud requires patience on the part of the criminal, especially if they use a child's Social Security number. The identity is created by combining a valid Social Security number with an unrelated name, address, date of birth, phone number, or other piece of identifying information to make a new "whole" identity. Criminals can buy Social Security numbers on the dark web, acquire them from data breaches, or defraud people using phishing attacks and other frauds. 

Synthetic identity theft thrives because of a basic vulnerability in the American financial and credit systems. When a criminal creates a synthetic identity to request for a loan, the lender often denies credit because there is no record of that identity in their system. The thieves anticipate this because youngsters and teenagers may have little credit or a limited history, and the elderly may have poor credit scores. 

When an identity applies for an account and is reported to a credit bureau, it is shared with other credit agencies. That conduct is sufficient to allow credit bureaus to identify the synthetic identity as a real person, even if there is minimal activity or evidence to corroborate its authenticity. Once the identity has been established, the fraudsters can begin borrowing credit from lenders.

Prevention tips

Synthetic identity fraud may seem frightening, but there are actions you can take to limit how thieves can utilise your identifying data. 

Freeze your credit report: No one can open new credit lines in your name since a credit freeze stops creditors from viewing your credit reports. Unless your credit is first unfrozen with each of the major credit agencies, this also applies to you. 

Although the procedure for freezing a child's credit is a little more complicated, freezing their credit is also one of the greatest ways to cut off the source of synthetic identity fraud, which mostly depends on obtaining the Social Security numbers of children and the elderly. In a similar vein, you may help stop someone from using your Social Security number without your knowledge by freezing it.

Check credit reports regularly: If you do not freeze your credit reports, make sure to check them on a regular basis for any questionable activity. Be especially aware of any other names, residences, or employers associated with your credit file. You can also join up for free credit monitoring, such as Capital One's CreditWise, which searches the dark web for your personally identifiable information. 

Additionally, you can utilise an identity theft protection service to automate reviewing your credit reports or to alert you if your information is compromised in a breach. AnnualCreditReport.com also offers a free weekly credit report.

Synthetic Identity Fraud: A Growing Concern for Vulnerable Individuals

 

Criminals creating identities by piecing together stolen data sounds like a plot from a horror film. Unfortunately, "Frankenstein fraud," a form of synthetic identity theft, is an alarming reality. This crime involves using a Social Security number (SSN) and merging it with other stolen or fabricated details like names, addresses, or birth dates to form a new identity.

Synthetic identity theft, often termed Frankenstein fraud, involves crafting entirely new identities by blending real and fictitious information. 

According to fraud expert Frank McKenna, this practice affects up to 15 million consumers in the U.S., many of whom remain unaware. Vulnerable groups, such as children, the elderly, and the homeless, are prime targets due to their limited credit activity.

This crime costs billions annually — FiVerity reports $20 billion in losses in 2020 alone. Criminals meticulously construct fake identities using stolen SSNs, often purchased on the dark web, obtained through data breaches, or extracted via phishing scams. These fabricated profiles initially face credit denials but eventually become recognized by credit bureaus. Over time, fraudsters build creditworthiness using these false identities, only to abandon them after maxing out loans and credit lines.

The aftermath of this crime can be devastating. Victims — often unaware of the fraud — may face financial liabilities and damaged credit. Fraudsters’ actions leave lenders and real SSN owners to bear the consequences.

Protect Yourself Against Synthetic Identity Fraud

1. Freeze Credit Reports
Implementing a credit freeze with major bureaus prevents unauthorized access to your reports, safeguarding against new credit accounts. Consider freezing children’s and elderly relatives' credit as well.

2. Monitor Credit Regularly
Use tools like Capital One's CreditWise or AnnualCreditReport.com to detect suspicious activity or data breaches.

3. Avoid Phishing Scams
Stay vigilant against fraudulent messages from entities claiming to represent banks or government agencies. Verify the source directly.

4. Secure SSN Documents
Shred unnecessary documents containing your SSN, and secure digital copies.

4. Check Social Security Statements
Regularly review Social Security statements to detect unauthorized use of your SSN.

Moreover, synthetic identity fraud is a complex and evolving threat, but staying informed and taking proactive steps can significantly reduce your risk. By safeguarding your information and monitoring your credit, you can help protect yourself and your loved ones from becoming victims of this alarming crime.