What Is Identity Theft and How to Protect Yourself

Don’t Let Identity Theft Ruin Your Life

You must take identity theft seriously. The techniques criminals use to steal personal information can be shocking and expensive to repair, but you don’t have to let them ruin your life.

Be sure to monitor your bank statements for unauthorized withdrawals and credit reports for new accounts that you did not open. Tell the credit bureaus that you are a victim of identity theft and ask them to block any information that results from it.

What Is Identity Theft?

Identity theft is the act of a criminal taking your personal information, such as your name, address, date of birth, credit card and bank account numbers, or your Social Security number (SSN), and using it without your permission to buy items, open accounts, file taxes, obtain government benefits or services or commit other crimes. Identity thieves steal personally identifying information in various ways, including stealing wallets and purses; rifling through trash bins; filing change of address forms to redirect victim’s mail; purchasing discarded IDs on the black market; hacking into insurance, hospital and government databases; or simply phishing for passwords and account numbers from unsuspecting victims online.

Once criminals have your personally identifying information, they can use it in numerous ways. Credit-card fraud is the most common form of identity theft, and involves making purchases with a stolen credit card or using another person’s name to take over existing account balances. Other types of identity theft involve medical, tax and synthetic identities. Medical identity theft, for example, can result in fraudulent billing for procedures or care you never received. Tax-related identity theft, meanwhile, is when a criminal uses a victim’s SSN to file a fraudulent tax return in order to claim a refund. Synthetic identity theft is when a criminal combines real and fake information to create an entirely new identity.

Common Signs of Identity Theft

Many people are unaware that identity theft has occurred until they receive a collection call for a debt they never incurred or find themselves turned down for loans or job applications due to suspicious credit report activity. In addition, thieves may change the victim’s address to avoid receiving bills and credit card statements. They can also use malware to spy on computer activity and steal sensitive information from online shopping sites or unsecured databases. They can also rummage through mailboxes (known as dumpster diving) or physically rob wallets and purses to obtain personal information.

The most common sign of identity theft is unauthorized charges on bank and credit card statements. Other signs include a drop in your credit score as a result of fraudulent accounts, notices reflecting travel or business in jurisdictions you have no connections to and calls from debt collectors about merchandise or services you did not purchase. In cases of medical identity theft, thieves misuse the victim’s health insurance account information to obtain care or cause incorrect entries to be made in the victim’s medical records.

Other forms of identity theft include child identity theft, where thieves use the victim’s Social Security number to commit fraud; synthetic identity theft, where criminals combine real and fake information to impersonate victims; and tax-related identity theft, in which perpetrators file fraudulent returns for refunds or employment with the IRS in the victim’s name.

How It Happens

There are many ways criminals get ahold of your personal information. They may dig through a Dumpster, divert your mail, or steal your data in a data breach. Criminals can also purchase your information from illicit dark web exchanges, where personal identifiers like credit card numbers and Social Security Numbers are sold along with passwords and login credentials. You can help prevent identity theft by regularly checking your bank and credit card accounts for unauthorized charges or withdrawals, especially small-dollar amounts to begin with. You can also sign up for mobile alerts with your bank or credit card company, which can notify you of unauthorized activity.

When criminals get ahold of your PII, they can drain your account and rack up credit card charges, apply for loans and credit cards in your name, and more. They can even use your name and address to hide behind you during legal proceedings, resulting in a false criminal record.

One of the most common signs of identity theft is a sudden drop in your credit score for no apparent reason. This happens because if someone else is using your identity to take out loans and credit cards, they’ll likely miss payments. Those missed payments will appear on your credit report and lower your scores. It’s important to contact the impacted financial institutions right away and work with them to reverse any fraudulent activities and secure your accounts.

Practical Tips to Prevent Identity Theft

The impact of identity theft is widespread and often devastating. It can include unauthorized financial loss such as unplanned expenses and overdraft fees; a negative credit report that makes it difficult to get loans, mortgages, lines of credit or even jobs; emotional stress from dealing with creditors, banks, credit reporting agencies and law enforcement; and time and money spent to resolve problems caused by the crime.

Fortunately, there are steps you can take to help prevent identity theft. Start by reviewing your personal information, identifying what is at risk and taking precautionary measures. Consider locking your home or office doors and using a passcode to protect your electronic devices. Shred all documents containing personally identifiable information and use passwords and other security features on your online accounts.

Another important step is to monitor your bank and credit card statements. If you notice a suspicious transaction, contact the company immediately and report the crime. Also, consider requesting a credit freeze with all three credit reporting agencies so no one can open new accounts in your name. You may also want to ask a trusted neighbor or family member to collect your mail while you are out of town, and purchase a locking mailbox. Lastly, be cautious about giving out your Social Security number and other information over the phone or internet, and never respond to e-mails asking for personal details, such as your SS number, driver’s license number or passwords.