What's 'synthetic identity' fraud? Houston police putting auto dealers on notice over rising crime

HOUSTON, Texas (KTRK) -- Houston Police Department is warning auto dealerships about a special kind of fraud after they say a woman was caught using a "synthetic identity" to try to buy a car.

According to Equifax, synthetic identity fraud is a type of financial fraud that combines real and fake information to create a brand-new identity not linked to a real person.

On Nov. 6, police said Brook Rutledge, 34, tried to use a Texas driver's license with her picture on it to buy a $36,000 car. An "e" was added to the end of Brook, and the date of birth was slightly off. She also had a credit privacy number, or CPN, police say, that she tried to use to gain credit. She was arrested and charged with felony tampering with a government record.

According to HPD Sgt. Darren Schlosser, the initial investigation found that she was using a fully synthetic identity, which is a rare but concerning find for his Vehicle Fraud Unit.

"Fully synthetic is very concerning because of the dollar amount that they can obtain over time," Schlosser, whose unit is assigned to HPD's Auto Theft Division, said.

Schlosser said fraudsters use synthetic identities to deceive credit bureaus into lending credit. While human victims might catch fraud by getting a bank notification, financial institutions often do not notice it until too late.

"They continue on until they max out that credit amount, which can be a large amount of money," he said.

HPD sends alerts to auto dealerships to warn of such trends, and Rutledge's case went out within hours of her arrest, Schlosser said.

"Every single car deal, I have to be meticulous about. We almost have to be private detectives," Alan Helfman of River Oaks Chrysler, Jeep, Dodge, and Ram said. "You have to be one step ahead."

Helfman adds that potential buyers are more scrutinized, which is a byproduct of potential fraudsters.

Schlosser said the consumer eventually carries the burden in the form of higher prices and rates, and like most crime trends, he expects synthetic identity fraud to gain steam.

"That's why it's very important to work with the industry to stop it in its tracks," Schlosser said.

Rutledge is out of jail on a personal bond. She is listed as indigent in court records. Her court-appointed attorney, Richard Oliver, told ABC13 his client "is presumed to be innocent."

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