Identity Theft: Protecting yourself

Have you ever received a call or letter notifying you of an application for credit or a loan you never made? Or has your credit card company alerted you about purchases you didn't authorize?

These could be signs of identity theft, an increasingly prevalent crime affecting millions yearly. Identity fraud occurs when someone steals your personal information, such as your social security number, driver's license number, credit card details, or other sensitive data, and uses it to commit fraud or different crimes.

Understanding Identity Theft: What Is It?

Identity theft is a term used to describe the unauthorized use or misuse of someone else's personal information for financial gain. It can leave victims with damaged credit scores, debt, and legal troubles. A thief may use stolen information to open new accounts in the victim's name, make fraudulent purchases using existing accounts, or even obtain medical services under the victim’s identity. They can also use this information to file fake tax returns and claim refunds without the victim’s knowledge.

In some cases, thieves can sell stolen identities on underground markets where criminals buy IDs and use them for illegal purposes such as terrorism financing and drug trafficking. Victims often experience emotional trauma and financial loss when they find out their identities have been stolen.

The Importance of Understanding Identity Theft

The consequences of identity theft are profound and far-reaching. Once your identity is stolen, it can take weeks, months, or even years to restore your credit history and reputation. To protect yourself from this growing threat, you must understand how it works so that you can take the necessary precautions to safeguard your data. Knowing what steps to take if you do become a victim is also essential in minimizing the damage done by an identity thief. Being prepared and knowing what to do can help you recover from identity theft's financial and emotional impact.

Overview of the Prevalence of Identity Theft

Identity theft is becoming more widespread each year, affecting millions of Americans. According to the Identity Theft Resource Center (ITRC), there were 1,473 data breaches in 2019, exposing more than 165 million records. In addition, over 3.2 million fraud reports were filed with the Federal Trade Commission (FTC) in the same year. These statistics show that identity fraud is a serious problem that continues to grow alarmingly. The Identity Theft Resource Center will release its latest ID theft publication on May 17th, 2023.

Understanding identity theft is crucial to protecting yourself from this growing threat. The prevalence of this crime highlights its significance in our society today and makes it imperative for us all to be vigilant about safeguarding our personal information.

What regions have the highest cases of ID theft?

In the United States, some states with the highest cases of identity theft crimes include Georgia, Louisiana, and Florida, as reported by the FTC's annual report on reported fraud and identity theft. California had the most identity theft complaints filed with the Federal Trade Commission (FTC) in 2022, with 125,597 cases reported. Washington, D.C. tops the list with the most online fraud and identity theft.

Types of Identity Theft

It is important to be aware of identity theft when someone acquires and misuses another individual's personal information to carry out fraudulent activities or other illegal acts. To safeguard oneself, it is necessary to understand the various forms of identity theft, such as financial, medical, and criminal identity theft.

• - Financial Identity Theft: This involves using someone's personal information to gain unauthorized access to their financial accounts or to open new accounts in their name. This may include credit card fraud, bank account takeovers, or taking out loans under someone else's name.

• - Social Security Identity Theft: In this type of identity theft, the thief uses another person's Social Security number for fraud. They may use it to obtain employment, file false tax returns, or receive government benefits.

• - Medical Identity Theft: Here, an individual's personal information is used to obtain medical services, prescription drugs, or health insurance coverage. This can lead to false medical records, improper billing, and potential harm to the victim's medical treatment.

• - Driver's License Identity Theft: This occurs when someone uses another person's identity to obtain a driver's license or identification card. The thieves may use it to commit other crimes, such as fraud or illegal activities while posing as the victim.

• - Criminal Identity Theft: In this form of identity theft, a criminal uses another person's identity during the commission of a crime to avoid detection or to falsely incriminate the victim.

• - Child Identity Theft: Children's identities are appealing targets for identity thieves because they often go undetected for years. Thieves may use a child's Social Security number to open credit accounts, apply for government benefits, or commit other fraudulent activities.

• - Synthetic Identity Theft: A type of fraud where a new identity is created by mixing genuine and false information. The perpetrators may use a valid Social Security number but alter personal details like name, address, and other information to obtain credit or engage in fraudulent activities.

