By Michael McCullough on September 3, 2026 Estimated reading time: 5 minutes
Get to know the signs of this new form of scam that combines real and fake information to create a whole new identity.
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Photo by Tima Miroshnichenko from Pexels
To steal your identity, criminals have to get their hands on a lot of your private information: name, birthdate, address, Social Insurance Number (SIN), and more. That’s not easy to do, even when the target takes few precautions or has a habit of oversharing.
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But an increasingly common form of digital fraud can be perpetrated with just a few snippets of personal information. And even if cyber criminals are not impersonating you specifically, there’s a danger in having even a small component of your online identity form part of what’s known as synthetic identity fraud.
What is synthetic identity fraud?
Synthetic identity theft is a form of financial fraud in which a real person’s key information, such as their SIN or date of birth, is stolen and combined with other falsified personal information to create a new identity. Criminals use these new identities to take out loans or set up bank and credit card accounts. Eventually, they stage a “bust out” fraud, charging or borrowing a large sum, then disappearing without a trace. Conversely they might try to use the accounts they open to store money obtained illegally or even use the synthetic identity to hide from authorities.
Why synthetic identity fraud is difficult to detect
Criminals use various techniques to create these hybrid identities. They may take a valid SIN and pair it with other personal information that is made up, such as name and address. This is known as identity compilation.
Another tactic is to steal multiple identifiers of a real person but modify them slightly. This version is called identity manipulation.
Crime networks typically take months or years to nurture a synthetic identity, such that each account or transaction helps validate the next move and build a credit history. Synthetic identities often look like low-risk borrowers to banks and other lenders—the kind they seek out. And their automated fraud detection systems can sometimes mistake the identity for a real, new customer.
Part of why synthetic fraud cases slip through the financial industry’s security protocols is because there is no victim at first; the “person” is a compilation. Sooner or later, though, the fraud can compromise real people’s financial status.
Who does synthetic identity fraud impact?
Your personal information may be compromised through a hack or breach of a corporate or government database. Criminals may buy it off the dark web, mine and combine information already publicly available, or tease it out of you in a scam.
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Synthetic fraud artists are known to target people with limited or inactive credit histories such as children, seniors, and even deceased people. Such victims are less likely to check their credit reports, allowing the fraud the required time to unfold.
How to reduce your risk
Many of the same steps that help protect you from other forms of fraud will reduce the risk of synthetic identity fraud too:
Safeguard your personal information, especially permanent identifiers such as SIN and birth date. Don’t post your birth date on social media, for example. And when you do disclose your SIN (like when completing your income tax return), make sure you are accessing a legitimate and secure website that begins with https through a private wifi or wireless network.
Be wary of unsolicited emails, texts or calls from unknown sources. These are often attempts at phishing, where the scammers offer some kind of reward or benefit for disclosing personal information. Check the URLs of websites before you click on them and the domain name of an email before you respond.
Monitor your account statements and credit reports frequently. Notify your bank or credit card issuer—and potentially police and the Canadian Anti-Fraud Centre—if you see anything fishy.
Use digital security software that can resist hacking attempts and secure your passwords.
For even greater protection, use Equifax Complete Protection. This digital subscription service offers a full suite of capabilities to help reduce the risk of fraud and identity theft, including password manager, social media monitoring, data encryption with a VPN, credit monitoring, parental controls, device protection, and identity restoration in case of identity theft—all for as little as $34.95 per month.
Businesses bear the brunt of the fallout from this kind of fraud. U.S. data indicates synthetic identity fraud now accounts for one-fifth of all credit losses. However, individuals can be victimized too, such as by having their SIN linked to a fake identity. That negative association can follow them for years.
Financial institutions are learning to spot synthetic frauds not so much by what is in their financial activity history, but by what is not. They look for “digital dust,” the irregular charges or money moves that commonly pop up in real persons’ credit profiles.
Last fall Toronto Police concluded a three-year investigation into a family operating a synthetic fraud scheme out of their residence, causing cumulative losses to financial institutions of $3.9 million. Sixteen suspects were arrested and 100 charges laid.
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Michael is a financial writer and editor in Duncan, B.C. He’s a former managing editor of Canadian Business and editorial director of Canada Wide Media. He also writes for The Globe and Mail and BCBusiness.
