“Fake” Synthetic IdentitiesSynthetic identity Synthetic identity theft, or synthetic identity fraud, occurs when a criminal creates an identity instead of stealing an existing one. The scam involves mixing real Social Security numbers, or fake numbers, with other pieces of information—names, addresses, and birthdates—to put together an entirely new identity, often using partially fake identity information. In contrast, the more familiar form of identity theft involves using the actual name, Social Security number, and other personal data of a single victim. Hurt Real People
According to Sontiq:
Over the last few years, synthetic identity fraud has taken off.
Once considered a complex and expensive crime to commit, synthetic ID fraud cost U.S. banks $1.8 billion in 2020 and is on track to cost banks $2.4 billion by 2023. Meanwhile, the U.S. Federal Reserve Bank of Boston attributed 20% of financial institution (FI) credit losses to synthetic identity fraud as recently as 2016.
Mitigation has largely fallen on the financial institutions where the crime occurs. But there are very good reasons why consumers should play offense — and financial institutions should be their top supporters.
What Are Synthetic Identities?
Learn more here: Synthetic ID Fraud: Fighting an Invisible Enemy [Video][Updated]
Synthetic identities are identities that do not correspond in their entirety to any real person.
However, they may well contain pieces and parts of personal information that belong to real people. This is a large part of why consumers haven’t been actively engaged on the issue – if it is not a real identity, how can there be any real victims? Unfortunately, as we’ll cover later, the consequences of these “fake” identities are very real.
According to SONIQ:
As any bank or credit union’s fraud team is quite aware, fraudsters are using synthetic identities to bypass processes meant to positively identify consumers. They are successful largely because institutions rarely verify identities with sources of record. Meaning, instead of verifying a Social Security Number (SSN) with the Social Security Administration (SSA), they consult third-party data brokers. Those data brokers obtain information from other organizations that have collected it from the consumer (which was likely never verified with the source of record, either). While it is becoming easier to verify some of this directly by using relatively new services like the Electronic Consent Based Social Security Verification (eCBSV) service from the SSA, it is far from commonplace.
The Internet & Digitization Has Transformed The Banking Experience — And Fraud, Too
Ten years ago, synthetic identity fraud was time-consuming, risky, and rarely committed in person. Committing this type of crime in the real world meant a fraudsterFraudster A Scammer or Fraudster is someone that engages in deception to obtain money or achieve another objective. They are criminals that attempt to deceive a victim into sending more or performing some other activity that benefits the scammer. would need forged identity documentation. If that documentation didn’t pass muster, they could be arrested on the spot, or at the very least, need to restart the major effort of obtaining another forgery and building a new false identity.
It’s very different now that applying for financial products online has become the norm. Criminals can take personally identifiable information (PII) stolen in any number of data breaches and combine it with a fictitious name, a random address or date of birth, and other elements that they like. This can be replicated hundreds of times in a day for little time or money. It’s a far cry from just a few years past.
3 Major Synthetic IdentitySynthetic identity Synthetic identity theft, or synthetic identity fraud, occurs when a criminal creates an identity instead of stealing an existing one. The scam involves mixing real Social Security numbers, or fake numbers, with other pieces of information—names, addresses, and birthdates—to put together an entirely new identity, often using partially fake identity information. In contrast, the more familiar form of identity theft involves using the actual name, Social Security number, and other personal data of a single victim. Threats To Families And Individuals
Synthetic identity fraud is rising at an alarming speed, and it’s causing actual damage to individuals and families:
- It puts kids’ financial futures at risk. The SSNs of children are among the most highly valued elements in many synthetic identities — preferred because a child’s credit report is almost always a blank slate.
- Synthetic identities can adversely affect consumers’ credit. Criminals can make victims out of consumers by coopting elements of their PII to build a synthetic identity, such as their SSNs. As the fake identity is used to obtain new accounts, that activity can end up on the legitimate consumer’s credit report – especially if they have little to no past credit history. Having alternate personal information (name, address, employer, etc.) appended to a credit report can cause problems for the legitimate consumer when they attempt to obtain credit in the future. It presents a confusing and inaccurate picture of activity and risk level. Even worse, the negative credit activity will quickly manifest as fraudulently obtained accounts start to go unpaid. At this point, restoring one’s credit report and trying to untangle the confusing mix of identities presents a painstaking, time-consuming nightmare for most consumers.
- Credit repair services might be making fraudsters out of customers. Finally, shady credit repair services are encouraging them to use a ‘Credit Privacy Number’ (CPN) in place of their SSN when applying for new accounts. Even if their own credit history leaves something to be desired, consumers that use CPNs to obtain credit are committing fraud in the process (according to existing regulations!)
Vigilance Is The Most Important Way To Keep Synthetic Identity Fraud At Bay.
