Beware of The Synthetic-Identity Fraud!

I guess all of you heard about the "identity theft" concept. There's not much to say about it because all you need to know is that hackers or attackers in general use the private information concerning a real person to conduct other web activities such as shopping or even malicious attempts to invade some computers. Usually, the details are obtained from naive consumers who agree to provide the information or by using all sorts of utilities illegally installed on the systems. But here's a new one: synthetic identity fraud is a new type of identity theft which mixes the main concept with fake information.

Here's how it works: some people with evil intentions use real information about a certain user but they mix it with fake financial data to trick the banks in order to obtain money and credit cards. After this, it's only up to your imagination.

According to the Wall Street Journal, James Rose, a 46-year-old former credit-bureau operator, managed to trick numerous financial institutions to obtain money.

"Unlike traditional identity thieves, who purloin people's information to get loans or make purchases, fraudsters like Mr. Rose mix legitimate and phony data to create synthetic identities. This kind of fraud doesn't usually directly affect consumers. The big losers are banks, which get stuck with loan defaults and unpaid credit-card bills that identity thieves leave behind," the WSJ explains.

According to the same source, James Rose created no less than 500 credit cards under the name of Adam Gregory and numerous other fake names. Moreover, the entire amount of money is approximately $750,000 which is pretty impressive if the think that it all starts from malicious computer activities.

"U.S. Secret Service agents first detected the scheme in the summer of 2003, Mr. Rose says, when Mr. Newton was apprehended in Honolulu trying to cash checks made out by some of their fake identities. Agents subsequently raided the pair's headquarters and Mr. Rose's home. On Aug. 31, 2006, agents arrested Mr. Rose", the Wall Street Journal continued.