Synthetic identity fraud is an increasingly prevalent method of identity theft that combines personal facts with fake information. Fraudsters use the tactic to combine ID numbers, names, dates of birth and other data with fake information to create a new identity and commit malicious activities such as phishing attacks.
According to Simeon Tassev, MD at Galix Networking, synthetic identity theft is by no means a new fraud scheme, but the increase in use of this harder-to-detect method puts pressure on both individuals and businesses to respond with a more vigilant protection system in place.
“By using synthetic identity fraud, phishing scams become far more sophisticated and therefore more effective at stealing personal and sensitive information,” says Tassev. “A synthetic identity can be used to create fake social media or e-mail accounts to contact potential victims, which on cursory inspection appear to be real and genuine accounts.”
Identifying synthetic identity fraud is difficult because of the combination of real and fake information, Tassev explains. The method works by way of phishing e-mails or messages being sent out to potential victims, with the fraudster posing as a legitimate individual or business, such as a bank or credit company. The ‘identity’ of the person can be searched, and results will appear, making them seem genuine. There may also be links to fake websites that look like real ones, file attachments that contain malware, and other common attack vectors.
“Due to the person’s authentic and genuine appearance, the phishing attack is more likely to yield the desired result – gaining access to sensitive information such as login credentials, ID number, financial information, and more. This information can in turn be used for a wider cyberattack or to steal a person’s identity, apply for credit, open bank accounts, and engage in other fraudulent activities,” warns Tassev.
The long-term repercussions of synthetic identity theft are most concerning when used for various financial activities, adds Tassev. Synthetic identities can be used to apply for loans, and the loan proceeds can then be used to make purchases or to engage in other fraudulent activities. They can also be used in tax fraud to file fraudulent tax returns, to claim refunds that do not belong to the fraudster, and in medical fraud to obtain medical services and prescriptions, leaving the victim with the bills.
“The repercussions include a damaged credit score, which can pose a challenge for a person seeking to acquire loans, credit cards or other financial products, or large unpaid debts and bills,” says Tassev. “Legal issues can also arise if fraudsters engage in criminal activity using the stolen identity, and it can be challenging having to prove your identity and clear your name should the synthetic identity become well-established."
Ultimately, preventing identity theft goes back to having all the basic checks and controls in place to protect information, he says. "It is important for both individuals and businesses to protect their information and always perform due diligence and follow correct methods for confirming identity."
Share