Republic of the Philippines
National Police Commission
PHILIPPINE NATIONAL POLICE
Camp BGen Rafael T Crame, Quezon City
ACG-CYBER SECURITY BULLETIN NR 191: Understanding the Risk of Synthetic Identity Fraud
Reference Number ACG-CSB 052720189
The following information was obtained from different cyber security sources for notification to all parties concerned pursuant to the mandate of the Philippine National Police Anti-Cybercrime Group (PNP ACG) and classified as “Restricted” pursuant to the PNP Regulation 200-012 on Document Security and Impact Rating as high based on PNP Information Communication Technology (ICT) Security Manual s.2010-01 p. 22 and p.129.
Synthetic identity theft is a type of fraud in which a criminal combines real and fake information to create a new identity. The real information used in this fraud is usually stolen. This information is used to open fraudulent accounts and make fraudulent purchases.
Fraudsters who commit synthetic identity theft steal information from unsuspecting individuals to create a synthetic identity. They steal Social Security Numbers (SSNs) or a Credit Privacy Number (CPN) with false information like names, addresses, and even dates of birth. Because there is no clearly identifiable victim in this kind of fraud, it often goes unnoticed.
People who commit synthetic identity fraud can use multiple identities simultaneously and may even keep accounts open and active for months even years before the fraud is even detected. The culprits may open accounts, use them responsibly for a certain period of time in order to build up the credit score and history. The higher credit score allows the fraudster for a bigger windfall down the road. In some cases, criminals rack up fraudulent charges, then use real information used to create their fake identity to pose as a fraud victim and get their credit line restored. Then, they use the additional credit to commit further theft.
Synthetic identity theft is one of the most difficult types of fraud to detect. Filters employed by financial institutions may not be sophisticated enough to catch it. When the synthetic identity thief applies for an account, it may seem like a real customer with a limited credit history.
Financial institutions cannot even tell synthetic identity theft has occurred. This is because the criminal establishes a history of using the fraudulent account responsibly before it becomes delinquent to make it look like a real person experiencing financial problems and not a criminal who racks up charges and becomes delinquent on the account at the first opportunity. This type of fraud is called bust-out fraud.
Since synthetic identity theft has no specific consumer victim, it can continue undetected for months, until the identity thief uses up the remainder of the credit line, leaving the lender, bank, or other financial institution holding the bag.
Synthetic identities can also be used to obtain employment, to file fake tax returns, to get medical care, or for other fraudulent purposes. And if an identity thief uses your real Social Security number to create a fictitious identity, the crime could come back to haunt you, potentially affecting your credit score and making new credit lines difficult to open. Yes, the rest of the information may not be yours, but that is your Social Security number, an important piece of personally identifiable information, after all.
Right now, it is hard to really pinpoint the financial impact of what these synthetic identities have, though it is believed that it has caused billions in losses. That means, however, for an ID thief, there are billions to be made. Fortunately, there are some things you can do to protect yourself including being very careful about the information you are sharing, especially on social media. Also, make sure you have a credit freeze and identity theft protection and that you are regularly checking your credit report.
All PNP personnel as well as the public are advised to follow the tips in order to avoid being a victim of Synthetic Identity Fraud:
- Do not click on e-mail links;
- Do not open attachments from unknown senders;
- Keep your Social Security card and any documents that contain the number safe and secure;
- Beware of phishing attempts by phone, email, or text to trick you into sharing your Social Security number and other personal information;
- Use Internet security software.
For additional information, please refer to the following websites:
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