Synthetic Identity Fraud

Synthetic identity fraud occurs when a fraudster blends real data such as a legitimate Social Security number with fabricated information like a fake name or address to create a fictitious identity. These synthetic identities are then used to apply for auto loans, often with the intent to default after obtaining the vehicle.

Dealers should work closely with lenders and use identity verification tools to flag inconsistencies in applications. Warning signs include credit files with no depth of history, recently established addresses, and mismatches between application data and third-party verification sources.