Data threats are leaving millions of people vulnerable to identity breaches. According to Javelin Strategy & Research, the cost of identity scams reached $56 billion last year in the US. And they affected 49 million Americans. That’s more than 1 in 7 people.
Chances are, many individuals aren’t even aware of threats to their personally identifiable information (PII). Some identity breaches could take years to come to light. Data stolen today could be used even a decade from now if you don’t take adequate measures to mitigate threats.
And for a criminal, getting access to a single piece of PII is enough to plan an elaborate scam. That’s what happens with synthetic fraud. This is a complex form of identity theft that often uses just one or two identifiable data of victims.
Synthetic identity thefts: how do they work?
Typical identity theft targets a specific individual. For example, a fraudster could steal your social security number. And by accessing a few other pieces of identifiable information, they could target you for financial fraud. They could apply for a loan under your name or file tax returns. And you would often find out when a call comes in from a debt collector or when you receive a letter from the IRS.
But synthetic identity scams work differently from these. They involve fake identities built using pieces of real, identifiable data stolen from one or more people. When combined with some fabricated information, they could become near impossible to flag. And criminals who assume these new identities could devise sophisticated schemes for years. They can even sell them to illegal immigrants so they can live and work using synthetic IDs.
But clearly, executing this type of identity fraud is much harder than the traditional identity scam. So, why go through all that trouble? Usually, it’s because rewards are higher for synthetic fraud. For example, a criminal could carry out a host of schemes using these IDs. And tracing them is extremely difficult since synthetic identities use both fake and real data belonging to several individuals. So, looking for these criminals would almost be like searching for someone who doesn’t really exist.
Preventing synthetic fraud demands a concerted effort.
The consequences of synthetic identity fraud will depend on several factors, such as the type of personal information used and the scale of the crime committed. For example, criminals could steal your child’s social security number and combine it with fake information to create a synthetic identity.
They can then use it to take out lines of credit and to apply for a job. And a fraudster could use it for years without worry until your child becomes an adult and finally goes through a credit check. This is usually when you would find out that something’s amiss. So, compared to most other types of identity fraud, synthetic ID scams could cause significant damage to a person over a longer time.
It’s not just individuals who could experience long-term repercussions with the misuse of their personally identifiable data. The cost of synthetic identity fraud could be substantial for organizations, too.
For instance, the IRS could pay a tax refund based on a fraudulent claim, or a financial institute could approve a massive loan to a fraudster that used a synthetic ID. In all these instances, there’s little they could do to recover the financial loss. Reputational damage could be equally damaging.
So, a concerted effort by both individuals and organizations is essential to prevent synthetic identity fraud.
Protecting your identity against synthetic scams
The complex nature of synthetic identity scams and their alarming consequences make it even more critical to reassess your data security practices. While organizations focus on identifying these threats, individuals must strengthen their data security to avoid becoming victims.
Your PII is sacred
Personally identifiable data represent your unique identifiers. They’re like your digital fingerprint, only far easier to steal and misuse. Ultimately, treating them with due confidentiality is your responsibility. Unfortunately, many people are quick to share identifiable data and are not asking enough questions from those seeking excessively personal information.
So, what can you do to keep your PII safe?
- Educate yourself about the many types of data that could represent your identity. Today, your PII could take many forms, from your credit card details to your phone number. So, understanding these is key to identifying what you should protect.
- Use anti-malware software to protect data storage devices, including your computer and phone.
- Keep all confidential documents locked in a drawer. This should include any type of printed material that contains identifiable data.
- Avoid carrying your social security card in your wallet unless you need it for a specific reason.
- If you must discard originals or copies of important documents, use a shredder to make them difficult for criminals to retrieve.
- Adopt a cautious approach to social media sharing. The photos you share on Facebook and the comments you make on Twitter could all provide critical clues for a cybercriminal to piece together personal information.
- Minimize the number of mobile apps you download onto your phone and other smart devices. Third-party apps could be particularly risky and may track personal data without your knowledge. They are often known for seeking unnecessary app permissions like access to your contact list and media library.
- Assess the risks of sharing identifiable data such as your name, contact number, and address, even if the request is legitimate. Reputed companies that carry customer records are at higher risk of experiencing cyberattacks since they provide easy access to large-scale databases. Businesses like the Marriot hotel chain and Equifax credit bureau have all experienced these threats, compromising the personal information of millions of people.
- Install a password manager to keep your account credentials safe. Multi-factor authentication is another valuable tool to strengthen password security.
Digital spying can take many forms.
Digital spying is not always about hacking attacks. There are many organizations constantly scanning your online activities. And the information they collect could be shared, traded, and sold dozens of times. Regulating these practices is a challenging task in cyberspace. It’s not the same as restricting activities and enforcing laws in the real world.
This makes it essential to adopt cybersecurity practices not just to protect your data but also to ensure your privacy. For instance, you should practice caution when allowing website cookies. These could gather an incredible amount of data, which could reveal your personal preferences and online behavior.
Your browser could also collect information, such as your search histories and account passwords. So, it’s important to block these data collectors to keep your PII secure.
To wrap up
Synthetic identity theft is an elaborate scheme that combines both real and fake information to craft incredibly realistic identities that exist only on paper. Their very nature makes them much more difficult to detect, so fraudsters could carry out their scams for years without getting caught.
As a result, the cost of a synthetic fraud could be far higher compared to a typical identity scam, and recovering from it could be painfully challenging. So, while organizations strengthen their identity verification and fraud detection processes, you need to do your part to protect identifiable information from data predators.