With the Federal Trade Commission reporting over 650,000 cases of identity theft in 2019 alone, it's become crucial to understand identity theft and the risks it presents to your reputation and finances. Ranging from having a check or credit card stolen to experiencing someone taking over your whole identity to commit a crime, identity theft can come in many forms and often happens without the victim's knowledge. The good news is that educating yourself on the many types of identity theft and common warning signs can help you prevent someone from stealing your personal information or at least help you out during the recovery process. Keep reading to learn all about identity theft detection and tips for avoiding becoming a victim.
Understanding Identity Theft
Identity theft occurs when someone has fraudulently gotten access to your personal or financial information so that they can use it for their own financial benefit. This information could include your Social Security number, bank account or credit card number, driver's license number or other items. In some cases, you might unknowingly provide your financial account information to an identity thief who claims to be a legitimate business such as a utility company, retailer or even a government office. In other cases, the thief might sort through your mail and garbage, hack into your gadgets, secretly spy on you in public or find your information through online data breaches.
With your private information in hand, the identity thief could commit acts such as buying items with your credit card, opening a bank account in your name or even getting involved in traffic violations and other crimes and claiming to be you. This can lead to lost money, lost time and even legal challenges to handle. The impact can hurt you in the future whether you've got a tarnished reputation from the incident or you have difficulties getting credit.
While identity theft can happen to any person, LifeLock warns there are a few groups that criminals like to target. For example, they like to target elderly people who might have more money, trust others and not be aware of current scams. On the other hand, they also target college students who might also not recognize scams and children whose parents wouldn't expect a scammer to target them.
Exploring Common Identity Theft Types
Here's a look at some of the most common types of identity theft that may affect you:
- SSN theft: An attacker can get your SSN from thrown out documents, hacked accounts and even your wallet and then use it to apply for credit cards, gain access to your bank account and even make insurance claims in your name. This number could also be provided for criminal offenses and cause legal and reputational issues.
- Card theft: Whether the thief gets your card physically or finds your information through a data breach, they can start to go on a shopping spree online or in person without your knowledge and run up your bill. This can continue until you notice it on your account or your creditor detects suspicious activity. You'll need to report the issue as soon as possible and have the card deactivated.
- Bank account takeover: If the thief gets into your bank account, they can take it over and move funds, spend the money and even change your login information. This can happen if you don't use strong passwords and haven't taken advantage of other authentication options your bank provides.
- Tax fraud: This ties into SSN theft and involves the criminal filing a tax return for you and taking your tax refund. They could also include false information on the tax return and get you in trouble with the IRS.
- Mail fraud: In some cases, the identity thief steals your mail and can use do things like fill out credit card applications, cash checks sent to you and grab personal information from your mail. In other cases, the identity thief changes your address with the post office so you don't receive your mail anymore.
- Imposter fraud: This type often involves targeting senior citizens and claiming to be a utility company, Medicare, police department or government agency like the Internal Revenue Service. A caller usually scares the victim into handing over financial or identifying information by saying that they owe a large bill, will have services cut off or have been convicted of some crime.
- Social identity theft: With this type of fraud, someone gets your login information and hacks your current social media profiles, or they might new ones using your profile image and information. They can then send messages to your contacts pretending to be you and asking for money, or they can post inappropriate content that tarnishes your reputation. They may also change your login details so that it's hard to get access again.
Read More: Definition of Credit Card Fraud & Identity Theft
Recognizing Key Identity Theft Signs
To prevent some types of identity theft, it's important to recognize scams that can help a criminal get your information. For example, if someone calls claiming to be the IRS, a creditor or law enforcement, don't provide them with any personal information or payment over the phone. The IRS would send you a formal letter if you owed money, and your utility company wouldn't call from a strange number demanding payment and would instead send you notices. If you get a suspicious call, hang up and contact the company directly to report the issue and find out if something's wrong with your account.
If identity theft has already occurred, you might notice some of these signs:
- You have trouble getting credit.
- People call you about unpaid bills.
- Law enforcement accuses you of a crime you didn't commit.
- Your credit or debit card no longer works.
- Your mail doesn't arrive normally.
- Statements show suspicious transactions.
- Utilities get shut off unexpectedly.
- Your credit report shows new accounts you didn't open.
- Your credit score drops suddenly.
- You have trouble getting medical claims approved.
- You lose access to online accounts.
Strategies for Avoiding Identity Theft
To avoid identity theft, you can be proactive and closely watch your financial information. This means checking your credit reports and financial statements regularly for missing money or unexpected charges and contacting your bank immediately if something suspicious shows up. You should also use security software on your devices, shred papers containing sensitive data, take advantage of two-factor authentication for banking websites and keep documents such as credit cards, Social Security cards and checkbooks out of others' hands. Also, consider using security alerts for your bank accounts to get notified of potential fraud quickly.
You can also consider subscribing to identity theft protection services such as the following:
- LifeLock: With four service options available, LifeLock can help monitor your credit, keep your gadgets safe and alert you if your Social Security number, name or account details appear to have been compromised. Other features include reimbursement up to $1 million for identity theft events, ID and address change monitoring and fictitious identity monitoring. The most expensive package comes can even notify you if you appear on file-sharing sites or have potentially had your bank account taken over.
- IdentityGuard: Available in three plans, IdentityGuard helps you assess your identity theft risk and monitors your information online. The plans all come with $1 million in coverage along with safe web browsing tools. The top plan monitors for most changes to your personal and financial information and even keeps an eye on your social media accounts.
- IdentityIQ: There are four offerings from IdentityIQ that range from including just basic credit and internet monitoring to expanding with family protection and fraud restoration services. All packages notify you of Social Security number theft, include lost wallet assistance, have alert systems and give you $1 million in coverage.
Taking Steps to Recover
If you're an identity theft victim, the FTC website identitytheft.gov has a helpful checklist of what you should do. These actions include contacting all financial institutions involved, filing reports with law enforcement and the FTC to try to track the criminal, repairing your credit, fixing account and card issues and using the fraud alert feature that the credit bureaus offer or even freezing your credit reports.
- Complete ID: Types of Identity Theft
- USA.gov: Identity Theft
- Experian: The Many Different Forms of Identity Theft
- Federal Trade Commission: Identity Theft
- IdentityTheft.gov: Identity Theft Recovery
- Federal Trade Commission: Consumer Sentinel Network Data Book 2019 - January 2020
- U.S. Department of Justice: What Are Identity Theft and Identity Fraud?
- LifeLock: Who Is Most at Risk for Identity Theft?
- LifeLock: Official Site
- Identity Guard: Home
- IdentityIQ: Identity Theft and Credit Protection
- 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.