• - Tax Identity Theft: In tax ID theft, someone uses another person's Social Security number to file fraudulent tax returns and claim refunds. This can result in delayed tax refunds for the victim and other complications with their tax records.

• - Online Identity Theft: This type of ID theft occurs in the digital realm, where identity thieves use phishing, hacking, or malware to steal personal information, login credentials, or financial data from individuals online.

• - Identity Cloning: In identity cloning, the thief assumes the entire identity of the victim, using their personal information and documents to establish a new life, obtain credit, or commit other illegal activities while posing as the victim.

• - Deceased Victim Identity Theft: Criminals assume the identity of a deceased person to open fraudulent accounts or to hide their true identity from police or the government.

Identity theft can take various forms, and criminals constantly find new ways to exploit personal information for fraud. Staying vigilant and taking precautions to protect personal information is crucial to preventing ID theft. The Fair Credit Reporting Act (FCRA) is a federal law that can help you monitor and protect your credit.

Financial Identity Theft Most Prevalent

One of the most common types of identity fraud is financial ID theft. It happens when an identity thief uses someone else's personal information to open new credit cards, take out loans, or make unauthorized purchases. Financial identity thieves can use your social security number, address, and date of birth to impersonate you.

Credit Card Fraud

Financial identity theft through credit card fraud happens when an unauthorized person acquires and misuses your credit card details to make purchases. Credit card fraud can happen in several ways, such as through skimming devices at ATMs or gas pumps or phishing scams where criminals send fraudulent emails pretending to be from a legitimate source requesting your credit card information.

Bank Fraud

Bank fraud involves using stolen identities to open bank accounts in someone else's name or access bank accounts. Bank fraudsters may use stolen identity credentials to change account details like passwords before transferring funds out of the account undetected.

Loan Fraud

Loan fraud happens when an imposter takes out a loan using someone else's personal information without their knowledge or consent. Loan scammers may obtain loans in large amounts that victims will only realize after receiving bills for repayments on loans they did not take.

How Identity Thieves Obtain Personal Information

Identity thieves use various tactics to obtain personal information from individuals. One common method is dumpster diving, where people search people's trash for discarded personal documents such as bills, credit card statements, and bank statements. Once they have obtained these documents, the identity thief can use them to access sensitive information such as social security numbers and account numbers.

Identity thieves commonly use phishing, a fraudulent method of obtaining personal information. They create deceptive emails that seem to be from respected businesses, asking for private data like usernames, passwords, or credit card numbers. Naive individuals often click on the line in these emails, redirecting them to bogus websites. Additionally, identity thieves use skimming devices to gather sensitive information.

When inserted into the machine, they attach these devices to ATMs or gas pumps that read the magnetic strip of a credit or debit card. This information is then used to create counterfeit cards.

Who is most at risk for identity theft?

Children have become a popular target for cybercriminals, with 1.25 million children in the U.S. falling victim to identity theft and fraud in 2021. Children are at higher risk because their personal information is often seen as "clean," with no prior credit history or financial records, making it easier for criminals to use their identities for fraudulent activities. Additionally, identity theft involving children often goes unnoticed for long periods, as parents or guardians may not regularly monitor their child's credit or personal information.

Another group at risk for identity theft are those with increased exposure to technology and online activities, as the problem of identity theft has expanded with society's growing reliance on technology to store and transfer personally-identifying information. Factors that increase the risk of identity theft can be linked to a person's daily habits and activities. These may include frequent online transactions, sharing personal information on social media, and using public Wi-Fi networks, among other things.

Warning Signs and Prevention Techniques for Identity Theft

Warning Signs of Identity Theft:

If you notice unfamiliar charges on your bank statements or credit reports, this could signify identity theft. Receiving bills or collection calls for accounts you didn't open can also indicate that your personal information has been compromised. If you've been denied credit or received higher interest rates than usual, it's essential to investigate whether someone has stolen your identity. If you're not receiving expected bills or other mail, this could indicate that someone else has taken control of your accounts.

Here are 9 warning signs of identity theft:

1. Your bank statement doesn’t look right or your checks bounce: Keep an eye on your bank account summary and look for any discrepancies or transactions you don't recognize.

