What Is Identity Theft? It’s a crime that can unravel your financial life in record time.
At the most basic level, identify theft is when an assailant somehow accesses your personal information such as your credit card number or social security number, to commit fraud. This can lead to the creation of false credentials, the opening of fraudulent new accounts in different names, or the misuse of existing accounts.
In the United States, identity theft is considered an epidemic and is a serious crime. According to the Identity Theft Resource Center, nearly $15 billion were taken from identity theft victims in 2017. In 2018 alone, 450 million records containing personal data were exposed through data breaches.
But it’s not all doom and gloom. Consumers can take some steps to avoid this fate. So, how do you spot a threat? We’re about to break it down for you.
HOW IDENTITY THEFT HAPPENS
The number of ways that identity theft can happen is endless. Hackers may gain access to your information from a data security breach. Or, you could inadvertently reveal more than you mean to on social media. Information hackers are looking for includes:
• Social Security number
• Full name, address, and birth date
• Credit card or bank account numbers
• Car insurance or medical insurance account numbers
• Details that could offer insight into account-recovery answers, such as your mother’s maiden name
Having this information in hand makes it easy for criminals to impersonate you, max out your credit cards, rent an apartment, or run up all sorts of debt in your name. Additionally, bad guys can still access the Social Security number of the dead, causing problems for the estate.
TYPES OF IDENTITY THEFT
The stealing credit card numbers or money from a bank account is the most well-known scenario that pops into people’s minds when they think about identity theft. But you can take steps to protect yourself. For example, set up account alerts, scan your credit card and bank statements, and be vigilant regarding any charges you don’t recognize.
It’s imperative to know how thieves are stealing your information. We’ve outlined a few ways below:
• Shoulder surfing – happens when thieves peek over your shoulder as you type sensitive information into a computer, phone, or ATM.
• Dumpster diving — when a criminal rummages through your garbage looking for paperwork that will give them a glimpse into your pertinent information.
• Public Wi-Fi – Public Wi-Fi typically doesn’t encrypt data, meaning that anyone with the Wi-Fi password and a small amount of hacker know-how can intercept your data.
• Phishing – Thieves may contact you from a phone number or email address tailored to look familiar and trustworthy. It’s a ruse designed to garner as much personal information from you as possible.
So, how do you spot a fake email? Well, bad spelling or grammar, an unofficial-looking email address, an urgent request for information along with an attachment or link can be a big tell.
It can be a scary prospect but a proactive strategy will aid in recovery if you become a victim. The FTC has outlined several common warning signs for identity theft:
• Unexplained withdrawals from your bank account
• Calls from debt collectors about debts you didn’t incur
• Unfamiliar accounts or charges on your credit report
• Medical bills for services you didn’t receive
• Notification that your information has been leaked in a data breach
Life happens. Finding out that you’re an identity theft victim doesn’t have to ruin your financial life. Here are some steps you can take to recover quickly:
• File a police report
• Contact the three major credit reporting bureaus—TransUnion, Equifax, and Experian—and consider creating a fraud alert on your credit report
• Consider a credit freeze, which is stronger than a fraud alert. Continue to monitor existing accounts.
• Change your password for all online accounts
HOW TO PROTECT AGAINST IDENTITY THEFT
You can’t prevent identity theft in all cases but some basic precautions can help:
• Review financial statements for unauthorized transactions
• Shred documents and mail laden with pertinent personal information
• Install firewalls and virus-detection software on all eligible devices
• Create complex passwords and change them regularly
• Review credit reports annually