comments
Synthetic Identity Theft
 Print
|
A few years ago, I discovered an error on my credit report where an extra social security number (off by one digit), a new home address, and a phone bill had been added to my report. I was able to get the information removed after jumping on a few hoops but it really opened my eyes about the weaknesses in the credit reporting system. To use a bit of database-speak, I always figured social security number was the primary key for each report – meaning it was unique to each report. If someone requested a report using an incorrect social security number, why would the bureau grant it? It’s because that makes the lending process easier and because the bureau doesn’t have to answer for its mistake. Enter, synthetic identity theft.
Synthetic Identity Theft
Synthetic identity theft is a special type of identity theft. There are two versions of synthetic identity theft. The first is where the thief rebuilds your identity using bits of information from different sources. They rummage through your trash and find a canceled check, they call your place of work and find out your telephone number, they snatch your mail and grab a 1099-INT the bank mailed you. They don’t get everything all at once, but piece by piece they put it all together. This type of piece-meal ID theft, while scary, isn’t as scary as the second type.
The second type of synthetic identity theft is where the thief steals only part of your identity and merges it with other information for use in places where the checks aren’t as stringent. They may use a name that’s similar to yours in connection with part of a social security number plus your address. To be honest I’m not entirely clear how they go about doing this because I’m not a synthetic identity thief! However, the thought of someone being able to do this, even after you’ve diligently shredded up documents, is still scary.
Preventing Synthetic Identity Theft
How can you prevent this? By being smart about your identity in a way that protects you against the regular identity thieves. First, put up a solid defense by implementing my do-it-yourself identity theft protection ideas. Then, follow the tips the SEC provides to prevent identity theft and review the FTC’s site on identity theft.
Beyond that, there are a few other places you can check like your social security report. Each year, about three months before your birthday, the Social Security Administration sends you a little booklet indicating your benefits. One of the pages will list your income each year, check that the number is accurate. Extra income could be a sign that someone has stolen your identity to get a job. If you don’t correct it, you could be liable!
Lastly, fix every last mistake you see in your report, even if it improves your score! I once had a credit card that had an average revolving balance of $5,000, way more than I typically spend in a month, and had it removed. You want your credit report to accurately reflect you as a borrower. Even the smallest errors, like an incorrect address, should be addressed because it could explode into something much bigger.
I wouldn’t go as far as signing up for an identity theft program, unless you want to use their services, because they don’t necessarily add anything you can’t do yourself. I reviewed Lifelock and found the service to be good, if you didn’t want to do things yourself. Remember, those packages are service packages and insurance packages, they don’t offer anything you can’t do yourself (ahh, the classic trade of time vs. money).
(Photo: nnova)
{ 9 comments, please add your thoughts now! }
Related Posts
 By Jim |
 Stumble It! Bookmark reddit.comTags: Identity Theft, LifeLock Jan 22, 2009 | Read more in Credit |
Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.
I agree about checking your SSA statements every year. I learned from my father regarding that. It turns out that many many years ago, his employer was not fully reporting the year income to Social Security. We all found that out when he applied for disability benefits. He did eventually win….but his monthly benefit amount would have amounted to much more if he had checked those statements.
I’m not sure if it’s synthetic identity theft or just having a common Asian name and getting your information glommed together by the bureaus because they are not as smart as they think they are.
Apparently there’s a University of Oregon graduate driving a VW who took some federal loans who might have my name. I had to clean her off my record before applying for a mortgage.
That’s true, but they had my social security number (though off by one digit), so it couldn’t have been by accident.
Thanks for this article, I was recently resetting my passwords and now i will be focusing a bit more on securing my identity in terms of private documents and online activities.
I will book mark this article. thanks
It just gets scarier every day. Vigilant!
Thank you for bringing this to our attention. It is clear that even more vigilance is needed. In this digital age, it is very easy to have information stolen, since everything is recorded, multiple times, and it only takes seconds to open a new account.
If an identity thief puts a phone bill (for a landline at least) on your credit report, wouldn’t that leave a trail back to them?
Yeah, but this would likely qualify the thief for the dumbest criminal of the year award.
Seriously, the identity theft criminals of today are far more careful and creative to do this so it is unlikely except in a rare incident that this would be possible. Identity theft is going high tech and will become more sophisticated as the years go by. The opportunity is there and most consumers will be easy targets because of simple and basic behavior traits that are not considered even the slightest bit risky.
Credit Report monitoring is important but unfortunately this is only a small factor in true protection against identity theft. Using proper safeguards such as obtaining current credit reports regularly, shredding all mail or documents with personal identification information such as drivers license, social security number, date of birth, or account numbers. Please be sure to be aware of the fact that many companies use the SSN for account numbers and this is a major concern and should be stopped as this is not the intended purpose for the SSN.
Identity restoration is needed also in the event that you become a victim of identity theft. Some services for identity theft protection include this protection feature. You will need to be careful in selecting the proper coverage plan for you.