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Tuesday, April 08, 2008


SYNTHETICS ARE EVERYWHERE…EVEN IN IDENTITY THEFT


Although it isn’t any easier to fix, it is much simpler to detect. I am talking about “real” ID theft where the thieves steal the credit history you have established over the years and drain your bank accounts or max out your credit cards. Because the data is all authentic, the transactions go right to your credit report which, if you are monitoring as you should be, alerts you immediately to what is going on. That is also the easiest method for stealing your identity for the crooks. But there’s another way, according to the experts, that is much tougher to pull off, but just as hard for you to detect. It’s called “synthetic” identity theft—as compared to “real”—and it involves assembling data with a falsified name and address, but a valid, stolen, Social Security number. The crooks might even add fictional credit history or other characteristics like your bank account number—if they know it—to apply for new credit accounts, according to Arian Eigen Heald in IT Knowledge Exchange. See Part 1, Part 2. Thanks to Bankrate.com, here is an excellent description of synthetic identity theft: “A type of ID fraud in which thieves literally create new identities either by combining real and fake identifying information to establish new accounts with fictional identities or create the new identity from totally fake information. In typical synthetic fraud, a fraudster uses a real Social Security number and combines it with a name other than the one associated with that number. The combination often doesn't hit the consumer's credit report.” ID Analytics, a company providing identity fraud prevention for individuals and business, says “synthetic fraud is quickly becoming the more common type of identity fraud, surpassing ‘true-name’ identity fraud.” Best Security Tips, a site with generous input to this issue, gives a hypothetical scenario that explains synthetic identity fraud through stealing somebody’s medical records. They mention another company in the same field as ID Analytics, and with a wealth of information for consumers. It is Identity Theft 911, and you should visit this site and check out the options from “Avoiding Identity Theft” to “Facts and Resources” on the subject. This scheme works because credit bureaus are fixated on procedures that produce automatic output like your credit score, which can be measured instantly and supply a reasonable answer—at least to credit providers—to say yes or no. Because of those kinds of algorithms which allow variations in input—as Heald describes it—the fraudulent data is added to the credit report of the person whose Social Security number was used, and treated as additional information for that record. When the bad guys fail to pay the bills of the newly opened account, the negative data also ends up on the credit record as if it actually belongs there. All because of procedures by the credit bureaus that obviously should have better protection against counterfeit credit information. I hesitate to keep belaboring the same theme over and over, but there is really no other answer to correct this situation. Consumers should be given control over their names and personal data, and be compensated when it is sold to provide incentive to accept this responsibility.

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