What are the odds of becoming a victim of identity theft? Many people think identity theft is a rare crime, but unfortunately, the chances of being a victim are relatively high. Having your identity stolen is becoming increasingly common and results in significant financial losses. As many services are digitized, the reams of data uploaded to the internet increase exposure to fraud. For instance, customers’ personal information resides in numerous servers worldwide, making it vulnerable to data misuse and credit card fraud.
When you look at the numbers, identity theft statistics aren’t promising. For instance, between 2018 and June 2020, over 11 billion records were stolen in the USA. While the number of new fraud incidents fell to 5.1 % in the 2019-2020 period from 5.7% in 2018, the losses increased by 13%. In 2019, money lost to identity fraud rose to $1.9 billion. The surge in identity fraud cases could be due to the ease of carrying out the theft and monetizing the stolen information. Most criminals will steal social security numbers and sell them cheaply on the dark web or use the credit card numbers for quick profits.
Despite the unfavorable statistics, you can minimize the chances of becoming a target by identifying warning signs and mitigating damage. Read on to understand identity theft, how to prevent it, and how to report incidences of fraud.
What Identity Theft Is and How It Happens
Identity theft is a form of impersonation, whereby someone acquires your social security number, name, or birth date and uses it for financial gain. Your identity could be used to commit fraud, drain your investments or bank accounts, access medical care, open new credit lines or pay for utility services. Some criminals can also give an incorrect name and address to authorities when arrested.
Any data breaches expose your information to malicious actors. The following events can compromise your personal information and lead to identity theft.
Losing Your Wallet
Losing your wallet makes you vulnerable to identity theft. All your identification documents and credit cards can fall into the wrong hands. You can secure your information when you lose a wallet or purse by calling the issuer to turn off your credit card or cancel it temporarily.
Someone can also hijack your mailbox or redirect your mail to a different address. With access to your mail, someone can access sensitive information sent to your mailbox and use it against you.
Using Unsecure or Public Wi-Fi
When you access your banking account through public Wi-Fi, hackers can see your transactions and defraud you. Shopping at e-commerce websites and providing your credit card number also makes you vulnerable to identity theft.
Data breaches occur when cybercriminals invade sensitive information from various databases, like the 2017 data breach at Equifax. If you notice unexpected changes in your credit reports or credit scores, double-check to ensure your information is still secure. Discrepancies in your insurance and bank statements can also provide a clue.
Phishing or spoofing
Spoofing occurs when fraudsters obtain personal data from an unsuspecting person by masking their caller ID or making contact appear legitimate. Phishing occurs when hackers use an official email to acquire SSN and banking details.
Fraudsters can also acquire information from your credit card using a skimming device. When you swipe your card in an ATM or gas pump, the device captures your credit card number. You can avoid skimming by using cards fitted with chips and set text alerts to receive a notification when someone uses your card.
Warning Signs of Identity Theft
You may be unaware that you are a victim of identity theft unless you pay attention to your credit card activity and study your financial statements. Here are some of the warning signs to check when you suspect your identity is stolen:
Discrepancies in Your Bank Report
Irregular account activity is a red flag. You should read your bank statement carefully and pay attention to unfamiliar activities like suspicious charges or unfamiliar withdrawals. If you check your account regularly, you can spot fraudulent activities and resolve them before losing a significant amount of money.
Unauthorized Charges on Your Credit Card
A common sign that you are a victim of Financial ID theft is foreign transactions on your credit card. Most fraudsters will test your credit card by making small charges, and when it goes through, they will make significant charges. If your credit card is missing, you can cancel the card and get another. However, if criminals get their hands on your SSN, they can open new credit cards using your information. When you discover credit report changes, consider a credit freeze or place a fraud alert to prevent criminals from using your SSN.
Missing or Unfamiliar Bills
If you haven’t received your usual bills, chances are someone forwarded the bills to a different access. While it may sound insignificant, a criminal will piece together the information on the bills to open accounts and defraud you or prey on your loved ones. Some thieves can purchase goods or upgrade your utility services using your account. In such instances, you will receive unfamiliar bills.
Calls from Debt Collectors
You know you are in trouble if you start receiving calls from debt collectors from unfamiliar accounts. By the time you receive calls from debtors, your identification information has been in the hands of thieves for several months. You can notify the debt collectors that you don’t own the accounts and request a credit report freeze.
How to Report Identity Theft
Identity theft can cause significant losses and requires significant time to resolve. If you realize your identity is stolen, your first step to resolve the issue is to report the theft at the Federal Trade Commission (FTC) through IdentityTheft.gov. While you can report the incident via a phone call, you must create an online account to receive an identity theft report or a recovery plan. The account will help track your progress in recovery and create documents and evidence to send to creditors. FTC collects information on cases of identity theft, but they can’t pursue criminal charges. However, they can help you dispute fraudulent charges. You can also minimize the damage by taking the following steps.
