Synthetic Identity Fraud
The FTC received 1.4 million identity theft reports in 2024.
Quick Answer
Synthetic identity fraud is a fast-growing financial crime where criminals combine real and fake information to create entirely new, fictitious identities, with projected losses expected to reach at least $23 billion by 2030 (Deloitte).
Think you've seen this scam?
Paste any suspicious text, email, or voicemail into our free checker — get a verdict in 5 seconds. Or get our free Scam Defense Playbook.
Free. No credit card. No signup required for the checker.
How It Works
1
A fraudster obtains a real Social Security number (SSN), often one belonging to a child, an elderly person, or someone with a limited credit history. This information is frequently purchased from the dark web following data breaches.
2
The criminal combines the legitimate SSN with fabricated personal details, such as a fake name, date of birth, and address, to create a new, synthetic identity. This creates a new file at the credit bureaus when the fraudster applies for credit.
3
The fraudster patiently builds a good credit history for the synthetic identity over months or even years. They open credit cards, make small purchases, and make payments to establish the identity as legitimate.
4
Once the synthetic identity has access to significant credit lines and loans, the criminal maxes out all available funds in an event called a "bust-out." They then disappear with the money, leaving financial institutions with unrecoverable losses tied to a person who does not exist.
Red Flags
- Receiving mail or pre-approved credit offers for someone you don't know at your address.
- Getting collection calls or letters for an unknown person or for a minor child.
- Noticing unfamiliar accounts or inquiries when you check your credit report.
- Being denied credit or government benefits because your Social Security number is already in use.
- Receiving a notice from the IRS that your child's SSN was already used on another tax return.
- Your application for financial aid for a child is rejected due to an existing credit history associated with their SSN.
What to Do If Targeted
- Immediately check your credit reports from all three major bureaus (Equifax, Experian, TransUnion) for any unfamiliar accounts or inquiries.
- Place a fraud alert and a credit freeze on your credit reports and on those of your children.
- Report the identity theft to the Federal Trade Commission at IdentityTheft.gov to get a recovery plan.
- File a report with the FBI's Internet Crime Complaint Center (IC3) at ic3.gov.
- Close any fraudulent accounts by contacting the financial institutions directly and provide them with your FTC Identity Theft Report.
- Contact the Social Security Administration if you believe your SSN has been compromised.
How to Report It
- FTC — Report identity theft to the FTC and get a personalized recovery plan.
- FBI IC3 — Report the financial crime to the FBI's Internet Crime Complaint Center.
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
- FTC — File a fraud report with the Federal Trade Commission.
Key Statistics
- Synthetic identity fraud is projected to generate at least $23 billion in losses by 2030. — Deloitte 2023
- U.S. lenders faced potential losses of $3.3 billion from synthetic identities across various loan types at the end of 2024. — TransUnion 2025
- Synthetic identities on credit applications have increased 14% year-over-year since 2020, a nearly 50% increase in four years. — Equifax 2025
- Losses from synthetic identity fraud jumped 50% from 2022 to 2023. — Equifax Digital Fraud Trends Report
- An estimated 1% to 3% of all bank accounts in the U.S. were opened using synthetic identities. — Institute for Financial Integrity 2026
Get scam alerts before they hit your parents' inbox
One email per week. The scam that's spreading right now, the red flags, and what to tell Mom and Dad.
Free forever. Unsubscribe in one click.
Frequently Asked Questions
Synthetic identity fraud occurs when criminals combine real information, like a stolen Social Security number, with fake information, such as a made-up name and birthdate, to create a brand new, fake identity. This new identity is then used to open fraudulent accounts, build credit, and steal money. Unlike traditional identity theft, there is no single, real person whose identity has been stolen, which makes it much harder to detect.
Synthetic identity fraud causes massive financial losses, with industry estimates ranging from $20 billion to $40 billion annually. The Deloitte Center for Financial Services projects these losses will reach at least $23 billion by 2030. Financial institutions bear the brunt of these losses when fraudsters "bust out" by maxing out credit lines on the fake identities and disappearing.
Criminals prefer to use children's Social Security numbers because they are clean slates with no associated credit history. A child's SSN is a valuable, unused asset that is unlikely to be monitored for fraudulent activity. This allows a scammer to use the number for years to build a credit history for a fake identity before the real owner is old enough to apply for credit and discover the crime.
To protect your child, you should request a credit freeze on their credit report with all three major credit bureaus. This action restricts access to their credit file, preventing new accounts from being opened. Regularly check for any mail addressed to your child, especially credit card offers, and be cautious about sharing their Social Security number.
Has this scam reached your family?
Ready to protect yourself?
We've vetted the tools that actually work — VPN, threat protection, and identity monitoring.
See our recommended tools →Get weekly scam alerts
One breakdown per week. Real threats. Zero fluff.
You're in! Check your inbox.