You get a bill in the mail from a credit card company. It’s addressed to you, has your address right and everything, but you’ve never opened a card with this company. As a bonus: the bill is for thousands of dollars that they’re saying you now owe.
And this is how you discover your identity was stolen.
What Is Identity Theft?
Broadly speaking, identity theft is when someone steals your sensitive personal and/or financial information and then uses it for their own profit and benefit. The negative impacts of identity theft are wide-ranging and depend on the information stolen and the different types committed. According to Investopedia, those include:
- Social Security identity theft – Your SSN is as handy as a skeleton key for your finances, and thieves can use it to apply for credit cards, loans, and medical or disability benefits
- Financial identity theft – The most common type, involving using stolen information for purchases of goods and services or to obtain credit
- Medical identity theft – The thief leverages your information to access free medical care or health benefits
- Synthetic identity theft – A combination of stolen and fake information to create a new identity in order to open fraudulent accounts
- Tax identity theft – Using stolen information to file fake tax returns in another’s name and collecting the refund
- Child of family identity theft – Often committed by a loved one who uses the name and SSN of a child or deceased family member to access finances, loans, etc.
- Criminal identity theft – Someone who is avoiding or hiding an arrest or conviction record by using stolen personal information to pose as someone else
What Tactics Do Identity Thieves Use?
Perpetrators of identity theft have a number of different methods of obtaining the information they need, some of which are in-person and many others of which are digital or online.
Physical Tactics
- Stealing your purse or wallet or phone to try to access your ID and credit cards
- Dumpster-diving through the trash for documents that might have personal information
- Installing skimmers or shimmers at ATMs, checkout machines, fuel pumps, etc. to steal from your cards
- Stealing your mail
- Impersonating someone considered trustworthy to manipulate you into giving them information
Digital Tactics
- Phishing your personal and financial information through email, text, phone, and website scams
- Accessing or buying information from large-scale data breaches
- Implementing malware, any malicious software that invades, damages, or disables computers and can steal your data
- Attacking with ransomware, a type of malware that encrypts a target’s data which is held hostage until the victim pays a ransom
- Taking advantage of weak passwords and account security
- Exploiting public WiFi networks to access sensitive information
Signs Your Identity Has Been Stolen
Noticing you’ve become a victim of identity theft often comes down to vigilance. The more you check and track your personal and financial accounts, the more likely it is you’ll be able to spot irregularities. Use these as red flags that your identity may have been compromised.
Credit Reports
Regularly accessing and reviewing your credit reports through Experian, TransUnion, and/or Equifax will allow you to see all the credit accounts open in your name. Accounts or activity you don’t recognize is a bad sign.
Bank Activity
Keep consistent tabs on your bank statements and transaction history. Unfamiliar withdrawals and activity should be red flags.
Getting strange mail or inexplicable bills? Or, alternatively, suddenly not getting your usual mail at all? Both of those could be signs of a problem.
Medical Statements
Double check your healthcare bills and the explanations of benefits. Ensure you recognize all the medical services that have been filed in your name.
Tax Returns and SS Statements
If your annual return is being rejected before you already filed one or if you’re receiving strange notifications from the Social Security Administration, that’s not a good sign.
How Do I Protect Myself from Identity Theft?
Identity theft is scary and a real threat for all of us, but the good news is that there are a lot of steps you can take to significantly lower your risks and protect your information:
- Freeze your credit reports – This one is especially important if you have even a sneaking suspicion that your identity might be compromised. A credit report freeze is temporary and free to place and will keep anyone from opening a new account in your name.
- Utilize fraud alerts – You have the option to place fraud alerts on both your credit reports and your banking and financial accounts. That company or bank will then flag any unusual activity and check with you before approving a new account or purchase.
- Secure your phone and online accounts – Lock your smartphone with a password or PIN or biometric login. Use two-factor authentication for extra security. Ensure you’re using unique, strong passwords that you change at regular intervals.
- Be suspicious of unusual emails, calls, or texts – If someone leaves a voicemail about how you’re “under investigation” and need to call them back immediately to avoid arrest, or you get a text about owing toll fees even though you haven’t driven through a tollbooth in months, don’t be fooled. Go with your most skeptical instincts on situations like this and ignore them.
- Dispose of sensitive documents safely – Invest in a small shredder, access shredding services at places like UPS, or keep an eye out for community shredding events to get rid of your bank statements, medical statements, credit card statements, etc.
- Don’t use public WiFi for anything sensitive – While you’re having a coffee at Starbucks is not the ideal time to check your bank balance or do some budgeting in Quicken. These are open networks that a clever scammer can use to sneak into your personal accounts.
What Tools Can I Use to Help Protect My Identity?
A number of companies offer resources and services that are designed to help you protect your identity, primarily through digital tactics. Some are available for free, but many will cost you a monthly or annual fee and need to be weighed against your budget and needs. Credit monitoring services, identity monitoring services, identity theft insurance, and using virtual private networks (VPNs) for online activity are all options.
How Do I Report Identity Theft?
If you or someone you know has been a victim of identity theft, your first step is to contact the Federal Trade Commission (FTC) either online at IdentityTheft.gov or by calling 1-877-438-4338. Then contact the three major credit bureaus – Experian, TransUnion, and Equifax – to place a credit freeze and fraud alert. Lastly, contact the fraud departments of your bank, credit cards, and any other place you may have an account.
