Synthetic identity theft is
a type of fraud in which criminals creates an identity instead of stealing
genuine identity. Fraudster combines real and fake information to create a new
identity. Real information used in synthetic identity fraud is generally stolen
or gathered from dark web. This new identity is used to open fake accounts, for
fraudulent shopping or other illegal activities. This fraud is one of the
fastest growing financial crime in India.
Synthetic identity theft
allows fraudster to steal money from loan companies including credit card
companies who provide new card or is used to fraudulently extend credit.
How synthetic identity theft works:
Fraudsters target individuals and steal their information to create a synthetic
identity. They steal information (e.g., Aadhaar card numbers) and replace it
with fake information like fake name, address, date of birth etc. In this kind
of fraud there is no identifiable victim, so it goes unnoticed for long.
Fraudster who commits this
fraud can use multiple identities at the same time and may keep accounts active
for months before the fraud is detected. Sometimes fraudster uses own
real information to create synthetic identity and acts as a victim to get their
credit line restored. In some cases, synthetic identity fraud is not meant to
steal money rather fraudster sells this identity to illegal immigrants to
obtain financial services.
Key Points:
·
In synthetic identity
theft, fraudster uses real and false information to create new synthetic
identity.
·
Fraudsters open accounts
and maintain the account responsibly for some periods to build up the credit
score.
·
Fraudster uses own real
information to create synthetic identity and act as a victim to get their
credit line restored.
·
Fraudster sells this synthetic
identity to illegal immigrants to obtain financial services.
Difference between synthetic identity theft and traditional
identity theft:
Synthetic identity theft is totally different from traditional identity theft.
As mentioned above, criminals behind synthetic identity fraud uses both
real and fake information to create new identity, which makes it harder to track.
But in traditional identity theft, fraudster uses other people’s real identity
for opening accounts and for varied other purposes.
How to protect yourself against synthetic identity theft:
·
Beware from phishing
attacks: Fraudster may use email, text or phone to trick you into sharing your
personal details.
·
Keep your documents safe
and secure. Shred them before discarding any documents which contains your
personal details.
·
Monitor your financial
records regularly. If you find any unfamiliar activity, contact your bank or
credit agency as soon as possible.
In India as per the
Information Technology Act 2000, Sec 66C deals with identity theft and is a
punishable offense. The law says, “Whoever, fraudulently or dishonestly makes
use of the electronic signature, password or any other unique identification
feature of any other person, shall be punished with imprisonment of either
description for a term which may extend to three years and shall also be liable
to fine which may extend to rupees one lakh.”