Identity theft is a constant in the news, not only because it is prevalent, but also because the consequences of identity theft can be serious. As soon as someone steals your identity, they can open credit cards, take out loans, or even sign for a mortgage in your name. Your best defense against identity theft is awareness, and understanding what to do if you become a victim.
The Federal Trade Commission (FTC) handled 1.4 million fraud reports in 2018, representing $1.48 billion in losses. This also meant that 1 in 10 Americans 16 or older—or 26 million people—had fallen victim to ID theft. Children are especially at risk because they have a Social Security number but no credit history. Seniors are also at a higher risk. According to the FTC, 80 percent of scam victims are over the age of 65.
Types of ID Theft
There are various forms of ID theft. Each has its own risks and consequences.
Financial identity theft is the most common. When you read about credit card data breaches at major department stores like Target or Best Buy, then your financial information may have been exposed. That’s why it’s a good idea to keep an eye on your credit card and financial accounts.
With credit card accounts, you can generally reverse fraudulent transactions and cancel the card before any real damage is done. Debit cards are a different story, because they provide direct access to your bank account. The Electronic Funds Transfer Act (EFTA) makes it clear that the responsibility for fraud detection is with the account holder. If you find a fraudulent transaction on your debit card within two business days, then you only lose $50; up to 60 days the loss is $500; after 60 days you will have to bear the full loss and overdraft fees.
Medical identity theft is becoming more prevalent. If someone accesses even part of your personal information, such as your Social Security number, they can bill you for fake treatments or, more likely, create phony medical accounts to get prescription drugs. This is one of the toughest types of ID theft to fight because your personal information could be stolen by someone with access to your medical records, or purchased on the dark web. Social Security numbers sell for $1 on the dark web but medical records can sell for up to $1,000.
Synthetic identity theft is more insidious. Synthetic identity theft is a new strategy wherein fraudsters combine real and fictitious information to create a false identity. They will use a child’s Social Security number and an address they control. They also use “piggybacking,” wherein they make themselves authorized users on a legitimate account.
If you become a victim of identity theft, the consequences can have a lasting impact. In addition to losing money, for example, ID theft can affect your credit score, which could have a lasting impact on your ability to borrow money. Medical ID theft can result in losing your health insurance. Any form of identity theft tends to affect other aspects of your life.
How Identity Thieves Operate
There are any number of ways that cybercriminals can access your personal information:
- Phishing. One of the most common forms of electronic ID theft is phishing. You have undoubtedly received countless unsolicited email offers telling you that you have won the lottery or can get a deal that is too good to be true. Unsolicited emails that trick you into surrendering personal information are the most common form of phishing attack. Many fraudsters are extremely sophisticated and will send you an email that appears to be from a store or bank you actually do business with, but it has embedded links designed to send you to a phony website or trigger a malware attack. To protect yourself, never respond to suspicious looking emails and never click on an embedded email link. If you want to see whether an offer is real, use your browser and go directly to the website so that you aren’t fooled by a phony link.
- Skimming. Stealing your debit card information is easy if you use a skimmer, which is a device that identity thieves insert into an ATM or gasoline pump terminal to steal your account information. When using a card reader, look for a reader that’s a different color or looks out of place, or see if the seal on the card reader is broken. These are indicators that someone may have installed a skimmer.
- Paper information. It’s becoming increasingly common to steal personal information by raiding your mailbox or your trash. Protect yourself by using a locked mailbox and shred any paperwork that contains sensitive information.
These are just a few of the most common ways that criminals steal your identity. There are many others. Your best defense is to use common sense and monitor your bank and credit card accounts. Also be sure to monitor your credit score and check the three credit bureaus—Equifax, Experian, and TransUnion—to make sure there are no unauthorized accounts on your credit reports.
Dealing with ID Theft
If you do become a victim of ID theft, there are a number of steps you can take:
Contact your bank, credit union, or credit card company if you see a suspicious charge or withdrawal. The sooner you contact them the better your chances of getting some if not all of your money back.
Freeze your credit.
Putting a freeze on your credit is the easiest way to stop identity thieves from opening phony accounts. Contact each of the three credit agencies and request a credit freeze, and be prepared to provide your Social Security number, your address, and your date of birth.
Use Identity Theft Services.
Use an identity theft protection service to help you prevent fraud and repair your credit. If you are a member of iQ Credit Union, we provide identity theft protection to all our members, and the service is free if you have an iQ checking account. With identity theft protection you have an advocate who can do the legwork for you, contacting the credit bureaus, your creditors, law enforcement, financial institutions, and government agencies on your behalf. Our ID theft protection service covers all types of identity theft and is good for 12 months. We also have lost document replacement services if you need them.
Identity theft has become a universal problem, but you don’t have to become a victim. Be diligent about watching your accounts and use common sense when using your debit or credit card. And if you do become a victim of ID theft, take the appropriate action and remember that iQ Credit Union is always here to help.