Six Ways Identity Fraud Occurs, What Identity Thieves Do With Your Information, and How to Stop ID Theft
What is identity theft?
ID theft is something most people don’t think about until they become a victim of identity theft themselves. Identity thieves can use your personal information to purchase goods fraudulently. Once you’ve become a victim of identity fraud, it’s a long road to fixing your credit.
The goal is to stop ID theft before it occurs and to report identity theft as soon as you can and dispute fraudulent charges. This can help lessen the impact of a stolen identity. The last thing you want is to go online and see large, suspicious transactions on your credit card statement. Luckily for you, many credit cards offer credit protection for credit card fraud. However, it makes you wonder how identity thieves can use your personal information to rack up charges.
ID theft occurs when identity thieves steal your credit card or social security number. This can be a very stressful time, and if you don’t catch it quickly, the consequences can be massive. Your social security number is an identity tracking method the Social Security Administration uses for everyone. You need one to apply for a loan, a job, or to get government benefits. You’re assigned one when you’re born, and you usually won’t get another one.
ID Theft – How Identity Thieves Get Your Information
ID theft can happen in seconds, and there are several ways this can occur. The bad thing about ID theft is you usually don’t know it’s happening until it’s too late. Unless you routinely monitor your FICO credit score, you’ll usually be unaware until the collections bureaus come calling. So this can be a nasty shock for anyone to get, and it happens every day.
1. Lost or Stolen Documents
How many times have you lost documents with personal information on them or thrown them into the trash? Chances are you’ve probably done it more than once. How about your purse or a wallet? Your wallet typically contains your social security card, driver’s license, and credit cards. If someone were to find your information, you could quickly become a victim of ID theft.
2. Lost Digital Devices
Everyone has lost or misplaced their phone, laptop, or tablet at one point or another. These devices typically contain sensitive personal information, that an identity thief would love to get. Things like banking information, passwords, and tax documents are common. Further, if your device doesn’t have a password, it makes it easier for ID theft to happen.
3. Insecure Online Data
The digital age ushered in a convenient way to make purchases, pay bills, and check your bank accounts. However, it has also made it easier for identity fraud to happen. Unsecured connections, phishing, unsafe websites, and easy-to-guess passwords are top ways identity thieves get your information.
4. Company Data Breaches
This one isn’t your fault, and it happens on a regular basis. For example, do you remember the 2013 Target data breach? Hackers got into Target’s systems and got immediate access to thousands of people’s personal information. Company credit card data breaches are not limited to just credit card information either. The identity thief could also get email addresses, social security numbers, passwords, and birthdays.
5. Phishing Scams
A phishing scam is a common way people become victims of identity fraud. The thief will send an official looking email requesting your personal information. If you believe it, you’ll hand over your name, birthday, social security number, and even your banking information.
Credit card skimming is an easy way for thieves to get your credit card information. They attach a device to an ATM or gas pump credit card readers and it ‘skims’ your information. Also, they may attach a small camera to get your PIN number as well. Most of the time, you don’t even realize it’s there because it fits so well.
Things Identity Thieves do with Your Personal Information
1. Charge Purchases
Once ID theft occurs, the thieves usually go on a shopping spree. Timing is everything to them because they realize you’ll catch on sooner or later. When you do, you cancel the card, and it’s useless. They can easily spend thousands of dollars in under 30 minutes. They typically go into a larger mall and pick up several items they can turn around and sell quickly. Electronics, designer clothing, and jewelry are three major items they purchase.
2. ATM Withdrawals
A big part of ID theft is getting into your bank accounts and draining them. Many people mistakenly assume that the thief won’t use an ATM because it needs a pin. However, if they stole your purse or wallet, they may have clues to your PIN. Many people use the last four digits of their birthdays or their social security numbers as their PINS. A thief can hit up dozens of ATM in under an hour and drain your checking and savings accounts.
3. Medical Care
Medical care is a sector where one visit could cost your thousands of dollars. When you become a victim of identity theft, the thief can use your social security number for medical treatment. If this happens, it may be years before you hear about it, and it’ll stain your medical history. This can also lead to inaccurate medical records, which can have deadly consequences.
4. Open Accounts
Your bank requires your social security card to open new lines of credit and to approve you for a mortgage or a loan. The identity thief can use your social security number to take out a loan or a credit card. They’ll charge up a high balance with no intention of repaying it. So this can destroy your credit and make it hard for you to get credit.
How to Avoid Identity Theft and Identity Fraud
1. Shred Your Documents
An easy way to avoid identity theft is to shred your documents before you put them in the trash. Purchase an inexpensive shredding device and run all of your documents through it then toss them.
2. Monitor Your Financial Statements
Step up your theft protection measures by monitoring your financial statements. Check your credit report every three to four months. You should also check your credit card and bank statements every month as well.
3. Use Hard Passwords
Obvious passwords are an easy way to become a victim of identity fraud. Use random letter and number combinations and change them frequently. Also, use different passwords for every account you have.
4. Report Suspicious Activity
The moment you notice suspicious activity on any of your financial records, report it. This is a crucial step to identity theft protection as it can negate the damage to your credit.
5. Secure Your Online Information
Put a password on your phone, laptop, or tablet to secure them. You should only use reputable websites. It is also a good idea to safeguard your credit card information and erase it from any websites. Data security is a huge step in the ID theft protection process.
How to Report Identity Theft or Credit Card Fraud
Are you a victim of ID theft and identity fraud? Visit IdentityTheft.gov and find various resources to help guide you. This government agency provides sample letters you can use to send to credit bureaus to dispute fraudulent activity. Also, most importantly they offer a comprehensive guide to teach how to effectively handle issues pertaining to your stolen identity.
ID Theft and Identity Fraud Prevention
Fraud prevention starts with safeguarding your information. This includes digital and paper formats, and anything with sensitive information. The key to identity protection is being smart with your information. Never give out your social security number and report suspicious activity as soon as you notice it. These are some the most important steps in identity fraud prevention.
Finally, all of these steps can help prevent ID theft, and a lot of them are small things. However, they can prevent you from having to fight to get your identity back, and that is worth it.