Many people dutifully check their credit report for suspicious or unfamiliar activity. When there's no red flags, they sigh in relief.
Today such measures can be no better than knocking on wood, thanks to a complex crime known as synthetic-identity fraud.
That's when criminals use a concoction of disparate data — including Social Security numbers, names and addresses — to create a fake identity with "his" or "her" own credit file. With this fictitious person, wrongdoers can take out 10 credit cards or a loan on a brand-new Ferrari.
It's the fastest-growing and hardest-to-detect form of identity theft, according to the U.S. Federal Trade Commission.
Credit reporting agency Equifax said the crime has "become the predominant tactic for fraudsters."
Synthetic fraud balances rose 68 percent between 2015 and 2016, according to TransUnion, another credit reporting agency (though the agency found the growth in the following year slowed.)
"High-tech fraudsters armed with real personal information on good consumers apply with multiple identities for multiple products with multiple lenders within hours or days," said Geoff Miller, head of global fraud and identity solutions for TransUnion, in a statement.
When criminals use a blend of different people's data, as well as some entirely made up information, it becomes harder for law-enforcement officials to both realize the crime and then locate the culprit, said R. Sean McCleskey, a retired United States Secret Service agent who supervised an identity-theft task force for more than a decade.
"If you're using an address you control, the person whose Social Security number you're using may never be getting the account statements," he said.
Once these criminals have successfully opened a new credit file, they often practice good personal finance, diligently building the fake consumers' credit scores.
A higher rating, of course, allows for greater damage down the road.
"These are organized crime rings that are behind this," said director of research Julie Conroy at research firm Aite, adding that she's heard of fraudsters "nurturing" a credit file for five years before taking off on their lending spree.
Synthetic-identity fraud resulted in $800 million in credit card losses in 2017, up from $580 million in 2015 — and that amount is expected to grow in the years ahead, according to a recent investigation by Aite.
Conroy said many factors have led to the proliferation of phony credit files.
As the economy improves, she said, "credit grantors have loosened their standards."
In addition, she said the Social Security Administration's decision to randomize people's numbers in 2011 has made it harder for credit companies to confirm that the nine-digit number a person provides them with matches their identity.
"That logic check went out the window," Conroy said. (Previously, people's numbers were correlated with their geography.)
Children are particularly vulnerable to this variety of crime. Since kids will not apply for credit until they're at least 18, criminals can utilize their Social Security number for years without raising alarm. But instead of saying the person is, say, 7, they'll say the person is 34.
Only once the individial goes to apply for his or her first credit card will they realize what's happened to them.
The elderly, who might not use their credit often, and the homeless, are also at an additional risk, according to the Government Accountability Office.
"We have to start being proactive on fraud instead of reactive," said former agent McCleskey. "Looking at what ways criminals are able to utilize gaps in otherwise legitimate methods to commit fraud."
• Give out your Social Security number as seldom as possible, Aite's Conroy said.
• If a doctor's form asks for it, she said, "Don't fill it out — they don't need it."
• Look into possibly freezing your child's credit, McCleskey said (if your state allows you to do so).
• Experian offers a way for consumers to surveil the dark web — where much of the information that goes into synthetic-identity fraud is collected, to find out if your data is on the market (though you have to pay for it).
• Conduct regular checks on your credit. "Look for unrecognizable aliases on the report," McCleskey said.
• If you receive any warning signs, such as collectors calling you for a debt that is not yours, immediately contact your bank and the authorities.