Fundtrace logo

Frankenstein Fraud – The Fastest Growing Synthetic Identity Scam In The Current Times

Everyone wants to believe that the internet is a safe place, but it is always recommended to do a reality check and watch out for online scams that are increasing now more than ever. With different methodologies of fraud facilitated by cybercriminals on the internet in the form of phishing emails, social media, and fake tech support phone calls, con artists are stealing millions daily. The purpose is just to steal, and it can range from credit card theft to identity theft, from data breach to dating scams, and from denial of service to ransomware. The list is never-ending as we as humans are perhaps the easiest target for malicious scammers as they can reach us faster than ever in today’s world. They can get into your private and professional lives without you having a slight idea.

Hence, this article discusses one of the fastest-growing financial crimes in the United States; Frankenstein Fraud, commonly known as Synthetic Identity Fraud. This scam involves piecing together a fake identity using accurate information from several victims, such as addresses and Social Security numbers. These scammers then develop credit for this fake identity and spend it all with no plans of ever repaying it. Since there is no single concise victim, it is easier for the thieves to go undetected for more extended periods. Recently, this method has become so popular among identity thieves that the Federal Trade Commission reported making up 80-85% of all identity theft in 2017. Despite the rising number of occurrences, many people are still unaware of this new threat.

If this seems to have caught your attention and you want to learn more about this ever-growing scam and how to avoid falling victim to it, then continue reading! You can thank us later.

The Evolution Of Online Scams - What Are They?

Scamming is something that is all around us. Although, the online scam hasn’t been around forever. Some sources say it started sometime around 1995, and some say it originated even before that. Five years later, in 2000, phishing came in the form of what is known as Love Bug Struck. Twenty years later, phishing became more popular than ever in stealing innocent people’s data. However, whatever the date may be, these scams were not commonly known by everyday people like us until nearly ten years later, in the 21st century.

street traffic

Online scam is closely aligned with trends. The ‘newer’ the something, the more likely scams would occur. Perhaps, it is because of the pace of adaptation. Maybe they exist due to the growing power of digitalization. As the real world approached more towards the digital world in the coronavirus pandemic, self-seeker hackers found a chance to conduct fraudulent activities like these. When the internet tried to be our lifeline in these difficult times, some highly fake people were quick enough to take advantage, perhaps because pandemics limited the ability to meet in person. It struck people in the form of money transfers, dating, and charity scams, all coming under online scams.

Ultimately, as technology advances more, so will online scams. They are a blend of speed, access, awareness, and actions. The world is likely to experience new forms of internet scams, considering that scammers can communicate with one another and victimize for free means. The fight against them is an ongoing battle and is not something that is being faced by our generation only. For as long as the money came into existence, so did scams. However, the ease with which online scams occur is why they persist even after 25 years. Also, history speaks for itself and shows that although the delivery methods have evolved over the years, the tactics employed by scammers have been consistent. People should have learned to avoid falling into such scams by not opening attachments, clicking links, and surrendering login credentials. Yet, it is still popular and costs millions to victims every day, one of the perfect examples being the Frankenstein Fraud.

The Events That Led To The Frankenstein Fraud

Frankenstein Fraud is known to have caught the eye of law enforcement and led to a nationwide investigation in the United States consisting of more than 11 individuals, particularly scammers, who stole more than 1 million. It all began with the development of synthetic identities involving stolen Social Security numbers combined with the names, addresses, and dates of birth of other actual people. These Social Security numbers were picked because they didn’t have a credit history or were unlikely to be carefully checked, such as those for youngsters, recent immigrants, the old, the incarcerated, and even the deceased.

folders and files

The con artists then took steps to make the fake identities appear real. They allegedly applied for phone numbers, set up email, reward card, and library card accounts, and entered the identities into public databases used by financial institutions to verify identities. In addition to this, Adam D. Arena, 44, allegedly aided the plan by forming shell firms that reported the fraudulent identities to credit reporting agencies as if they were actual customers with a long credit history. It basically increased the fake identities’ credit ratings even more.

Why did this scam even happen in the first place? The main goal was to secure loans and credit cards from financial organizations such as USAA Bank, Navy Federal Credit Union, First National Bank of Omaha, and Suffolk Federal Credit Union using the synthetic identities. These identities’ accounts were then maxed out and never returned. Insane!

How Massive Was The Scam?

Fortunately, the conduct was finally discovered by the Financial Investigations and Money Laundering Bureau of the New York Suffolk County District Attorney’s Office and the Suffolk County Police Department’s Financial Crimes Unit. They started looking into unusual activity at multiple Long Island banks and credit unions. They discovered that 13 people created and exploited more than 20 fake identities to get loans and credit cards from 19 different financial institutions, stealing more than $1 million. Suffolk County District Attorney, Timothy D. Sini, said in a press release that announced the charges against the 13 alleged conspirators that this is a highly complex crime, and identifying the perpetrators could be extremely difficult. 

