Synthetic identity fraud
Fraud that combines pieces of personal information to fabricate a person or entity, rather than taking over one real person's identity. The Federal Reserve cites reports that it is the fastest-growing US financial crime.
The Federal Reserve convened a focus group of 12 fraud experts to settle on a definition because the industry was using several. Their recommended wording: synthetic identity fraud is the use of a combination of personally identifiable information to fabricate a person or entity in order to commit a dishonest act for personal or financial gain.
The distinction from ordinary identity theft is that no single person’s identity is being copied. The identity is built. The Federal Reserve says the lack of a common definition leads to inconsistent categorisation and reporting, which makes this type of fraud harder to identify and mitigate. It describes synthetic identity fraud as reported to be the fastest-growing type of financial crime in the United States, accounting for billions in losses annually.
For an individual, the useful step is to treat your own personal information as raw material. A credit freeze stops new credit accounts being opened in your name, and a fraud alert asks lenders to check with you first.
Where it shows up
- Synthetic identity fraud · A stolen Social Security number, given a name and a birthday that were never real, aged for years until a bank finally believes it.
Sources
- Synthetic Identity Fraud. Federal Reserve (FedPayments Improvement). Accessed 2026-10-10. Supports: The recommended definition, the point about inconsistent definitions, and the statement that it is reported to be the fastest-growing type of financial crime in the US.