File a Claim with your identity theft insurance
If you have identity theft protection coverage, you should contact your insurance provider when you discover identity theft warning signs. Even if you don’t have insurance coverage, you could be covered by your employer’s protection plan. Therefore, you should contact the insurance company or your human resource manager for an identity resolution plan.
Notify the Companies Affected
You should contact all the companies where fraudulent transactions have occurred. In case your credit card is missing, you should inform the credit card issuer to cancel your credit card number. If you only lost a credit card, the criminals may not have access to your SSN. However, if someone is impersonating you or opening new accounts in your name, you need to take divisive measures to recover your identity. For instance, you should notify the IRS to ensure the thief doesn’t file an income return or recoup your tax benefits. Also, alert your medical insurance provider to ensure no one uses your information to obtain medical care.
File a Police Report
While a police report may not yield significant results, it creates a paper trail. That way, you can provide documentation to creditors as proof of identity theft and make resolution easier. If the perpetrator is a local, they can hunt down the criminal and press charges.
Set a Fraud Alert
Place an alert on your credit reports with the major credit bureaus. It will ensure the thieves don’t open new accounts in your name. The one-year fraud alert will notify any company that your personal information is compromised. If you need additional protection, initiate a credit freeze.
How to Prevent Identity Theft
Thieves will put your personal information to work and milk every dollar they can from them. Therefore, you need to be vigilant in safeguarding your privacy and minimize the risk of falling victim. Here are some tips to prevent impersonation.
Keep Personal Records Safe
Where do you keep your personal information? If you host various people in your house, ensure all your records are tucked away from prying eyes. That includes the papers and cards you dispose of in your trash. Shred any document with sensitive information like insurance forms, financial statements, and expired or canceled ATM and credit cards. Avoid throwing away or leaving your credit card receipts in public places. If you receive checks and bank statements through mail, consider picking them from the bank. Ensure all your mails are safe by depositing them at the post office instead of dropping them off in an insecure mailbox.
When traveling, you should only carry the necessary identification documents and keep the rest in a secure place. That way, if your wallet gets lost, your exposure will be minimal. For instance, avoid carrying your Social Security card around; instead, use other identification documents.
Avoid Providing Personal Information Online
Don’t share unnecessary information on your social media pages and never reveal sensitive information unless the website is secure. If you purchase an item from an e-commerce site, don’t provide your credit card details unless the website has up-to-date security protocols. You can also use mobile transfer services that will not reveal your information.
Check Your Records After a Data Breach
When a company with your records announces a data breach, you should be vigilant and assess your records’ impact. Follow up and identify information stolen or monitor your accounts for irregular activity. If your SSN was stolen, consider stern measures like credit freeze and canceling your credit cards.
Protect Information in Your Computer
Personal information stored in your computer makes you vulnerable to identity theft. It would be best to secure it by using a firewall and a secure browser when accessing the internet. Avoiding public Wi-Fi will also reduce exposure to hackers. You can also avoid phishing if you avoid sending personal data or downloading files from strangers without thorough background checks. Anti-virus protection can also prevent third-party access. When disposing of your computer, ensure you delete any sensitive information.
Change Passwords Regularly
Your online accounts are an easy point of entry for identity thieves. Therefore, you should come up with unique passwords and change them regularly to safeguard your data.
How to Recover From Being a Victim of Identity Theft
Recovering after identity theft is challenging and depends on your willingness and availability to put in the effort. On average, you can get back on track within six months, but you need to put in the time. You have to write correspondence, reply to emails, follow-up on credit reports, and investigative work that will stretch out for years. Your credit health will also affect your recovery time. People with a spotless credit record will have an easy time proving that the recent deviations are due to fraud.
Recovering from identity theft requires emotional resilience. Studies show that a majority of identity theft victims experience emotional distress. Most people fall into depression and become anxious when someone hijacks their identity. Even after financial recovery, it takes time to find peace of mind and feel confident to resume your life.
It is crucial to take additional precautions to reduce your chances of becoming an identity theft statistic. Apart from being vigilant and setting alerts for irregular activities, it would be best if you considered finding an identity protection plan. When you have protection, the thieves will have to work extra hard to impersonate you. For instance, identity protection companies monitor your credit reports 24/7 and notify you immediately in case of irregular activity. Besides, you will have numerous resources to help you recover from the theft in case of identity fraud. For instance, after the data breach at Equifax, all the affected people were entitled to receive identity restoration services. Even those who didn’t file a claim received a recovery plan and the settlement pay-outs determined by the court.