Synthetic Identity Fraud

Synthetic identity fraud involves creating a fake identity by combining real and fictitious information (for example, using a real SIN with a false name and birthdate) to obtain credit or make purchases. In auto sales, a fraudster might secure a car loan or buy a vehicle under this synthetic persona, which can be hard to detect because credit bureaus may have a file on the fabricated identity. Canadian dealerships combat this by using robust identity verification and credit application checks, looking for inconsistencies (like odd credit histories or mismatched IDs). Since synthetic fraud doesn’t have a direct victim reporting identity theft – the “person” is fictitious – the dealership and lender often bear the loss. Vigilance and use of fraud detection tools are key to catching these schemes before a vehicle is delivered.