 TITLE: What Is Synthetic ID Fraud? CONTENT: How Does Synthetic Identity Fraud Happen?\n-----------------------------------------\nSynthetic identity fraud is one of the fastest-growing types of financial crimes, and it can happen in several ways.\nA fraudster may steal someone's personal information or buy it on the dark web, then combine it with fake information to create a new identity. In some cases, the fraudster might even use a single SSN to create multiple identities.\nFraudsters may then use this new synthetic ID to build credit. It may take months or years to create good credit profiles for their fake identities, and then they \"bust out,\" or borrow a lot of money and disappear.\nSynthetic identities may also be used to fraudulently apply for government benefits, open bank accounts to launder money and commit other nefarious acts. A 2021 Experian report found that fraudsters are even using artificial intelligence to create fake faces in an attempt to fool companies' biometric verification systems.\nAnother way synthetic fraud can happen is when someone uses their real name, date of birth and contact information with an SSN that doesn't belong to them. Sometimes this occurs to unsuspecting consumers who are trying to build or rebuild their credit. They may reach out to a credit repair company that offers to help them \"start over\" with a credit privacy number (CPN). In reality, the CPN may be an SSN that hasn't been assigned to anyone yet or is stolen.\nStolen SSNs often actually belong to children, incarcerated people, homeless people or the elderly—many of whom don't have or actively use their credit information. The consumer might be trying to do the right thing by following a \"professional's\" advice to get their credit on track—but all the while may be inadvertently committing fraud by using the stolen SSN to open new credit accounts.\nOne reason synthetic fraud has been possible is that many organizations couldn't electronically check the name and date of birth associated with the SSN. And, since 2011, SSNs have been assigned at random—which means there isn't a clear link between the number and a person's place or date of birth.\nTo help solve this problem, the Social Security Administration launched an electronic consent-based verification service (eCBSV) in 2020. It's currently in an initial testing period with a select group of participants, including Experian. END