Synthetic Fraud is a sophisticated form of identity theft where fraudsters create new identities by combining real and fabricated personal information. Unlike traditional identity theft, synthetic fraud creates entirely new identities that don't correspond to real individuals.
Key Components
- Combination of real and fake data
- Social Security number manipulation
- Credit profile building
- Legitimate-appearing documentation
- Multiple identity variations
Common Methods
- Mixing real and fake information
- Credit piggybacking
- Identity cultivation over time
- Multiple account creation
- Gradual credit building
Detection Signs
- Inconsistent personal information
- Multiple applications with similar data
- Unusual credit behavior
- Missing or invalid history
- Pattern anomalies
Prevention Measures
- Advanced identity verification
- Pattern recognition systems
- Document validation
- Credit history analysis
- Behavioral monitoring
Impact
- Financial losses for institutions
- Credit system integrity damage
- Increased security costs
- Higher consumer prices
- Regulatory challenges
Synthetic fraud is particularly challenging to detect because the created identities often appear legitimate and can maintain good credit standings before committing fraud.