Financial institutions support this by offering access to credit reports and account activity alerts – but these measures raise red flags after fraud has already happened.
Some service providers say it is possible today to take a more proactive approach.
Financial institutions can be an important partner in proactively monitoring consumers’ sensitive PII, alerting them when it’s been compromised, and clearly identifying what mitigation steps should be taken. By making identity monitoring available to consumers and educating them on their role in stopping synthetic identity fraud, banks and credit unions are also reducing their own risks. Because when a fraudster uses a synthetic identity, it creates victims of financial institutions and consumers – and it is in the real interest of both to work together and stop it.
Resources:
- Portions provided by SONIQ – a leader in the identity protection market
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We also offer separate support groupsSupport Groups In a support group, members provide each other with various types of help, usually nonprofessional and nonmaterial, for a particular shared, usually burdensome, characteristic, such as romance scams. Members with the same issues can come together for sharing coping strategies, to feel more empowered and for a sense of community. The help may take the form of providing and evaluating relevant information, relating personal experiences, listening to and accepting others' experiences, providing sympathetic understanding and establishing social networks. A support group may also work to inform the public or engage in advocacy. They can be supervised or not. SCARS support groups are moderated by the SCARS Team and or volunteers. for family & friends too.
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This program is designed to help scamScam A Scam is a confidence trick - a crime - is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. victims struggling to recover on their own and for those who want to understand the overall process. You can be using other resources, such as traumaTrauma Emotional and psychological trauma is the result of extraordinarily stressful events that shatter your sense of security, making you feel helpless in a dangerous world. Psychological trauma can leave you struggling with upsetting emotions, memories, and anxiety that won’t go away. It can also leave you feeling numb, disconnected, and unable to trust other people. Traumatic experiences often involve a threat to life or safety or other emotional shocks, but any situation that leaves you feeling overwhelmed and isolated can result in trauma, even if it doesn’t involve physical harm. It’s not the objective circumstances that determine whether an event is traumatic, but your subjective emotional experience of the event. The more frightened and helpless you feel, the more likely you are to be traumatized. Trauma requires treatment, either through counseling or therapy or through trauma-oriented support programs, such as those offered by SCARS. counseling or therapy, qualified support groups, or completely independent – on your own!
The SCARS Steps program is a complete program and is provided for the purpose of helping scam victims to overcome this experience. Throughout this SCARS Steps Program, we speak about issues and challenges that a victim may have and help guide them through their recovery. But each person is different and it is important to understand your own reasons for being vulnerable to being scammed.
After the trauma of being scammed, you need to take steps to recover and move on. This may be an alternative to counseling in the short term, but we still encourage you to seek out professional help & support. Throughout this SCARS Steps Program, we speak about issues, challenges, defects, or problems that a victim may have in a generalized way.
The SCARS GREEN BOOK will help you recover from your scam offline and it will always be there when you need it!
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HOW TO HELP ROMANCE SCAM VICTIMS FOR FAMILIES & FRIENDS OF SCAM VICTIMS
This SCARS Publishing book represents a complete guide to help the families and friends understand how these scams work and how to help the victim.
The SCARS Slate Book should be purchased by family and friends to better understand what happened to the victim and the traumatic impact on them. But it can also be shared by the victim so that they do not have to explain to family and friends about the scam. This publication is to help others to help Scam Victims to make it through this traumatic experience and recover.
Each person is different and it is important to understand how relationship scamsRelationship Scam A Relationship Scam is a one-to-one criminal act that involves a trust relationship and uses deception & manipulation to get a victim to give to the criminal something of value, such as money! Click here to learn more: What Is A Relationship Scam? work and why people are vulnerable; to being scammed, how they were lured in, then groomed and manipulated. This understanding is essential in helping them through the process of ending the scam and then on to recovery. The SCARS Slate Book will provide the information necessary to help support a victim through this process.
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Helps you get and stay organized. This publication is to help Scam Victims organize their crime information. Complete this information before reporting to the police then bring this book with you
Before or after reporting to the police the RED BOOK gives you a dedicated tool to record all the essential facts of this crime. The Victim, the Scammers, the Money, and your Police interactions. Everything that really matters can be easily recorded for your immediate use and for the future!
As we have seen, money recovery/repayment programs can become available years after the scam ends and you need to keep all the details of this crime in case it is needed. We have also seen scammers being extradited to the U.S. and other countries, this will help in the event you testify or give statements, Additionally, this helps you have your information ready to qualify for victims’ benefits, compensation, or aid.
The Official SCARS RED BOOK is your way of recording all the important facts of this crime so that you do not lose essential information, Complete the RED BOOK then put it away with the confidence that you will have it if or when it is needed.
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