What Is Identity Theft? What are the Signs and How to Prevent It?

In 2021, nearly 50 million Americans fell victim to identity theft, and it caused losses amounting to $56 billion. Identity theft has become one of the biggest threats to people’s financial security over the past few years. There are new ways of doing the deed nowadays. Out of the figure mentioned above, $13 billion got stolen through traditional methods. Criminals and cybercriminals stole credit and debit cards, banking account details, social security numbers, and other personally identifiable information from people.

The remaining $43 billion was stolen through advanced identify theft scams and fraud, where cybercriminals used different methods to extract personally identifiable information directly from the consumers. As we speak, someone is preparing a phishing email or creating a fake banking website to steal the banking details of thousands of people.

This article talks about identity theft in detail and discusses how you can detect and prevent it from happening to you and others.

What is Identity Theft?

Identity theft is nothing new – it has been around for several decades, and it continues to evolve into other forms with the help of technology. Identity theft occurs when someone steals someone’s personal information to commit fraud or forgery. For instance, if someone has access to your credit card number, date of expiry, and CVV number, they can max it out by performing fraudulent transactions in no time at all.

This is a common example of identity theft. Keep in mind that even if a friend uses your phone to dial 911 and pretends to be you. It can be considered identity theft, especially if their actions cause inconvenience, discomfort, or harm to someone. There are several different types of ID theft, so let’s look at some of them below.

Financial Identity Theft

Financial identity theft occurs when an individual uses the personal data of another individual for financial exploitation. It is one of the most common types of identity theft, such as the credit card fraud we have highlighted above. Furthermore, there are various forms of financial identity theft, including the following:

• Using one’s credit card information to buy something online – Everyone shops online nowadays, so it becomes easier for cybercriminals to use the stolen information to order goods amounting to thousands of dollars. It became highly prevalent during the COVID-19 pandemic.
• Stealing funds from one’s bank account – Criminals can siphon off money from your banking account by stealing the credentials to your internet banking account or smartphone app. They can steal anywhere between a couple hundred to a thousand dollars. If they do the same to dozens of users, the losses amount to millions of dollars.
• Using one’s identity to open new financial accounts – If a person gets their hands on your Social Security Number and other personally identifiable information, they can easily open new accounts in your name, which they can use. Moreover, they might even open a new line of credit, i.e., get a credit card issued, the bill of which will be sent to you.

Medical Identity Theft

Medical identity theft occurs when a person impersonates another person to avail of healthcare services. Although this is less common, it can be quite serious. Moreover, you might not even know about it. Some of the forms of medical identity theft include:

• Using one’s identity to get drug prescriptions – Most drugs are only available if one shows up with a prescription, but a person can get caught while getting the doctor to prescribe something. Therefore, they can impersonate another person identity and get the doctor to prescribe drugs.
• Using one’s identity to avail of medical services. Another way one can exploit another person is by stealing their identity and gaining access to medical services, especially ones they wouldn’t have to pay for. For instance, if you have health insurance and don’t need to pay when you get different checkups and tests done, another person might steal your identity and avail of all this for free. They can even get expensive surgeries, and you have to pay the bill.
• Using one’s identity to get medical equipment or devices – A person can also steal your identity if they know you are about to receive certain medical equipment or devices, such as a pacemaker, wheelchair, hearing aid, etc.

Fraudsters do this to get their healthcare and medical needs satisfied for free. When the payment time comes, you will receive all the bills and invoices. No matter how much you try to explain that you didn’t buy something or didn’t get a particular test done, you have to pay.

Criminal Identity Theft

Criminal identity theft is another common type of identity theft, and it happens when a person commits a crime and is arrested but uses someone else’s name instead of theirs. They can do this with the help of a fake or stolen ID that they show to the police. This identity theft is also difficult to detect until it is too late. You usually find out when the following happens:

• You receive a summons for a court hearing – If a person uses your ID to get away with unpaid parking tickets or other types of fines, the courts will issue a summons in your name.
• The court issues a warrant for your arrest – Shockingly, you might find out about the fraud when the police show up at your doorstep or stop your car on the street, taking you into custody for not appearing at a court hearing.
• You are listed as a criminal alias – Even if the police know that the criminal has used a fake or stolen ID, they might register your name and details as an alias for the criminal. Whenever someone initiates a background check, it would show them a criminal record in your name, and you might lose out on a job or house.

