Identity theft: definition, signs, recovery & protection

Identity theft is becoming a common crime nowadays where fraudsters purposefully get a hold of an individual’s personal information such as name, pin number, email address, social security number, passwords, bank details etc.

Fraudsters can use your identity when committing crimes such as smuggling, leaving or entering a country illegally, drug trafficking and all kinds of illegal stuff.

Furthermore, having your social security number can allow the imposter to acquire false LOC (line of credit) summing up huge debt on your name. As per the statistics of Internal Revenue Service, Identity fraud was an increasingly common crime in 2014 which affected 2.7 million people.

Types of Identity Theft

Stolen credit cards, money from banks/ATMs are some of the stories that we often hear about. A preventive action usually involves setting up account alerts, credit card scanning, bank statements (for the purpose of identifying any activity that is not performed by you).

However, following are the various other types of theft that exist:

  • Tax identity theft – involves claiming of tax benefits by using someone else’s personal information
  • Medical identity theft – involves stealing of someone’s medical insurance information in order to claim prescribed drugs or healthcarefacilities.
  • Criminal identity theft – committing a crime and providing incorrect identifying information to the police.
  • Child identity theft – happens when the social security number of a child is stolen to commit a crime/fraud.

However, these are not the only ones that exist. Senior identity theft, financial identity theft, employment identity theft etc. are other types of identity theft that happen.

How Is Your Identity Stolen?

People are always at a risk of becoming a victim of identity theft. However, they realize it later in most cases until they check their bank or credit card statement or receive alerts for changes in activity or when a debt collector contacts them.

When an individual’s personal information is accessed by someone not authorized to do so, that’s called a data breach. Such breaches are risky and serious for businesses and consumers as they can create financial and personal risks.

Therefore, it is significant to be aware of how to protect yourself from becoming a victim. Accidents, computer failures and criminal activities are a few reasons why data breaches could occur.

Our emails also consist of important personal information (social security number, passwords etc.) that needs to be kept safe from criminals. Therefore, it is significant to destroy such files before deleting them as it can be obtained by thieves.

Cases like stolen personal items or if you lose your wallet, passport, social security card or debit cards may result in identity theft. In such cases, it is necessary to report to your bank as well as to the police.

Apart from these, the use of spyware or malware are also some other ways in which personal information can be stolen by fraudsters. These things can help people hack into computer databases and allow them to obtain personal information by acting as an authorized organization.

Signs Of Stolen Identity

Identity thefts are common nowadays and they vary from one another. Realizing that you’ve become a victim of it, often happens after you receive an alert or identity transaction that you’ve not made.

Following are the signs showing that you’ve become a victim:

  • Debt collectors contact you for unrecognized account activity
  • You don’t recognize the charges on your Debit or Credit card
  • Unrecognizable withdrawal from bank
  • Your credit report includes credit lines that you’re not familiar with
  • Medical service providers contact you explaining the services/benefits that you never received
  • Notice from IRS regarding the claim of tax benefits in your name
  • Information regarding data breach from a company

How To Deal With Identity Theft?

Identity theft is a serious crime which may result in financial risk, stress, damage to credit, privacy issues etc. If your personal information has been leaked/stolen, it means it’s out there for anyone to access or illegally use.

This can also cause IRS penalties leading to long term inquiries (if an individual becomes a victim of tax identity theft), delayed payments and much more.

Therefore, if you suspect that your personal information has been leaked or stolen, you need to immediately act to resolve the issue.

Below are some steps that can be taken if you’ve become a victim of identity theft:

Preventing further risk

So if your cellphone or credit card gets stolen you should immediately take action and freeze/block it in order to prevent the imposter from further using your information e.g. social security number. Along with this, you can place a fraud alert which requires additional steps to be taken by businesses before opening new accounts.

Report the theft

Where to report depends on the type of theft that has happened. For example, in case of social security identity theft, you are required to report it to the Federal Trade Commission and to IRS for tax identity theft.

Taking care of the damage done

At the end, you are the one responsible to make amends by disputing errors from the theft on your bank, credit card or medical records.

How To Help Protect Against Identity Theft?

Preventing all kinds of identity theft is something that is not possible. However, certain measures can be adopted in order to protect yourself from such incidents.

Some key measures indicated by the US government are:

  1. Taking care of your social security number by keeping it in a safe location and not carrying it with you at all times.
  2. Keep your personal information confidential, this means not trusting everyone with details like birthdate, account number, passwords etc.
  3. Activate security apps on your mobile and laptop.
  4. Collecting your mail regularly. Also, if you’re out of town, you can place your mail on hold.
  5. If there is any delay in your financial statements, you need to contact the sender promptly.
  6. Check your bank statements and other records regularly for unrecognizable activity. You can do it on your own or use services (like ScoreSense), which delivers protection against identity theft.
  7. Mails or paperwork that consists of sensitive information should be shredded.
  8. Change your passwords from time to time and set strong passwords.
  9. Your laptop should have firewall and other software installed for protection.
  10. Credit reports should be reviewed annually, you can get them at AnnualCreditReport.com.