How does synthetic identity theft work?
Synthetic identity theft isn’t just a plot in a sci-fi movie; it’s a real-world menace. It’s a crafty blend of real and fake information to create a new identity. Imagine a thief using your Social Insurance Number combined with a fabricated name and address. It’s like a financial Frankenstein’s monster, roaming the digital world ready to wreak havoc on your credit and peace of mind.
Here’s how it typically works:
- Gathering Real Data: Synthetic identity theft typically begins with gathering pieces of personal information, such as Social Insurance Numbers, often acquired through data breaches or phishing scams.
- Fabricating Details: This real data is then blended with false information such as false names, addresses, or DOB to establish a ‘new’ individual.
- Establishing Credibility: The synthetic identity is then used to apply for a new credit card or loan. That application will be rejected but creates an official credit profile for the synthetic identity. That profile is then added as an authorized user to a stolen credit account to build a credit history and score.
- Exploiting the System: Once established, these identities can then be used to secure new loans, credit cards, and other financial products.
How to protect yourself against synthetic identity theft
As with any type of identity theft, prevention is key. Here are some tips to help you protect yourself from synthetic identity theft:
- Regularly check your credit report: Monitoring your credit report can help you identify any suspicious activity or accounts that you did not open.
- Safeguard your personal information: Be careful about sharing your Social Insurance Number and other sensitive personal information. Only provide it when necessary and be wary of phishing scams asking for this data.
- Monitor your financial statements: Keep a close eye on all your bank and credit card statements for any unauthorized transactions.
- Use strong passwords: Ensure that all your online accounts have strong and unique passwords to prevent hackers from accessing them.
- Be cautious of unsolicited calls and emails: Never give out personal information over the phone or email unless you initiated the communication and are sure you know who you are dealing with.
Synthetic identity theft is a concern that requires vigilance and proactive measures to protect your financial well-being. But by staying informed and adopting robust security practices, you can significantly reduce your risk of falling victim to this sophisticated fraud.
