We know that as technology enhances and evolves, there are so many different opportunities for people. However, the growing opportunities for businesses and jobs are also allowing people to pull different and serious scams on people. With advanced technology, the ways people try to scam other people are also becoming more sophisticated.

Among the different types of scams, synthetic identity fraud is becoming more and more popular. This is a highly advanced type of scamming that people are not able to understand and fall for quickly. Hence, it would help if you read this article to ensure that you can protect yourself from this scam and not fall for synthetic ID fraud.

What is Synthetic ID Fraud?

This is one of the biggest and the most growing types of fraud that is happening all over the world. Because of synthetic ID fraud, people have lost thousands and millions of dollars. It is seen that about 80% of the new accounts that are being created can come under the influence of these frauds.

You might be wondering what this synthetic ID fraud is. This is the type of fraud in which the Social Security numbers are stolen. Other than that, the name of the person, date of birth, mailing address, and even the phone and email address are stolen, and all of this is then used to steal the money.

One of the reasons why people are scared of this type of fraud is because it is tough to detect them through monitoring systems. This is why this kind of fraud is so feared, and people try their best to keep their personal information protected at all times.

In most cases, the targeted population of such scammers are children, elderly people, and even homeless people. This is because these people are lily to look into their credit history, and it makes it easier for them to attack their accounts.

How is the Synthetic Identity Created?

There are a lot of different ways through which people pull off this entire theft system. One of the most common ways is that the criminal will either set the Social Security Number of the person themselves or sometimes they can purchase fake Social Security numbers from other people and the dark web. They then combine both numbers and create new identity information that will cause identity complications.

Another way through which people are able to pull off this entire fraud is by identity manipulation. Here, the fraudster will steal the information of the targeted person, such as the name, birth date, email address, phone number, and all the other important information. Then, they manipulate this information slightly and make a new identity out of it. Then, they use this information to steal the money.

The last method through which the fraudsters are able to pull off this entire fraud is by doing identity fabrication. This means that they will be creating a totally new and false identity by using the random personal information of people and then using it to perform illegal activities.

How Does Synthetic Identity Fraud Work?

Now, you need to know how this system works and how these fraudsters are able to track people and cause millions of dollars of damage to people's accounts. Following are the main steps that they follow in order to pull off this entire fraud and make another person penniless.

Creates an Identity:

The first step that they do is to create an identity. This is done by collecting information through different means and then combining them to make fake information. Here, they mentioned everything, such as the email address, phone number, account number, Social Security numbers, and so many other things. Once they have created the information and the identity, they will proceed to the next step.

They Apply for Credit:

When they are done creating the information, they apply for the credit online. The institute where they have applied will give them a query to submit. However, this has been canceled, and their application has not been accepted. However, the application that they have submitted will be enough through which they can start the credit file.

Continue to Apply for Various Credit:

Then, they start applying to a lot of different financial institutes. This process can take some time. However, they will get the approval. In most cases, the high-risk lenders are the people who will approve this type of application.

Once the application is approved, they will start building the credit score. This means they will make timely payments and gain people's trust that they are real people. This will even allow them to gain the trust of the low-risk lender.

They build a proper credit report and portfolio, which makes them look very authentic and just like any other credit user.

Boosting the Credit Score:

Some fraudsters even take it a notch higher and make their entire credit score more authentic by putting an authorized user. This will make the report much more authentic, and then no one will be able to reject their requests.

The Bust Out:

After becoming authentic, creating the perfect credit line, and getting the highest amount of credit, it is time for the fraudsters to bust out. This means that after some time, when they have secured everything that they want, the fraudsters will disappear with all the credit. Hence, this will be the last time you will be seeing them and after they have caused significant damage to the account.

Conclusion:

There are many different types of thefts happening all around the world. One of the most common thefts and frauds is synthetic ID fraud. This is considered one of the most dangerous raids because it causes a lot of harm to the lenders. This is why it is essential to understand what it is and how this entire thing works.