Identity theft is one of the most pervasive cybercrimes, impacting millions of victims each year. With the right precautions, however, you can help protect yourself and minimize your risk. This detailed guide explains everything you need to know about identity theft and safeguarding your personal information.
What is Identity Theft and How Common is it?
Identity theft occurs when someone steals your personal information and uses it to commit fraud or other crimes. According to the Federal Trade Commission, over 1.4 million cases of identity theft were reported in 2021 alone, making it the most common type of consumer complaint.
With your information, identity thieves can easily open fake credit cards or bank accounts, take out loans, file fraudulent tax returns, and commit serious crimes while posing as you. In 2021, identity theft resulted in over $24 billion in losses.
Unfortunately, anyone can be a target. But seniors, military members, young adults, and children face a heightened risk. Thieves obtain stolen personal information in many clever ways, as we‘ll explore next.
How Identity Thieves Get Your Information
Identity thieves employ a wide variety of tactics to steal your personal data:
Data breaches – When companies that store customer data suffer hacks, your information could be compromised. Major breaches exposing social security numbers, birth dates, addresses, and other sensitive details have impacted billions of people.
Phishing – Deceptive emails or text messages pretend to be from a trusted source and trick you into revealing passwords, credit card numbers, or other information. Phishing results in thousands of victims every day.
Skimming – Thieves install skimmers on ATMs, gas pumps, and other payment terminals to steal your debit or credit card information when you swipe your card. Watch out for tampering.
Phone scams – Callers impersonate banks, tech support, or government agencies to convince you to confirm personal details or make payments to steal from you.
Hacking – Criminals hack into your email, social media, and financial accounts by guessing weak passwords or using malware to steal credentials and information.
Dumpster diving – Thieves rummage through your trash and recycling looking for discarded documents with identifying info and account numbers. Always shred before throwing out.
Physical theft – Lost or stolen wallets and purses put your ID, payment cards, and other documents into the wrong hands. Keep sensitive items secure.
Fake websites – Scammers create convincing but fraudulent websites to trick you into entering your data, which they then use to commit identity theft. Double check the URL.
Child identity theft – Childrens‘ clean credit histories make them targets. Thieves trade kids‘ information on the dark web and use it to commit years of unseen fraud.
Synthetic identity theft – Criminals combine real and fake info to fabricate new identities and open accounts. This is harder to detect than traditional identity theft.
Shocking Impacts of Identity Theft
If you fall victim to identity theft, the consequences can be devastating and long lasting:
Financial losses – Thieves may steal money from your bank accounts, rack up charges on fraudulently opened credit cards, take out loans in your name, and damage your credit standing for years. Victims lose billions to identity thieves every year.
Criminal implications – Because thieves use your identity while committing crimes, you may be linked or accused of crimes you didn‘t commit. That can lead to wrongful arrest, prosecution, or even jail time.
Medical identity theft – Criminals use your information to obtain medical services and prescription drugs leading to inaccuracies in your medical records that could impact your care. This is a fast-growing form of identity theft.
Damaged credit – Identity theft can destroy your credit score. Missed payments by thieves and fraudulent accounts appear on your report. A bad credit score means you pay higher interest rates and get denied for loans and credit cards.
Lost time – Victims spend an average of 15-30 hours communicating with authorities, banks, credit bureaus, and companies to report identity theft and restore accounts. That‘s days of lost time, on average.
Emotional impact – ID theft often causes significant emotional stress as victims deal with the disruptions and damages caused by thieves impersonating them and ruining their finances and reputation.
Simple Tips to Avoid Identity Theft
While you can never completely prevent identity theft, there are simple precautions you can take to minimize your risk:
Monitor your credit reports – Check your credit reports regularly and inspect them for any accounts or charges you don‘t recognize. Monitoring helps you identify issues early.
Monitor your bank accounts – Frequently review bank account statements and credit card statements for any unfamiliar transactions that could indicate fraud.
Change passwords frequently – Use strong, unique passwords for every account and change them every 60-90 days to make it harder for thieves to hack in.
Shred sensitive documents – Shred receipts, bank statements, preapproved credit card offers, and other records before throwing them out so identity thieves can‘t grab them from your trash.
Protect your social security number – Don‘t carry your social security card in your wallet. Only provide your SSN when absolutely necessary, and ask how it will be protected.
Watch out for sketchy emails – Delete any suspicious emails asking you to update or verify personal information. These could be phishing scams seeking your details.
Use online banking alerts – Set up text or email alerts from your bank for certain account activity so you can identify fraudulent charges right away.