If you’re a victim of fraud and had lost your money, then contact us to help you get your money back!

criminal in jail

Synthetic Identity Frauds At Spike

While identity theft has been a problem for decades, the strategies used by fraudsters have evolved in recent years. Criminals used to do actual name fraud, which involved stealing a victim’s personal information and impersonating them while making substantial transactions in their name. Credit lenders and banks eventually caught on to what was happening and implemented security measures to reduce the risk of this happening again. As a result, the perpetrators switched to a more difficult-to-detect strategy called synthetic identity theft.

The practice of creating a false identity is not new. It’s a decades-old scam trend that used to be carried out in person before transferring to the Internet. Although, in the twenty-first century, it has expanded significantly. According to an Aite Group study sponsored by consumer credit reporting agency TransUnion, synthetic identity fraud for unsecured U.S. credit products totaled $1.8 billion in 2020 and is expected to climb to $2.42 billion in 2023. Looking back into the years, in 2016, it cost US lenders $6 billion and was responsible for 20% of all credit losses. 

man getting 1 dollar bill from his wallet

Why exactly is the ‘Frankenstein Fraud’ on the rise? Perhaps one factor could be the increased amount of personally identifiable information (PII) exposed due to significant data breaches over the last decade. According to the Federal Reserve, the volume of PII data exposed in breaches surged by 126 percent between 2017 and 2018, totaling over 446 million records. Apart from that, the Social Security Administration (SSA) changes may have unintentionally made it easier for scammers to create a fake identity using someone’s Social Security number. The Social Security Administration (SSA) began assigning Social Security numbers at random in June 2011 to protect them and expand the pool of accessible nine-digit numbers. Lastly, one of the key reasons is the launch of chip-enabled cards (EMV) in 2015. Because these new cards made point-of-purchase fraud more complicated, many fraudsters had to adapt and develop a new way to make money. They might simply get over this new security safeguard by siphoning off the credit of counterfeit identities they constructed.

What Makes It So Difficult To Detect This Scam?

The amount of time it takes to be utilized and fostered is one characteristic of synthetic identity that makes it difficult to detect. Fraudsters will create an identity and maintain it for months or years to increase their credit limit. According to a Federal Reserve study, 70% of “suspected synthetic identity accounts are momentarily reflecting conventional consumer payment patterns, making them more difficult to identify.”

Hence, unfortunately, most synthetic identity fraud scams go undiscovered until they reach the bust-out stage. Also, when a financial institution’s collections team cannot locate a person who can pay the bill. In fact, achieving what they desired initially may motivate them to repeat the scheme or use financial institution policies used to their advantage. Also, the Federal Reserve discovered that synthetic identity fraudsters might be using Windows in the U.S. Fair Credit Reporting Act review period to flood the financial institution with an overwhelming number of claims, reducing the chances that the institution will complete its research in the specified time. How Clever!?


Funds Trace To Your Aid 24/7

Scams like these are the most profound betrayals and breaches of trust since they involve more than just money. As a result, many victims face social issues such as damage to reputation, vulnerability, isolation, and exposure. Furthermore, fraud harms a victim’s mental health, leading to anxiety, depression, and suicide. Of course, no one expects to be duped; it isn’t your fault, and we at Funds Trace want to assist you in getting back on your feet.

If you or someone you know is a Frankenstein Scam victim, we ask that you act fast by contacting us because the time frame is essential, and every day counts. We believe that it is never, absolutely never too late to save yourself from the blackmailing of your scammers. Thus, we encourage everyone to come to us if they have been scammed or are even getting scammed. Our agency uses an extensive and integrative recovery process where time is our utmost priority. Delaying someone’s case is something we have never supported and so taking quick and persistent action is what we are best at. We make sure you get the most professional recovery service available, considering the laws and regulations. 

circle graph

We have wealth recovery professionals who know how to get your money back in the shortest time frame. We are experts in the Funds Trace process and will retrieve all funds stolen from you. So contact us with details of transactions and dealings with scammers. We will help you recover your funds and your life back!

Put an End To Online Scams - Seek Help From Us Today!

Nowadays, everyone uses the internet for both business and pleasure. At the same time, cybercriminals are constantly thinking of new ways to scam people on the web as the world evolves. As Synthetic Identity frauds are rising, watch out for red flags and take action to protect yourself. For example, by simply being cautious and watchful, one can ensure that any damage is mitigated. Apart from that, monitoring credit reports and raising awareness are two of the most effective strategies to curb the growth of synthetic identity theft. People are encouraged not to reject incidents of mistaken identity. Receiving credit card bills from someone else regularly could indicate that the address is being used as part of a fraudster’s false identity. It’s safer to be safe and contact the mail’s sender to tell them of the problem.

Hence, if you fall for an online scam or in particular, the Frankenstein Fraud, don’t be embarrassed. Share it with your loved ones because it would make you feel better and guide you on what action to take. In fact, they may tell you about us where you can report after gathering all the relevant information. Stay safe by learning how to counter scams!

Table of Contents

Share this article
Leave a comment