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

Top Stories

KSL Investigates

Delric Ellington and Kael Ellington talk about a stray bullet that entered their Salt Lake City hom...
Annie Knox and Daniella Rivera, KSL TV

Amid increase in youth shooting deaths, Utah pediatricians push for tougher gun laws

The number of Utah children and teens killed by gunfire reached a record high in 2020, in part because of a spike in homicides. Two Utah pediatricians are calling on the state to pass what they see as solutions to the troubling trend.
3 days ago
Albee Bostrom and Sissy McDade turned their love of thrift store shopping into a business: Thrift H...
Matt Gephardt

Gephardt Busts Inflation: Second-hand shopping, selling surge as Utahns try to beat rising prices

Data shared with the KSL investigators shows Utahns are trying to bring in more money and reduce spending as they try to bust inflation.
3 days ago
Bry Hansen visits his son's grave in South Jordan. (Tanner Siegworth/KSL TV)...
Annie Knox and Daniella Rivera, KSL TV

The number of Utah kids and teens dying by gunfire hit a record high in 2020

The state hit a devastating milestone in 2020, recording the highest-ever number of shooting deaths among Utahns 18 and younger.
3 days ago
Matt Gephardt & Sloan Schrage

Get Gephardt: What can you do if you pay someone to do work but they disappear with your money?

Imagine paying a deposit only to have them take your money and ghost you.
5 days ago
Photo illustration (Photo by Matt Cardy/Getty Images)...
Matt Gephardt

Get Gephardt: Your credit card can up your interest rate without telling you

If your credit card company raises your interest rate even just a little bit, it could have a significant impact on how long it takes you to get out of debt. A relatively new law means your credit card company can do just that and they do not even have to give you the heads up.
6 days ago
UDOT says it spend over $1.5 million on fixing potholes in the last fiscal year, FY 2022....
Matt Gephardt & Sloan Schrage, KSL TV

Submitting a claim to the government for pothole damage? Good luck with that

A pothole can do serious and expensive damage to your car. But as Get Gephardt found, if you hit a bad spot on a Utah road, don’t expect the city or state to rush to pay for your repairs.
7 days ago

Sponsored Articles

Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
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: Ask these questions 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.
Cloud storage technology with 3d rendering drawer with files in cloud...
PC Laptops

How backing up your computer can help you relieve stress

Don't wait for something bad to happen before backing up your computer. Learn how to protect your data before disaster strikes.
young woman with stickers on laptop computer...
Les Olson

7 ways print marketing materials can boost your business

Custom print marketing materials are a great way to leave an impression on clients or customers. Read for a few ideas to spread the word about your product or company.
young woman throwing clothes to organize a walk in closet...
Lighting Design

How to organize your walk-in closet | 7 easy tips to streamline your storage today

Read our tips to learn how to organize your walk-in closet for more storage space. These seven easy tips can help you get the most out of your space.
Types of Computer Malware and Examples...
PC Laptops

5 Nasty Types of Computer Malware and Examples | Everything You Need to Know to Keep Your Computer and Family Safe

Here are the different types of computer malware and examples that could potentially infect your computer.
Synthetic identity fraud: The bad guys are now creating identities instead of stealing them