With card fraud topping the identity theft list in 2019 and bank account takeovers being on the rise, identity theft is an increasing issue that can lead to a lot of personal and financial damage, especially if you don't act quickly. Card theft occurs when someone physically or virtually gets your card information, and they can then make unauthorized purchases. On the other hand, a bank account takeover occurs once someone has gathered enough personal information to access your bank account, perform a variety of transactions and make account changes. Take a look at how both of these issues can happen, how to recognize them and what you should do to minimize your risk.
What Identity Theft Means
It's helpful to understand that identity theft differs from someone simply having personal or financial information about you. The National Science Foundation mentions that identity theft doesn't actually occur until the person who has your information – such as a Social Security number, card number or account number – proceeds to use it to act fraudulently. So, a person might find a card you dropped or locate your bank account information on the dark web. However, it's when they take your account number or credit card and use it to conduct transactions or commit other crimes that identity theft occurs.
In any case, the theft of your information can lead to many headaches with financial and legal repercussions. Identity thieves could get you in trouble with law enforcement, destroy your credit, take your money, change your address, access your medical records, take over your social media accounts and cause a variety of other problems. Therefore, it's key to understand different acts leading to identity theft so you can recognize them and act quickly with a personal recovery plan to get your life and finances back on track.
Understanding Card Theft
Card theft occurs when someone either obtains your physical debit or credit card or somehow gets the card number, security code and other details without physically possessing the card. Once the person has the card or the card's information, they can commit identity theft where they start to run up charges in your name either in person or online. This can lead to bills in the mail that you didn't expect as well as damage to your credit and potential fees. If the person stole your debit card, you can especially face difficulties if the person starts withdrawing cash from your bank account or even succeeds in taking over the account.
The Federal Trade Commission (FTC) explains that this kind of problem can happen to anybody who uses a card to shop or pay bills and that thieves can get the card through various ways. For example, any person who loses their wallet or drops the card somewhere could have a thief take it, while an online shopper might have their card information stolen when a hacker gains access to customer data. You can also face card theft if you use a gas pump with a skimming device that takes card numbers. Further, thieves might impersonate legitimate businesses online or over the phone and get your card information if you're unaware.
Exploring Bank Account Takeovers
A bank account takeover, on the other hand, occurs when the thief has gotten enough information to gain access to your bank account. Once the identity thief has gotten into your account, they can perform transactions where they transfer your money to another bank account, or they spend it on expensive items. The takeover usually involves the person also changing your account information so that you have difficulty getting your account back. For example, they might change the login details and address on the account.
This problem can start out with the thief stealing your debit card or a check, or they might find your account information on bank statements you throw out. However, NuData Security warns that someone simply getting your online banking login credentials can be enough to do a lot of damage, and this can happen through hacking, keyloggers or social engineering where someone watches you log in without your knowledge.
Identity thieves seeking to take over bank accounts like to target people who use online banking. However, thieves often also target elderly individuals by calling them, claiming to be a utility company or government agency and then asking for their bank account information for some charge they need to pay. People who throw away bank statements or who have malware installed on their computer can also face this issue.
Recognizing Card Theft and Account Takeover
The FTC mentions that you'll often see unauthorized charges on your bank or card statement or strange balances or problematic accounts listed on your credit report. You might see suspicious withdrawals from your debit card or bank account, or your money may appear moved to different locations. Your credit or debit card might start getting declined at checkout, and you might receive messages from your bank or card company about your card being maxed out or your bank account being overdrawn. Fees can also start to appear on your statements.
When physical card or check theft happens, you could notice the card or checkbook has gone missing. If the thief changes the login credentials for your online banking account, you might no longer be able to log in. You might also experience banking and card statements no longer arriving at your house if the thief changes the address.
Some signs someone may be trying to steal your card include being asked for your card number by strangers on the phone and finding an unusual device on a gas pump's card reader. The Federal Bureau of Investigation also warns about fake shopping websites that could steal your card or banking information and suggests verifying the vendor and their security before proceeding. Another warning sign of card theft or an account takeover attempt involves getting contacted about a data breach or security issue from your bank or card company or hearing about such a breach on the news.
Read More: Identity Theft: Most Common Types & Warning Signs
Avoiding Identity Theft Issues
To help avoid card theft or a bank account takeover as well as the damage from identity theft, try some of these tips:
- Avoid carrying unnecessary cards and checks with you.
- Never give your credit card number, Social Security number or bank account number to any individual you can't verify.
- Use an identity theft monitoring service like IdentityGuard, LifeLock or IdentityIQ to monitor your credit reports for suspicious transactions and account takeover attempts, spot changes to your address and other personal information and get some professional help if you do face identity theft.
- Report any lost debit or credit card immediately to minimize use.
- Contact your creditor or bank if you spot any suspicious activity.
- Use a malware scanner on your computer to monitor for viruses that could help identity thieves get your login information.
- Monitor your Experian, TransUnion and Equifax credit reports regularly on your own or with a service like LifeLock, IdentityIQ or IdentityGuard.
- Consider using electronic statements to minimize mail theft and shred any sensitive mail before disposal.
- Use a strong password and secondary authentication option for online banking sites.
- Only shop at trusted online retailers.
- Beware of skimming devices, people watching over your shoulder and phishing schemes.
- NuData Security: What Is an Account Takeover Attack? ATO Fraud Detection and Prevention
- Federal Trade Commission: Protecting Against Credit Card Fraud
- National Science Foundation: What Is Identity (ID) Theft?
- Federal Trade Commission: Warning Signs of Identity Theft
- Federal Bureau of Investigation: Credit Card Fraud
- Identity Guard: Home
- LifeLock: Get LifeLock Identity Theft Protection
- IdentityIQ: Home
- KeyBank: How to Prevent Account Takeover Fraud
- Norton: 9 Warning Signs of Identity Theft and What To Look for
- Insurance Information Institute: Facts + Statistics: Identity Theft and Cybercrime
- Experian. “The Many Different Forms of Identity Theft.” Accessed Oct. 1, 2020.
- Equifax. “Types of Identity Theft.” Accessed Oct. 1, 2020.
- Experian. “What Is Social Security Fraud?” Accessed Oct. 1, 2020.
- FBI. “FBI Sees Spike in Fraudulent Unemployment Insurance Claims Filed Using Stolen Identities.” Accessed Oct. 1, 2020.
- USA.gov. “Identity Theft.” Accessed Oct. 1, 2020.
- FTC. "Identity Theft Recovery Steps." Accessed Oct. 1, 2020.
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.