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Identity theft isn’t something anyone wants to think about, per se. But the reality is that it can happen anytime.
To help, we’re giving you the low down: what identity theft is, why it might happen, and what you can to do prevent it:
What is identity theft?
Identity theft is when a scammer steals a valuable piece of sensitive, personal information to use to their advantage. The most common type? You probably guessed it — financial identity theft. That’s when a scammer uses your info to their financial gain.
Example: Your Social Security number, name, home address, or credit card number are used to: Get a tax refund, take out a loan, open new bank accounts in your name, or make purchases.
Why is it so important to protect yourself? Depending on the type of theft and your situation, you could be on the hook for paying part of the financial damage. In fact, according to a 2020 identity theft report, consumers paid $3.5 billion in out-of-pocket costs in 2019. And incidences of identity theft are on the rise. The Federal Trade Commission (FTC) reported that cases of identity theft have doubled in 2020 from 2019. That’s 1.4 million cases here.
What are the different types of identity theft?
In the case of identity theft, what you don’t know can certainly hurt you. To help protect yourself, keep these 7 main categories in mind at all times:
1. Credit identity theft
Credit identity theft can be broken up further into two sub-categories:
- Credit card fraud: your personal information is used to get a new credit card, or your credit card is used to make purchases.
- Loan fraud: your information is used to apply for a loan in your name. (While someone else may receive funds from the loan, you’ll be on the hook for paying it off.)
2. Child identity theft
Yes, those under the age of 18 may also fall prey to identity theft.
Example: A child’s Social Security number is used to open a bank account or credit card, rent a place, apply for a job, or government benefits (such as disability) or unemployment, to apply for a utility service, or to get a loan.
Since children aren’t legally able to apply for accounts, and don’t typically have credit files, this type of identity theft can go unnoticed for years.
3. Synthetic identity theft
As the name implies this is when fake and real information is combined to create a pseudo-fake identity.
Example: Your name and Social Security number are used in combination with a fake name, mailing address, and email to open fake accounts or take out a loan.
Because synthetic identity theft is using more than one person’s info, it can be harder to detect. For instance, because these new credit lines aren’t reported on your credit report, you might not know you’ve been a victim for quite some time.
4. Taxpayer identity theft
In 2019, the IRS received 137,000 reported incidents of identity theft.
Example: Your Social Security number or other personal information is used to file a tax return and claim a refund.
Your refund is deposited into a bank account or by way of a check in the mail to an address so a scammer can get their paws on that money.
These scammers usually file returns electronically and do so early in the season. That way they get to file a return to the IRS before you do, blocking you from filing a legit return.
5. Account identity theft
This form of financial identity theft is anything related to your financial accounts.
Example: Your personal information is used to open a new bank account, or your debit card number is used to make fraudulent purchases.
A scammer might also make online purchases using your PayPal account, or find a way to weasel into an existing online Amazon account and make purchases that way.
6. Medical identity theft
This isn’t a direct form of financial identity theft, but it’s still important to mention.
Example: Your personal information – like your name or Medicare number – is used to get medical services or government benefits.
Your medical record then gets filled with bogus information, which can make it a real headache to clean up — and sometimes blocks you from getting the services you need.
7. Criminal identity theft
Criminal identity theft is another form of non-financial identity theft.
Example: Someone gets in trouble with the law and they pretend to be you to law enforcement officials.
As you can imagine, this kind of theft can come as a total surprise. For example, when you get pulled over, and discover you’re (somehow) on probation.
How to prevent identity theft from happening to you
While danger abounds, the good news is that there are steps you can take to prevent identity theft. Here are a few ways you can go about it:
1. Don’t underestimate the strength of a strong password
You’re probably aware of the special sauce formula that goes into making a strong password: a mega mix of numbers and letters that are both uppercase and lowercase. And toss in a few symbols. Not reusing passwords can prevent identity theft, points out Parker. But actually doing it might be another matter.
Tip: To keep track of all your unique passwords, you can use a password manager to store them safely.
2. Avoid oversharing on social media
Sharing bits of our lives on social media can’t always be avoided. But that doesn’t mean we can’t be careful about what we disclose. If you’re showing off your work-from-home space, do a quick check and ask: does your selfie also reveal any personal information on your computer screen?
“The more pieces of our identity that people can cobble together, the easier it becomes for them to access financial accounts or pretend to be us and open an account in our name,” says Parker. “Anytime a photo is posted, ask yourself: What’s that on the desk? What can be seen in the reflection on the window or mirror? Can you see the street signs out a window?”
Tip: If you’ve received a COVID-19 vaccine, beware of “People are excitedly sharing photos of their vaccination cards which includes their name, birthday, and patient numbers — and that puts them at higher risk,” says Parker.
3. Use two-factor authentication
Two-factor authentication is when you input a password, and then you’re asked to punch in another code that’s either sent by way of text, phone call, or email.
Tip: Of course, you’ll want to be careful as to make sure nobody is watching over your shoulder as you enter this info!
4. Put a screen lock on it
Should you leave your phone out on a desk, make sure the screen locks promptly after setting it down. The same goes for when you’ve stepped away from your computer.
Tip: If you’re out running errands during lunch, be sure to log out of your laptop — even if you’re at home.
5. Avoid public Wi-Fi
While you might not be out and about as usual because of the pandemic, it’s tempting to tap into public Wi-Fi. It can be readily accessible and, well, free – but it’s not protected.
Tip: If you are using public Wi-Fi, be sure not to input passwords or personal information.
6. Sign up for account alerts
This typically only takes a few minutes but could prevent identity theft from happening to you. You can set alerts on your debit and credit cards for transactions that are over X amount, or anytime there’s a purchase made over the phone, online, or in-store.
Tip: Bonus! This also helps you keep an eye on your spending.
7. Make sure your financial information is up to date
Go through your accounts and make sure your address and contact info is accurate. Should there be suspicious activity, can your financial institution or credit card company easily get a hold of you?
Tip: It’s easier for scammers to sneak underneath your nose if your info isn’t up to date.
7. Monitor your credit
Keep tabs on your credit to make sure there’s no fishy activity. Note potential red flags: your credit score dips down or goes up for no apparent reason, or you order a credit report and see accounts that you didn’t open.
Tip: These days, there are plenty of free websites where you can check your credit score, (without hurting it!)
8. Be watchful
As Mulder and Scully of the X-Files would say, “Trust No One.” If you get a random text or email offering something, or asking you for info or to wire money, take a step back. Pause, and check to see if it’s legit.
Tip: If it’s too good to be true, it probably is!
Prioritize protecting yourself
While identity theft feels like it’s everywhere, especially because so much of our financial and personal lives are online, you can do your part in protecting yourself from these scammers. “Anytime personal details are requested, online or in real life, we need to ask ourselves why they need that specific detail, and what are the risks of sharing it,” says Parker. “If it isn’t necessary we should leave it blank or ask why they need it.”