You work hard to protect your identity. You’re cautious about sharing personal information, you regularly change your passwords, and you keep an eye on your credit report. But despite your diligence, there’s a form of identity theft that’s becoming increasingly prevalent and is notoriously difficult to detect — synthetic identity theft.

Understanding this growing threat can help protect your financial health and peace of mind. Here’s a comprehensive guide to help you grasp the ins and outs of synthetic identity theft so you can safeguard your future and that of your family.

What Is Synthetic Identity Theft?

Synthetic identity theft is an intricate form of financial fraud that blends stolen personal details with fabricated information to create a new, unique identity.

Unlike traditional identity theft where the criminal fully takes over someone’s identity, synthetic identity theft combines your real information, such as your Social Security number or date of birth, with other fake information to make it more difficult to trace.

The complexity of synthetic identity theft often allows it to go undetected for longer periods. By merging real and fabricated information, it becomes a monumental task to identify these fraudulent activities, often allowing criminals to continue to exploit the financial systems.

Their aim is to create a convincing identity that fools creditors, like banks and credit card companies, into extending loans and credit which are eventually defaulted on.

How Synthetic Identity Theft Works

1.   Gather Initial Information

The synthetic identity theft process begins with the acquisition of your personal details. Perpetrators may use various tactics such as phishing emails, which are designed to look like they come from trustworthy institutions, to lure you into revealing your data.

They can also hack into databases where your details might be stored — these can be databases of online retailers, healthcare providers, or even educational institutions. Some criminals might even resort to old-school methods like dumpster diving, where they scavenge for discarded documents that may contain your personal details.

2.   Craft the Synthetic Identity

After obtaining the necessary information, criminals enter the next phase which involves the careful blending of real and fake data.

This composite identity may use your Social Security number paired with a fictitious name, a different address, and even an altered date of birth. The aim here is to make this synthetic identity as realistic as possible while minimizing the risk of quick detection.

3.   Build Financial Credibility

Once the synthetic identity has been crafted, it’s time to give it financial life. Initially, criminals may apply for credit cards or smaller loans.

While these applications often get denied due to the lack of a credit history, they serve a hidden agenda: establishing a credit profile with credit bureaus. This initial interaction with the financial system is usually enough to create a thin credit file, helping give the synthetic identity some semblance of financial existence.

4.   Exploit Legitimate Accounts

With the credit profile set up, the fraudsters move to the next stage, “piggybacking.” This involves unauthorized association with existing, good-standing credit accounts.

They add the synthetic identity as an authorized user, thereby absorbing some of the primary account holder’s good credit attributes. This process can rapidly inflate the creditworthiness of the synthetic identity, helping make it appear more legitimate to creditors.

5.   Achieve the End Game

After successfully piggybacking and possibly obtaining small loans or credit lines, which they pay off diligently, the synthetic identity’s credit score begins to rise. Criminals may take this as a cue to aim higher, seeking out larger loans and more substantial lines of credit.

Once a significant credit limit is approved, they often max out the credit lines or withdraw large loan amounts, only to disappear, leaving the financial institution with losses and the real individuals whose details were stolen with a mess to clean up.

Synthetic vs. Traditional Identity Theft

The Intricacies of Synthetic Identity Theft

Synthetic identity theft involves a mix of real and made-up information, resulting in a new, distinct identity that can often bypass standard fraud detection measures. This makes it a long-term play for criminals.

The more they nurture this synthetic identity, the more complex and extensive the fraud can become. Because of the merged details, tracing these activities back to a single individual can become increasingly complicated, often allowing the criminals to evade capture for extended periods.

The Simplicity of Traditional Identity Theft

In contrast, traditional identity theft is typically relatively straightforward. Criminals steal an individual’s entire identity, often using it to make large purchases or withdraw funds as quickly as possible.

They aim to maximize their ill-gotten gains before the victim realizes what has happened and acts to stop further fraud. This immediacy often makes traditional identity theft easier to detect, but it can still be devastating for the victim.

Detecting Synthetic Identity Theft

Detecting synthetic identity theft can be challenging because the criminals are not merely hacking accounts but creating a façade of legitimate financial behavior. They typically nurture these fabricated identities by responsibly using the fraudulent account, making it appear as if a real person is just experiencing financial difficulties.

Children are particularly vulnerable targets for synthetic identity theft as they likely won’t be checking their credit reports for years, leaving ample time for criminals to exploit their Social Security numbers.

How to Help Protect Yourself Against Synthetic Identity Theft

Given its elusive nature and devastating impact, defending against synthetic identity theft often requires a more nuanced approach than traditional identity theft prevention. Here are some targeted strategies:

Protect your SSN

Your Social Security number is a golden ticket for fraudsters. In most cases, you should not carry your Social Security card with you. If you must disclose your SSN, make sure you’re in a private setting and try not to repeat it aloud within earshot of others.

Remember to discard documents containing your SSN carefully — shred them or black out the information.

Use Security Software

Deploy a multi-layered security software suite that provides comprehensive digital protection. Opt for a solution that offers real-time monitoring, identity theft insurance, and alerts for crimes committed in your name.

Understand Vulnerabilities

Knowledge is your first line of defense. Make it a point to understand the tactics fraudsters employ to steal your personal information. Once you know their tricks, you may be less likely to fall for them.

Monitor Your Credit

Regularly review your credit report for unauthorized activities. IdentityIQ identity and credit monitoring offers synthetic identity theft protection, alerting you to suspicious activities that could suggest your information is being used to create a synthetic identity

Bottom Line

Synthetic identity theft is an evolving and dangerous threat that can wreak havoc on your financial well-being and peace of mind. Taking proactive steps is more important than ever, and that’s where IdentityIQ services offer significant value.

The comprehensive platform not only provides credit monitoring in real-time, but also alerts you to threats to your personal information. The IdentityIQ robust suite of features are designed to help protect you and your family against various forms of identity theft.

Signing up for IdentityIQ is a quick, straightforward (and affordable!) process. If possible suspicious activity is detected once you’re under the protection of IdentityIQ, you are alerted in real-time, empowering you to act swiftly.


What are the warning signs of synthetic identity theft?

Indicators of synthetic identity theft may include receiving unexpected bills, uninitiated credit inquiries, or accounts you did not open appearing on your credit report. You might also receive calls or letters from debt collectors about debts that aren’t yours.

Who’s most at risk of synthetic identity theft?

Anyone can fall victim to this form of identity theft, but certain groups are more vulnerable. This includes children, whose credit histories are clean slates, and the elderly, who may not be as digitally savvy. Others at high risk include individuals with limited or poor credit histories, military personnel, prison inmates, victims of data breaches, and those with high social activity or public records.