2. You see unfamiliar and unauthorized activity on your credit card or credit report: Monitor your credit card statements and credit report for any suspicious transactions or changes.

3. You receive bills for goods or services you didn't purchase: This may indicate that someone is using your information to make unauthorized purchases.

4. Debt collectors call you about debts that aren't yours: If debt collectors contact you for debts you don't recognize, this could be a sign that your identity has been stolen.

5. You are denied credit for no apparent reason: A sudden denial of credit or a change in your credit score could indicate that someone is using your identity.

6. You receive notifications about accounts you didn't open: If you receive emails or letters about accounts you don't remember opening, this could be a sign of identity theft.

7. Your tax return is rejected due to a duplicate filing: If the IRS notifies you that your tax return has been rejected because someone else has already filed using your Social Security number, this could be a sign of identity theft.

8. Your medical records show treatments or conditions you don't have: If your medical records show unfamiliar treatments or diagnoses, this could be a sign that someone is using your information to obtain medical services.

9. You receive a notification from a company about a data breach: If a company informs you that your information was part of a data breach, your identity may be at risk.

By being vigilant and monitoring your financial and personal information, you can spot these warning signs early and take action to minimize the impact of identity theft.

Prevention Techniques: What should I do if I think I am a victim of iD theft?

It would be best if you took several key actions to prevent identity theft from occurring in the first place. It's important to shred personal documents before throwing them away, so no one can get their hands on them once they're in the trash. Use strong passwords and change them frequently to prevent someone from hacking into your accounts. Always be cautious when sharing personal information online and only provide this information when necessary.

Monitoring your financial statements regularly is a good idea to spot any suspicious activity quickly. Set up fraud alerts on all of your loans and credit cards. Turn on credit monitoring with the credit bureaus, receive text message alerts, and file a police report on potential fraud. Keep a close eye on your credit and debt, review transactions and withdrawals, and consider identity theft monitoring services. If you do discover fraud on your credit cards, immediately contact their fraud prevention department.

Keep your iPads, laptops, desktop computers, phones, and all other devices secure, and preferably enable fingerprint authorization for access. Enable 2FA on any accounts where possible, including all social media. This allows you to receive a text message if someone tries to access your accounts. Change your passwords often and make them extremely hard to break. Keep your tax returns and legal documents securely locked away.

If you have crypto wallets or corporate shares on apps like Coinbase and Robinhood, keep that information in a secure place where only you can access it. If an identity thief can access your crypto wallet, they can wipe you out, and you’ll have no recourse. The same goes for any NFTs you own. It is highly recommended to take your crypto and digital assets off public blockchains and store them in a personal crypto wallet.

Financial Losses and Damages to Credit Scores

If someone steals your identity, they can cause significant financial harm. This could include draining your bank account or opening new credit accounts in your name, which you are responsible for paying off. In addition, ID theft can damage your credit score, making it difficult to obtain loans or credit in the future.

Emotional Distress and Strain on Relationships with Family and Friends

Identity theft can also have emotional consequences like stress, anxiety, and embarrassment. Victims often feel violated because their personal information has been stolen and used without permission. In addition, the strain caused by these identity theft incidents can lead to strained relationships with family members or friends who may not understand what is happening.

How can I recover from identity theft?

• Contact the fraud departments of the affected accounts: Report the fraud and speak to the fraud departments at the banks or financial institutions where the theft occurred.

• File a report with your local police department: This helps create an official record of identity theft.

• Complete an identity theft report with the Federal Trade Commission (FTC): Go to https://www.identitytheft.gov or call 1-877-438-4338 to file a report. The FTC will provide you with a step-by-step recovery plan and checklist based on your provided information.

• Put a fraud alert or freeze on your credit reports: A fraud alert advises potential creditors to take additional steps to verify your identity before issuing credit in your name. A credit freeze prevents any additional credit accounts from being opened. Requesting a fraud alert from one of the three credit bureaus means the alert will automatically be placed on all of your credit reports. For a credit freeze, contact each of the three credit bureaus separately.

• Monitor your credit reports regularly: Keep a close eye on your credit reports to ensure that no new fraudulent accounts have been opened and to track the progress of resolving the identity theft issue. You can also sign up for identity theft protection plans.

