An identity fraud scheme that creates fake people could pose a potential threat from terrorists as well as other criminals. Fox News reports that the scheme creates phony identities out of fake people.

The U.S. government has expressed concerns because while individuals are most likely to use the ID’s, the fraud has the potential for a big payout and such large-scale schemes are often used to fund organized crime and terrorism, according to a Government Accountability Office report.

From Fox: Synthetic identity fraud creates, in effect, a new person by selecting the right social security number (SSN). This is a new twist to identity fraud, which typically uses an existing person’s identity to apply for credit or government benefits. 

“The most common plan here is to randomly choose a SSN that wasn’t issued prior to 2011, when the [Social Security Administration] changed the rules on how SSNs were issued,” Kevin King, Director, Product Marketing at ID Analytics, told Fox News.

“By choosing a number from this range, they can have reasonable confidence that there won’t already be a history of another person using that SSN. Many sites on the internet provide guidance on how to do this,” King added.

The fear is that a criminal or terrorist applies for a line of credit resulting in a credit inquiry which generates a credit profile for the synthetic ID. Once the ID is established via the credit file), “the criminal again applies for credit, gets credit established and then applies for multiple credit cards.”

From Fox: The criminal in the final “bust out” stage waits until the credit score is high enough to yield a large payout, then charges the maximum on the card, as spelled out in a report from the Government Accountability Office (GAO).

The key to a large pay off is patience.


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