“Synthetic identity fraud is when the fraudster uses one true piece of your identity… and then combines it with fake information, so perhaps a different name, a different date of birth,” said Eva Velasquez, the CEO of Identity Theft Resource Center.
By some reports, synthetic identity fraud now accounts for 85 percent of all identity fraud in the United States, costing an estimated $2 billion a year, according to investigators.
“The scope can vary and there are some very large fraud rings,” Velasquez said. “Particularly when they’re using online platforms, they can affect tens of thousands if not hundreds of thousands of people.”
Investigators say that one form of synthetic identity fraud started with the sale of CPNs, or Credit Profile Numbers, by credit repair companies.
“A CPN is a multi-digit number that looks very similar to a social security number,” said Major Don Woodruff of the Duluth Police Department in Duluth, Georgia. “And it what’s given to people by these credit card repair companies for them to go out and open up new accounts.”
To see how it works, two ABC News “Nightline” producers visited one credit repair company in Baton Rouge undercover and posed as consumers, while they secretly filmed the meeting on hidden camera.
The owner offered to sell our producers a CPN, and said it was a replacement for a social security number. He also told them they could use it to open up new credit cards, after advising them to alter their addresses. This then creates a new profile in the eyes of credit card companies, now unable to link the customer with their old social security number and, presumably, bad credit.