How to report Identity theft; Step by step

If you discover that you are the victim of identity theft, it is essential to take immediate action to report the theft and minimize its impact. Here are the steps you should follow to report identity theft:

1. File a report with your local police department: It is essential to file a report with your local police department, even if you don't know the perpetrator or their location. This report will help establish a record of the theft and might be helpful in future investigations.

2. Complete an identity theft report with the Federal Trade Commission (FTC): Visit https://www.identitytheft.gov or call 1-877-438-4338 to file an FTC report. This report will help you organize your information, and the FTC will provide you with a step-by-step recovery plan and checklist based on the information provided.

3. Gather documents to support your claim: Collect evidence of the identity theft, such as bank account or credit card statements, credit reports, email notifications, and bills or collection notices with unfamiliar charges. Provide these documents to the police when you file your report.

4. Contact agencies that issued your photo identification: If your wallet or purse has been stolen or you have lost your identification, contact the Department of Motor Vehicles or any other agency that issued your identification, such as a school or place of employment. This will help you get a replacement ID and cancel the old one to prevent further misuse of your information.

5. Gather other documentation to prove your identity: If your driver's license or photo ID is lost or stolen, you may need to rely on other documents to prove who you are. These could include your birth certificate, Social Security card, or passport.

6. Put a fraud alert on or freeze your credit reports: A fraud alert advises potential creditors to take additional steps to verify your identity before issuing credit in your name. Requesting a fraud alert from one of the three credit bureaus will automatically place the alert on all your credit reports. A credit freeze prevents additional credit accounts from being opened and must be done separately through each of the three credit bureaus. Fees for credit freezes may be waived if you provide a copy of your police report as proof of identity theft.

You can also report identity theft at IdentityTheft.gov, the federal government's one-stop resource to help people report and recover from identity theft. The site provides step-by-step advice and helpful resources like easy-to-print checklists and sample letters.

Identity theft laws

Identity theft is a significant concern worldwide, and numerous laws have been enacted to prevent it and protect victims.

The federal government has implemented several laws to combat identity theft in the United States. One of the most notable is the "Identity Theft and Assumption Deterrence Act." This act amended 18 US Code Section 1028 to prohibit identity theft and make it a separate crime against the victims. It also increased the penalties for identity theft and fraud, allowing a maximum penalty for such offenses. Several federal laws have been passed in the United States to address identity theft and protect victims. Some of the key laws related to identity theft include:

1. Identity Theft and Assumption Deterrence Act: This law amended 18 US Code Section 1028 to prohibit identity theft and make it a separate crime against the victims. It also increased the penalties for identity theft and fraud by allowing a maximum penalty of 15 years imprisonment, a fine, or both.

At the international level, the United Nations Office on Drugs and Crime (UNODC) published a Handbook on Identity-related Crime in 2011. The main objective of this handbook is to set out a range of options and considerations to be taken into account when addressing domestic criminal justice matters about identity-related crime, including specific challenges in international cooperation. UNODC has also launched a consultative platform on identity-related crime to bring together senior public sector representatives, business leaders, international and regional organizations, and other stakeholders to pool experience, develop strategies, and facilitate the exchange of information.

These laws and initiatives underline the serious nature of identity theft and the global efforts to combat it. They aim to provide legal avenues for victims to seek redress and establish penalties to deter potential perpetrators.

What can the identity thief be charged with for his crimes?

If someone steals another person's identity, they may face different charges depending on the location and specific details of the case. In certain states, identity theft laws are similar to laws regarding other types of theft, and the punishment will depend on the amount of money the victim lost. For example, a defendant may receive a misdemeanor charge if the losses were less than $500, and the penalty would increase to a felony for losses exceeding $500.

Remember that the specific charges, penalties, and sentences for identity theft can vary depending on the jurisdiction and the nature of the crime committed. It's important to consult local laws and regulations to understand the potential consequences identity thieves face in a given area.

Identity Theft Resources

• IdentityTheft.gov

• Identity Theft Resource Center

• Federal Trade Commission ID Theft

• The Latest Data Breaches (2023)