What does synthetic identity theft primarily involve?

Synthetic identity theft primarily involves creating entirely fabricated identities, which combine real and fictitious information to develop a new identity that does not belong to a specific individual. This type of fraud allows criminals to access services and credit by establishing a false identity, often by using legitimate social security numbers from individuals who are deceased or who have limited credit histories.

Synthetic identity theft is particularly insidious because it can go undetected for long periods, as the credit profiles created appear legitimate to credit agencies. Unlike traditional identity theft, where the focus is on impersonating a specific individual to commit fraud, synthetic identity theft creates a new persona that can lead to significant financial fraud.

The complexities and challenges of synthetic identity theft highlight the need for robust identity verification systems that can differentiate between real and synthetic identities, making it a growing concern in financial crime prevention.