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.