Scammers constantly evolve their tactics to make more money, con more people and get away with your hard-earned cash.
One of the newest schemes is synthetic identity theft, where a scammer takes multiple pieces of information from different people to create a fake identity. This allows scammers to stay undetected for much longer — you could be a victim without knowing.
Here’s how it works: Scammers pull together a social security number (often belonging to a minor or another individual with no credit history), the address of an abandoned property, as well as a fake name and birth date. They then apply for a credit card posing as the fake person. This application will most likely be declined, since the identity has no credit history, but it starts a record for that false identity.
Next, the scammer adds the new “person” to one or more legitimate accounts. Over time, they build up the “person’s” credit history, sometimes even making charges and payments for several years until they can qualify for large lines of credit. Once they get approved for their target amount, they “bust out” or charge their cards to the limit and discard the identity without paying anything or being traced.
If you are the unlucky person whose social security number has been used in one of these schemes, it will be difficult to detect. The abandoned address means that any mail or alerts won’t be delivered to you. Also, since the identity isn’t tied to your name or phone number, fraud alerts, credit monitoring or even a credit freeze won’t stop the scammer. However, because the unpaid debts are still tied to your social security number, the jilted creditors will eventually track you down.
Here are some BBB tips to help you avoid becoming a victim of synthetic identity theft:
• Minimize your exposure. Don’t give out your social security number if it isn’t necessary. Whenever a business, medical office or individual asks for this information, don’t be afraid to ask why they need it and how they plan to protect it.
• Protect your child’s personal information. A child’s information allows scammers to use a blank slate. Check their credit report annually and review anything that seems “off.”
• Keep an eye on your mail, phone calls, email or other means of contact. If something appears out of the ordinary, follow up right away. Bills you don’t remember or creditors trying to contact your child are red flags of identity theft.
• One of the best ways to protect your identity is shredding documents with sensitive personal information on them. The Better Business Bureau hosts public Shred Days to give consumers a place to securely and confidentially shred these documents. Visit BBB.org/NorthernIndiana for details on what documents to save and shred, as well as dates for upcoming Shred Days.
If you suspect that you or your child have been the victim of identity theft, visit IdentityTheft.gov to report it to the Federal Trade Commission and create a personalized recovery plan. Report your experience — whether you lost anything or not — at BBB.org/ScamTracker to help other consumers avoid the same scam.