Synthetic identity theft is one of
the fastest growing and more insidious forms of fraud because it creates
entirely new identities using stolen personal information such as Social
Security numbers. It’s also one of the more difficult to detect, so it can go
undiscovered for years. Thieves steal a Social Security number and combine it
with a fake identity to create fraudulent accounts.
How it Works
Fraudsters can use a stolen Social
Security number to establish a new credit history, using a fictitious name,
address and birth date. To establish credit, so that fraudsters can open up a
fraudulent account, they create a record of a fictitious person by adding that
person to a legitimate account as an authorized user. Over time a credit
history and score emerge for the fictitious person.
It could take several years for
the fraudster to build the credit score of the fictitious person to qualify for
a separate credit card account. It could take another couple of years to build
the credit score even more to earn higher credit limits. When the credit limit
is high enough, the fraudster goes out and maxes out the card before abandoning
Children are a favorite target of
synthetic identity thieves because parents don’t think to check their credit
reports until they are close to applying for credit. In that time frame,
fraudsters could repeatedly use a child’s social security number to create
numerous fake identities.
How to Protect Your Child and
Yourself from Synthetic Identity Fraud
Sign up for credit monitoring
on your own credit. A credit monitoring service will notify you if your
personal information has been used to open a new account.
Never provide your Social
Security account online, unless you know for a fact the request is
Check your child’s credit
report annually. A record of your child’s credit shouldn’t register on
credit bureaus databases, so if it ever does, it’s a red flag.
Never give out your child’s
Social Security number. If someone does require it, find out the reason why
and how it will be used.
Freeze your child’s credit.
You may have to establish a credit record for your child to be able to freeze
it. But it may be worthwhile to protect your child from identity theft.