Freeze your credit – Placing a credit freeze restricts access to your credit report, making it harder for thieves to open fraudulent accounts. Temporarily lift it when applying for credit.
Top Identity Theft Protection Services
For additional monitoring and protection, you may want to sign up for an identity theft protection service. Here are a few top options to consider:
LifeLock – LifeLock offers advanced identity theft monitoring across your credit, bank accounts, credit cards, social security number, and more. If your identity is compromised, you get up to $1 million in protection and agents help fully restore it. Plans start at $8.99 per month.
IDShield – IDShield has customizable plans tailored to individuals, families, seniors, and minors. Features include credit monitoring across all three bureaus, dark web monitoring, medical and financial identity protection, and up to $1 million in insurance. Pricing starts at $6.95 per month.
IdentityForce – IdentityForce UltraSecure+Credit offers proactive monitoring across your credit, finances, data and privacy. It provides real time alerts, up to $1 million in identity theft insurance, and monitoring of payday loan applications. Plans start at $17.99 per month.
Identity Guard – Identity Guard provides daily monitoring of your credit, bank accounts, credit cards, social security number, and more. It also offers up to $1 million in reimbursement for stolen funds and identity restoration services. Pricing starts at $6.67 per month.
IdentityIQ – IdentityIQ regularly monitors your credit, bank accounts, credit cards, and also scans criminal websites for your information. Plans include expense reimbursement and insurance up to $1 million as well as USPS address monitoring. Pricing starts at $11.95 per month.
Aura – Aura’slowest tier plan includes $1 million identity theft insurance, dark web monitoring, bank account takeover alerts, and AI-driven alerts. Higher-tier plans add credit monitoring, credit reports, and credit scores. Pricing ranges from$7.50 to $29.99per month.
Is Identity Theft Protection Worth It?
Identity theft protection services come with a monthly or yearly cost, so consider the value:
Earlier detection – Protection services regularly monitor your accounts and credit for fraudulent activity, enabling earlier detection before major damages occur.
Alert monitoring – You receive alerts about potential fraud via email, text message, or mobile app so you can take action quickly.
Expert assistance – If you do become an identity theft victim, protection services save you time by helping you through all the steps of reporting and recovering your identity.
Insurance – Many plans include insurance that covers certain costs if you experience identity theft even with protections in place. This guarantees you won‘t be out of pocket.
Peace of mind – Identity theft protection provides security in knowing your accounts and identity are being monitored 24/7 by professionals.
Evaluate your specific risks and needs to determine if the extra security of identity theft protection is right for you. Understand exactly what is covered under any service you consider.
Recognizing and Recovering from Identity Theft
If you suspect you may be a victim, look for these warning signs of identity theft:
- Bills or notices for accounts you didn‘t open
- Denials for credit, loans, or jobs for unexplained reasons
- Medical bills for services you didn‘t utilize
- IRS notices about tax returns you didn‘t file
- Unauthorized transactions or charges on your statements
- Accounts or passwords you can no longer access
If you confirm you are an identity theft victim, take these steps to start recovering:
Call banks, credit card companies, and other affected businesses. Close compromised accounts and dispute unauthorized charges.
Place fraud alerts and credit freezes with the credit bureaus to restrict access to your credit reports.
Report identity theft to your local police department and obtain a copy of the police report.
File an identity theft report with the FTC and a complaint with the Federal Communications Commission (FCC) if your phone or mobile account was misused.
Contact government agencies like the IRS or SSA if the identity thief used your information to commit tax or benefits fraud. Provide evidence of identity theft to clear your name of any implications.
Monitor the progress of your case and keep verifies updated as you restore your identity. Be persistent following up.
Protect Yourself with Comprehensive Planning
Minimizing your vulnerability requires an ongoing, proactive approach to securing your personal information. Follow these best practices:
Monitor your credit reports from each bureau, bank statements, and benefits statements at least once per month.
Secure your physical documents and information by properly shredding and safely storing records.
Guard your social security card, limit sharing your SSN, and watch for anyone attempting to steal your number.
Defend against phishing by using secure online access, verifying requests for your details, and avoiding clicking suspect links or attachments.
Fortify your online presence by using strong unique passwords, enabling multi-factor authentication, and avoiding oversharing personal information.
Explore identity theft protection services to enable continuous monitoring and restoration support if your identity is compromised.
No one can eliminate the threat of identity theft and fraud entirely. But making it as difficult as possible for thieves to access your data can reduce your risk. Stay vigilant in protecting your identity.