By Scott Sykes, CISO, Asurity

Synthetic identity fraud is one of the fastest-growing financial threats in the U.S. - and it’s getting a major boost from artificial intelligence. By blending real and fake information, fraudsters are now using AI to create entirely new “people” with convincing digital footprints. These synthetic identities are not only difficult to detect, but they’re also costly - expected to cause over $23 billion in losses by 2030.

How Fake Identities Are Created - and Grown

Synthetic identity fraud begins by combining a real Social Security Number (SSN) - often from a child, senior, or someone not actively using credit - with fabricated details such as a name, birthdate, and address. This patchwork identity becomes the foundation for a fake person.

But the deception doesn’t stop there. Fraudsters “age” the identity, opening small credit lines or phone accounts and making timely payments to build up creditworthiness. Over time, the synthetic profile becomes strong enough to qualify for larger loans and credit cards.

Then comes the “bust out” - when the fraudster maxes out all available credit and disappears, leaving lenders with the losses.

A Hypothetical Case: Meet “Joe Gotham”

Imagine a fraudster uses a child’s SSN to invent "Joe Gotham,” a 25-year-old with a fake address. Joe opens a store credit card, makes small purchases, pays on time, and gradually adds phone and utility accounts. Over several months, he builds solid credit. Eventually, “Joe” applies for high-limit credit cards and personal loans, maxes them out - and vanishes.

Because Joe never really existed, there’s no one to pursue for repayment.

Why Synthetic ID Fraud Is So Hard to Detect

• No Clear Victim: Since identities are partially fabricated, there’s no single individual who realizes they’ve been compromised.
• Delayed Discovery: It can take months - or even years - for the fraud to be uncovered.
• Targeting the Vulnerable: Children’s SSNs are especially at risk because they often go unused for years.
• High Financial Impact: Losses from synthetic fraud often exceed traditional identity theft due to its scale and complexity.

How to Protect Yourself and Your Family

Staying one step ahead requires a proactive approach:

✅ Social Media Smarts
Keep personal information private. Set profiles to “friends only,” and be cautious about accepting unknown requests.

✅ Secure Your Accounts
Use strong, unique passwords and enable two-factor authentication on all financial platforms.

✅ Monitor Your Credit
Regularly review your credit reports for unfamiliar accounts or activity.

✅ Freeze Your Credit
Consider freezing your credit - and especially your children’s credit - to block unauthorized activity:

• Experian Credit Freeze
• Equifax Credit Freeze
• TransUnion Credit Freeze

✅ Guard Your SSN
Don’t share your Social Security Number unless absolutely necessary, and understand how it will be used.

Final Thought

The FBI calls synthetic identity fraud one of the most rapidly expanding financial crimes - and it’s easy to see why. As fraud tactics become more sophisticated, awareness and action are your best defense. Stay vigilant, stay informed, and stay secure.

At Asurity, we’re committed to helping financial institutions navigate these complex threats with confidence. If you have questions or want to explore how to better protect your organization and customers, email us at info@asurity.com. We're here to help.