What Is Identity Theft?
It is everyone’s worst nightmare - you apply for social security benefits, only to be told they have already been claimed. Did someone impersonate you to get your money? Yes - and this crime is known as identity (ID) theft.
To put it simply, this scam occurs when someone gathers all your private information to build your profile and apply for services under your name. They can open bank accounts, credit card accounts, and much more.
However, when it’s time to pay, of course, the bills are going to you and the criminals often get away with it! This is because their actual names are unconnected to these purchases or misdeeds. That’s so unfair, right?
If this happens to you, don’t feel bad. Many people have been taken advantage of by fraudsters too. In 2019, according to the Federal Trade Commission’s Consumer Sentinel Network Data Book, more than 167,000 people reported fraudulent credit card accounts were opened with their personal information.
So what exactly constitutes identity theft? How do criminals get hold of information about us?
How is ID theft committed?
You have to know the system to beat the system. So to avoid becoming a victim of identity theft, we have to know what ID theft is and how it works. We can start by finding out how it’s committed.
So how do fraudsters discover information about us they can use for identity theft?
- Fishing for information via phishing - If you suddenly receive an email stating you’ve won a contest you never entered, then be warned. This may be a phishing email, especially if the message asks you to divulge your personal details to claim a prize.
- Sending spoofing messages - Spoofing means impersonating a reputable company or personality to gain access to your personal data. If your bank is asking you to update your details on a website you don’t recognize, it’s always a good idea to call them up to check if the earlier message you received is legit.
- Running through your mailbox or trash - Some criminals go through people’s trash to look for bank statements or discarded bills. This is why it’s always advisable to shred any private letters or consider receiving your statements electronically.
- Looking for pieces of information available online - Do you like to blog? If so, then maybe it’s not a good idea to overshare. If you have public blogs or social media accounts, once you share personal details in public such as the names of family members or your address, then these pieces of information can be used to build your fake profile.
- Data breaches - Every time a data breach at a big company occurs, vital information about their employees or customers is sold in the black market. Make it a habit to visit websites like Have I Been Pwned to check if your details have been compromised after a data breach scandal. Better yet, use a cybersecurity app to alert you when your personal information has been made available online.
What information do criminals need to steal your identity?
Criminals who want to steal your identity need to know any useful data they can find about you. They can then use this to open bank and credit card accounts. These are pieces of information such as:
- Full name
- Place of birth
- Email address
- Home address
- Parents’ names
- Details of your other financial accounts
- Social Security number
- Health insurance account number
What are the most common types of identity theft?
Though there are many different types of ID theft in the US, here are the most common:
- Tax-related ID theft - Tax ID theft occurs when someone files a tax return under your name so they can claim refunds. A taxpayer will find out they've been a victim of this when they receive a letter from the tax office, saying their tax return has already been submitted.
- Medical ID theft - This happens when a criminal uses someone else’s name or health insurance to see a doctor, get prescription medication, or file claims with an insurance provider. This can be detrimental to any person looking to seek future treatment as their credit report and medical records will be incorrect.
- Child ID theft - Fraudsters take advantage of how the majority of children don't need to claim benefits or open credit card accounts just yet. Parents of these unfortunate kids find out they’ve become victims of scams when they suddenly receive bills or notices from different government agencies about their child filing claims.
- Social Security theft - Sadly, unlike a credit card which can be closed if compromised, one's Social Security number is permanent. This is why we have to be more careful with it. Fraudsters steal this information to take advantage of another person’s benefits.
How do you avoid being a victim of ID theft?
You can never be too careful when it comes to identity theft. The key is knowledge, especially since identity theft criminals are getting increasingly creative with their wicked ways.
And you can’t do it alone. You should acknowledge you need someone or some IT support to help you out. This is why cybersecurity apps now come with a feature capable of scanning the internet if any of your personal information has been stolen. Be sure to get one like Clario to stay alert about the latest identity theft threats!