Synthetic identity fraud: The bad guys are now creating identities instead of stealing them

Apr 22, 2022, 7:06 PM | Updated: Jun 19, 2022, 9:54 pm

SALT LAKE CITY — Identity theft remains one of the top financial crimes in the world, but now, crooks have figured out a new fraud by combining both real and fake personal information to create a new identity.

You would think that there would be safeguards in place to keep crooks from making up a person. After all, we must prove we are a real person from time to time with things like our Social Security and driver’s license numbers. But bad guys have figured out how to create new identities and they are getting some pretty big paydays for their work.

You are likely familiar with identity theft – a bad guy pretends to be you for various nefarious reasons. The process can be a time-consuming pain for the crooks: They have to stalk you, hack you, or trick you – to say nothing of the fact that we are getting more adept at spotting the frauds when they show up in our inboxes or online.

Now the crooks are adapting by moving past stealing someone’s identity to creating their own.

“You make up a fake person, trick the credit bureaus and financial institutions into believing that this fake person is real,” said Naftali Harris, cofounder and CEO of cybersecurity firm SentiLink. “And then use that fake person to steal money from financial institutions, launder money, or commit other kinds of financial crimes.”

It is called “Synthetic Identity Fraud,” and SentiLink describes it as the fastest-growing type of identity fraud in the U.S., accounting for nearly 85% of all ID fraud cases in the country.

“For anyone watching at home, don’t go and actually do this,” warned Harris. “This is a felony, but it’s surprisingly easy to do.”

We will not get into the nitty-gritty of it here but suffice it to say it is easy and it is lucrative because the crooks generally use these fake personas to target big banks with much deeper pockets than you or me.

Before you shrug your shoulders and say, “sounds like a big bank problem,” Harris said make no mistake about who is actually covering their losses from synthetic identity fraud.

“When banks suffer losses,” said Harris, “they increase rates and fees on their entire customer base to make up for it.”

Synthetic fraud is particularly bad for folks who do not have established credit — young people and immigrants.

Think about it: banks become skeptical about whether a person applying for a line of credit is a real person and so they may deny money to a real person who doesn’t have much credit history.

KSL 5 TV Live

KSL Investigates

Wendie Muhic is the frustrated owner of a 2007 Chevy Tahoe, that dies a lot....

Matt Gephardt & Sloan Schrage

West Jordan car owner says odometer fraud has left her stuck paying thousands on a lemon she can’t drive

Wendie Muhic is the frustrated owner of a 2007 Chevy Tahoe that dies a lot. Now she is left paying for it.

3 days ago

Woman texting...

Matt Gephardt

How crooks use texts to get your money, identity, or both.

If you used a mobile phone for any length of time, it’s likely you have gotten text messages that seem like an honest mistake that innocuous-looking text might have come from a scammer.

4 days ago


Daniella Rivera and Keira Fairmont

Treat and Release: How Utah weighs the risk of repeat sex offenders

The KSL Investigators examine Utah’s corrections system, responsible for treating and releasing people who commit sex crimes.

4 days ago

Viewmont High School softball field...

Matt Gephardt and Cindy St. Clair

High school softball team calls foul on field conditions, 2 years after Title IX complaint

The Viewmont High softball team played its 2023 season on a field with dead, patchy grass and none of the improvements promised by the school district. Why weren’t required upgrades completed? Matt Gephardt investigates.

5 days ago

Mechanic works on a car...

Matt Gephardt

Driver apathy keeps tens of thousands of unsafe cars on Utah roads

Every year, the vehicle history report business Carfax releases its study on how many cars are on the roads with unfixed safety recalls.

6 days ago


Mike Headrick and Cindy St. Clair

AI Revolution: The past, present, and future of artificial intelligence in Utah 

The world of AI is only as limited as human imagination. So how do you interpret artificial intelligence and its applications in your life? Mike Headrick investigates.   

6 days ago

Sponsored Articles

Asian little girl playing arcade game on the computer machines at the shopping mall outlets...

Get Out Pass

Family Fun Activities in Utah You Have to Try This Summer

These family fun activities will entertain you all summer, so if you ever feel stuck in a rut wondering what to do, refer to this guide!

Woman IT specialist in elegant suit working on notebook computer in data center next to server rack...

Les Olson

Your Complete Guide to Outsourcing IT Services

This guide covers everything you need to know about the different benefits of outsourcing IT services to meet your small business needs.

diverse group of friends dance outside under string lights...

Lighting Design

5 Frequently Asked Questions About Outdoor Lighting

Read for the most frequently asked questions about outdoor lighting to help narrow the search for your home.

Stack of old laptops with dark background...

PC Laptops

Old Laptop Upgrades You Need to Try Before Throwing it Away

Get the most out of your investment. Try these old laptop upgrades before throwing it out to keep it running fast and efficient.

Happy diverse college or university students are having fun on their graduation day...

BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.

Close up of an offset printing machine during production...

Les Olson IT

Top 7 Reasons to Add a Production Printer to Your Business

Learn about the different digital production printers and how they can help your company save time and money.

Synthetic identity fraud: The bad guys are now creating identities instead of stealing them