Cyber security

Synthetic Identity Theft: What is it, How does it work, and how you can prevent it.

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Synthetic Identity Theft

 

Synthetic identity theft happens when someone creates an identity by combining natural and fake personal information. The accurate information used in this identity theft is usually stolen. This information is used to open Fraud accounts, phony information about the users, and make fake purchases.

Synthetic identity theft allows criminals to steal money from users, including their credit cards, based on a fake identity.

How does Synthetic identity theft happen?

Synthetic identity theft is one of the significantly rising types of financial crimes, and it can occur in various ways. 

A hacker may steal or purchase someone’s personal information on the black market, then merge it with fake news to create a new identity. The hacker may even utilize a single Social Security number to establish many identities in rare situations.

Hackers who perform synthetic identity theft may utilize many identities simultaneously, and they may keep accounts open and active for months, if not years before the fraud is identified. In addition, they may open accounts and appropriately use them for a specific amount of time to improve their credit score and history.

 The higher credit score permits the hacker to receive an enormous payoff in the future.

Synthetic theft can also occur when someone uses their name, date of birth, and contact information with an SSN that does not belong to them. These can happen to unknowing individuals attempting to develop or rebuild their credit. While this is still fraud, the goal of these synthetic identity thefts is not to steal money from financial institutions; instead, they want access to bank accounts and other information. The user may be trying to do the right thing by following an expert’s advice to get their credit back on track while unknowingly committing fraud by opening new credit accounts with the stolen SSN. and credit cards that allow them to get paid and make payments and purchases.

How to Prevent Yourself Against Identity Theft?

When a synthetic identity theft applies to an account, it may appear to be a genuine customer with a limited credit history. 

Let us look at the steps you may take to safeguard your personal information.

  • Keep track of your credit report or personal information and know about protecting your data. If you have children, try to teach them how they need to be aware of these scams because they are the ones who become the victim first.
  • Be careful when you receive a call or email asking you to give your personal information or bank details.
  • So if someone gets access to any of your online accounts, use a complex password to protect yourself.
  • Be careful while you post your data on social media. Hackers may gather your personal information, date of birth, etc.
  • SSN sharing should be limited. It is highly relevant if you have children or are responsible for an older household. You can check with businesses whether they genuinely require an SSN or if another type of personal information or identity will work. 
  • Keep an eye on your email. If you receive unexpected mails from government benefits, Social Security statements or preapproved credit offers for your child, this could be evidence of fraud.
  • Unless you were involved in establishing or using the false identity, you are unlikely to be made responsible for any fraud action. 

What are the different types of Synthetic identity theft?

There are numerous types of identity theft, including some more minor scams, if caught, can make a massive impact on your financial life.

Let’s have a look at some synthetic identity theft.

1. Credit and debit cards fraud:

This fraud occurs when someone uses your credit card or debit card without your permission. Even if a thief does not have your physical card, they can still use your credit card number, PIN, and security code to make illegal purchases. Someone could even try to access your other accounts using your credit card details. The critical thing is that many credit card companies have procedures to help prevent and detect credit card theft before it causes long-term damage. 

2. Identity Theft of a Driver’s License:

If your wallet is stolen, you may be more concerned about your debit and credit cards. It’s easy to ignore your driver’s license, but this card contains your address, driver’s license number, and other critical information, making it a gold mine for hackers. In addition, once your license number is in the hands of another person, a hacker might use it falsely during a traffic stop to escape a fine, which could show up on your driving record. So if your license goes missing, make sure you file a complaint. 

3. Identity Theft by Mail:

Identity theft has increased in recent years. For example, one mail identity theft fraud involves collecting checks from mailboxes, changing them, and cashing them. Also, be careful of the email you discard. Account statements, banking information, and other personal information can all be stolen and used against you. 

4. Online purchasing fraud:

Online purchasing fraud can occur in a variety of ways. Some hackers have mastered getting into website accounts and then using your credit card information to make unauthorized payments. These can happen in many different ways, but the most typical is when users use their accounts while connected to an unknown Wi-Fi network, such as a coffee shop. Hackers can create genuine networks to steal the information of anyone who clicks. That’s why it’s always better to shop, perform your banking, and handle any other important information on a trusted private Wi-Fi network. 

5. SSN Identity theft:

Your Social Security number can be a vital tool for hackers, especially if they obtain additional personal information that they can use together to open fake accounts in your name. It can result in late charges appearing on your credit reports and lowering your credit score. Check your identifying information carefully while monitoring your credit reports regularly. Your Social Security number and its variations will be listed. Unknown names, residences, or other identifying information could be evidence of fraud. 

6. Tax identity theft:

Identity fraud is an example of when someone uses your personal information, including your Social Security number, to file a tax return in your name and obtain a refund. Tax identity theft is typically discovered when a suspect goes to file their tax return and realizes that one has already been filed for them. Be careful of any message demanding sensitive information from someone acting as an IRS officer. The IRS will never approach you in person, by phone, or by email without first sending you a letter.

7IoT identity theft: 

 Everything from phones to household appliances to automobiles is on the list. It is now connected to the internet. It occurs when someone takes advantage of a security problem in an internet-connected device to acquire access to your personal information. Because machines are often linked to vital user accounts (such as your social media accounts), each device could be a point of entry for a hacker.

If you find something is wrong, quickly change the passwords on all internet devices. Safeguard your home’s wireless network with a strong password, and ensure that all intelligent gadgets connect to the network you’ve created.

8. Mortgage fraud:

Mortgage fraud includes buyers and sellers who often cheat on their mortgage applications. If an identity thief obtains a homeowner’s Social Security number or mortgage account number, it can also happen.
It may be possible to obtain a home loan or a second mortgage and subsequently steal the funds with these details.

If you become a victim of synthetic identity theft, what do you need to do?

If you are a victim of identity theft, report it immediately. But, there is no particular consumer victim; it might go unreported for months until the identity theft uses up the rest of the credit line or financial institution.

Here are some further steps you can take if you believe you have been a victim:

  • After experiencing identity theft, file a vital report if an identity thief begins exploiting your information to perform crimes. Obtain copies of the police report; you might be questioned for them when telling your insurance, medical providers, credit agencies, and others that you have been a victim. 
  • They can also use synthetic identities to get businesses and file false tax returns.
  • If an identity thief uses your social security number(SSN) to create a fake identity, the crime will happen to you; it will affect your credit score and make it difficult to open new accounts. 

Why Kloudlearn?

KloudLearn provides a free cybersecurity programs to assist you in gaining the knowledge and skills you require. It facilitates and generates dynamic employee training. Through video sessions, you will learn directly from industry professionals.

Schedule a demo from Kloudlearn to gain free access to cybersecurity training classes.

1. How frequent is Synthetic identity theft?

Synthetic identity theft is the fastest-growing identity fraud, exceeding genuine name identity fraud in frequency. The ID analytics report presently accounts for 80-90 percent of identity fraud.

2. What is an account takeover Threat?

Account takeover refers to an attack in which hackers gain control of online accounts by exploiting stolen passwords and usernames. Hackers typically buy a list of credentials obtained from social scams, data breaches, and phishing emails through the dark web.

3. What can hackers do with your social security number?

1.Hackers can get credit cards in your name by using your SSN. 2.They can collect your tax refund using your SSN. 3.They can obtain a driver's license under your name by using your SSN. 4.They can secure a loan in your name by using your SSN.

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