Like these examples, there are several other examples and types of identity theft that you can read about.

How to Detect Identity Theft?

Now that you have a clearer idea of identity theft, it is time to see how you can detect it. Nine out of ten times, you won’t find out about the crime until you experience a loss. However, you can always observe the signs and try to nip the problem in the bud. Here are some of the tips you can follow.

Receiving a Fraud Alert

Most financial institutions have advanced security protocols to detect and notify you against data breaches or hacking attempts. For instance, if your credit card information for a transaction some thousand miles away, the bank has the right to block the transaction and call you. You can immediately ask them to block your credit card or locate the exact location of the fraud.

Noticing Spikes in Your Credit Score

Most people don’t check their credit score that often unless they need to take out a line of credit or lease something. You should check it from time to time because if someone has stolen your identity and taken out a line of credit, it will cause your credit score to go up. If you see it go up suddenly, you can request a credit report from the major credit bureaus and determine when the scammer availed the extra credit line.

To check your credit score periodically, you can get in touch with these credit agencies:

• TransUnion
• Equifax
• Experian

A Denied Credit Card or Loan Application

Suppose you apply for a credit card or loan, and your application gets rejected based on bad credit or any overdue payments. In that case, this is a red flag, and you should contact the relevant financial institutions immediately. If you are sure there is no valid reason for your request to be denied, make sure to conduct a credit check and find out the reason for the rejection.

Getting Calls for Payments, You Don’t Know About

If you ever receive a call requiring you to make a payment you know nothing about, it can mean someone is firing a shot in the dark and looking to exploit your naivety, or someone has taken out a loan in your name and isn’t paying it back. In both cases, you should be on your guard.

You Receive Strangers’ Mail in Your Mailbox

One way of identity theft is to use a fake name and a random address that is real. If you are receiving mail from a person you don’t know; the chances are that somebody has used your address with their bank or hospital so that they can get away with their fraud.

You Get Unknown Tax Transcripts

If you are getting a tax transcript you never requested, or the IRS disapproves of your e-filing, someone might have used your identity and tax records for their gain. You can immediately call the IRS and contact their fraud alert department.

How to Prevent Identity Theft?

If you are wary about the steps in the previous section, you might be able to stop the losses caused due to identity fraud before it is too late. Plus, there are some measures you can take proactively, such as:

Freezing Your Credit

You can call one of the three credit agencies and request them to guide you on how to freeze your credit. Once you do this, no one can take out a line of credit on your name.

Concealing Your Social Security Number

You never know when someone is lurking around, their eyes peeled on your Social Security card. Make sure that the number is always hidden.

Research About Phishing

You can read about phishing and its use for identity theft to protect yourself.

Using Strong Passwords

Nowadays, nearly all online accounts require the use of lowercase and uppercase letters, special characters, and numbers while setting up a password.

Using Two-Factor Authentication (2FA)

Two-Factor Authentication is a must-have in today’s digital age. Whenever you or someone else tries to log in to an account with your credentials, 2FA will require a unique one-time pin (OTP) sent to your phone number or email address.

Shredding Documents with Your Personal Information

You can shred documents with your personal information if not in use, particularly if you have a lot of people walking around in your home or office.

Monitoring Your Financial and Medical History Regularly

It is always good to check your financial and medical history for any discrepancies, i.e., any transactions or medical procedures you didn’t initiate.

These steps can go a long way towards protecting you from identity theft. However, cybercriminals come up with new ways of stealing people’s identities and using them for their gain.

When it comes to your sensitive personal information, you have FOUND ME for your help. It is an advanced and robust solution that keeps your name, number, address, and other details safe. It helps first responders and other personnel access your information without revealing it to others.

FOUND ME offers many identification devices, like wristbands, necklaces, labels, or tags that have your personal information embedded in them. This information is secure in their database. If you have a medical emergency, i.e., an accident, any first responder or passerby can scan your identifier. They can send a notification to your emergency contacts while also sharing your location.

The person attending to you can also chat with your emergency contact. They can tell them that you are being treated or the ambulance is on its way. First responders also get access to your important medical information. They can use to save your life while your sensitive data is still safe.

FOUND ME uses the same encryption technology that credit card companies use to secure their cardholders’ data. Moreover, you can easily block your identifier if you lose it. You can use it to protect yourself, your family, friends, and even your precious belongings. You can find out more about FOUND ME here.