Equifax: Synthetic Identity Fraud Doubled in Canada

Ontario residents face a rising threat from criminals who stitch real Social Insurance Numbers together with invented names and addresses to create fake people. These synthetic identities, often called digital Frankensteins, doubled as a proportion of all fraudulent applications in Canada between 2022 and 2024, according to data from Equifax.

The fraud differs from traditional identity theft because the victim is a person who does not exist. Dave Lewis, global advisory chief information security officer at 1Password, explained that in classic theft, the victim complains when their account is hijacked. With a synthetic identity, the real person whose SIN was borrowed may not discover the fraud for years. Criminals nurture these fake profiles for months or years, posing as model clients to raise credit limits before maxing out the accounts and disappearing.

Detecting this fraud is difficult because the fake profiles generate new credit reports. Carl Davies, head of fraud and identity at Equifax Canada, noted that the real SIN owner’s existing credit report typically remains unaffected. Victims often only find out when applying for credit and encountering errors. SINs belonging to children, newcomers, and deceased persons are particularly attractive targets because their files are often inactive.

AI tools have industrialized the process. Lewis said AI can clean messy stolen data and fill gaps with convincing details in an afternoon. Criminals also use AI to generate deepfake videos and convincing digital footprints to pass bank verification steps. The synthetic identity ends up with a voice, a face, and a past.

Fraudsters use these identities for credit card bust outs, mule accounts for money laundering, and device financing. They also apply for government benefits and open seller accounts on online marketplaces to collect payments.

To protect themselves, Lewis advises treating the SIN like a bank password and only sharing it with employers, banks, and the CRA. He recommends freezing credit, a service available in Ontario since July 1. Individuals should also check both credit bureaus once a year for indirect footprints like unknown addresses or inquiries. Parents should pull reports for their children, as there should be nothing on those files. Claiming government accounts early and reporting suspicious activity to the Canadian Anti-Fraud Centre are also key steps.

A replacement SIN is possible in proven cases, but the old one stays live in the system. Monitoring does not end once a fraud is discovered, Lewis said.