Identity theft is one of the fastest-growing crimes worldwide. According to the Bureau of Justice Statistics, 10% of individuals aged 16 or older had been victims of identity theft in 2016. Based on the 2016 survey, 13.5 million females experienced identity theft while 12.5 million males had also experienced the same crime. So, how does identity theft occur? This crime happens when someone uses your personal information to purchase anything without your permission.
Today, several forms of identity theft can affect you in different ways. Although there’s no solid platform or method to exclude yourself from this crime, you can still prevent these criminals from targeting you by increasing your awareness, learning how your information can be at risk, and what they can do with it.
What is a Data Breach?
Data breaching can happen when someone gains access to an individual’s or organization’s data without their permission. Perpetrators usually target personal, sensitive, confidential, and protected data such as full names, Social Security numbers, and bank information (account number, PIN, mailing address). Based on data from the Identity Theft Resource Center (ITRC), over 1,244 data breaches incidents were reported in the US, which disclosed more than 446 million records in 2018.
Forms of Identity Theft
Driver’s License Identity Theft Once a person steals your driver’s license, it can be used to buy items under your name by using your information when filling out forms of identification, while using their picture. If your driver’s license is stolen, immediately contact the DMV (Department of Motor Vehicles) and put a freeze on your credit accounts.
Mail Identity Theft
Mail identity theft is one of the classic methods for criminals to collect your personal information through your mail. If someone stole your mail like your pre-approved credit card, they can retrieve valuable information like your financial account information, which can be used to make purchases or open up new credit cards. Once they have your primary identification such as your full name and account number, they can easily change the information of your mailing address to their desired location.Based on the data gathered by the US Postal Service’s Annual report, it received over 60,000 complaints of mail theft in 2016, which resulted in over 2,000 convictions. If you think one of your mail has been stolen, you can file a mail theft complaint with the US Postal Inspection Service.
Debit Card Fraud or Credit Card Fraud
Debit or Credit card fraud is done when someone uses your debit account or credit card to make a transaction without your permission. These criminals can also steal your personal information from your credit cards such as your personal identification number (PIN), account number, and security code to make unauthorized transactions without needing your physical credit card.
One of the known credit card scams is the card-not-present fraud where defrauders use your credit card information to make a remote transaction. If you’re a victim of credit and debit card fraud, you can visit the US Fraud Center to report the crime. Also, notify your bank if there’s unauthorized or suspicious information that appears on your credit report.
Online Shopping Fraud
According to a report by Experian, online shopping, or eCommerce fraud cases have increased more than 30% in the first six months of 2017 after credit cards with new chips were implemented in the US.
Social Security Number Identity Theft
Social security number (SSN) identity theft can occur when data breaches or Tax ID theft happen. If you find out that one of your mails has indicated the wrong last four digits of your SSN, or the wrong name or address, then you might be a victim of a Social Security Number Identity theft. To avoid this, make it a habit to regularly check your credit report and immediately report if you notice something unusual in your bank accounts — there are instances that it may just be an error from entering wrong information on a loan or credit application, but it still pays to check your information often.
Account Takeover Identity Theft
This type of identity theft occurs when someone gains access to your bank or credit card accounts — it can happen from a data breach, malware attack, or a phishing scam. Small businesses, commercial businesses, and corporate accounts are prone to account takeover identity theft, which has been happening for years. To prevent this from happening to your business, make it a habit to look for suspicious transactions on your account such as unknown charges. If someone manages to take over your account without your permission, call your bank and request a credit lock to prevent any damages or loss to your account.
Senior Identity Theft/Senior Scams
One of the most common forms of identity theft in the US is senior identity theft or senior scam. It’s a crime where retired individuals entrust their bank account information to scammers who have already developed a relationship over time by preying on them over the phone or via email. According to the Federal Trade Commission (FTC ), 37% of Americans (60 years or older) made fraud complaints in 2016; 20% of those complaints were for ID theft.
What Can Happen if Someone Steals Your ID?
In our current age of digital technology, many cybercrimes occur every single day. Identity theft is becoming a norm in our daily life as there were 650,000 reported ID theft incidents in 2019. Many people have been victims of identity theft, which turns their world upside down in the blink of an eye. Here are some scenarios that you may experience from Identity theft:
Low Credit Score: One common sign of being a victim of identity theft is having a low credit score even if you’re paying your bills on time. Having a low credit score means it’s going to be hard for you to get approved for a car loan application, home loan, personal loan, or even a student loan for your child.
One possible reason why you’re receiving a low rating on your credit scores can be because of an identity thief that has been using your personal information to obtain credit. After they get what they want, they will intentionally fail to make the monthly payments for the credit that they took out under your name, resulting in damages to your credit score.
A Huge, Expensive Headache: Once you’ve discovered that your account has been compromised by an identity thief, you need to do a lot of things to prevent damaging your credit score. You’ll have to contact each of your credit reporting agencies associated with your account to freeze it and call them again to lift your credit account. Also, you have to manage a lot of paperwork, which may take longer than a year to get everything straightened out.
That’s why it’s important to provide safety measures with your credit account to prevent anyone from stealing your personal information. Here are some ways to identify any suspicious activities that may lead to stealing your valuable information.
Get Fraud Alert on Your Credit Report: A fraud alert is a preventive measure that notifies any businesses to confirm your identity before moving forward with a new credit application. It’s a method that hinders identity thieves to make a new application under your name. Fraud alerts can last from 90 days to 7 years depending on the type of alert you add on your credit report. Also, adding a fraud alert to your credit report gives you a free copy of your credit report, which is a great opportunity to find any suspicious activity under your name.
Freeze Your Credit Report: Unlike fraud alerts that require the creditor to verify your identity, a security freeze places a lock on your credit record, which prevents identity thieves from making new accounts under your name. It’s free to freeze your account, just hand in the required documents to prove your identity, and make a call to the credit bureaus to request a security freeze.
Order Your Free Credit Reports Every year, you’re entitled to get a free copy of your credit report from the three main credit bureaus — utilize the opportunity by requesting one of your three reports every four months, so that you can monitor your credit for the whole year. However, the downside of this method is you can only see one bureau’s report at a time.
Buy Your Credit Reports You can also buy credit reports from the credit bureaus if you have already used your free credit reports. If you want to thoroughly monitor your credit report, you can request a three-in-one report that gives you a more comprehensive view of your credit history.
Monitor Your Accounts Online: Creating an online account with your bank and each of your credit card and loan accounts allows you to easily keep up with your account activity. Log in to check your account periodically to make sure no unauthorized charges have been made on your account. Keep your login information safe by not writing it down and not sharing it with anyone.
Keep Your Social Security Number Safe: If your SSN falls into the wrong hands, it may play a major role in your credit score. Social Security numbers can be used for opening various accounts under your name, filing fraudulent tax returns, accessing medical care, or committing crimes. To prevent that from happening, avoid carrying your SSN card in your wallet and be aware of your surroundings when giving your number to customer service representatives.
Stop Pre-Approved Credit Card Offers
Notify your banks to stop sending your pre-approved credit cards to you via mail. Pre-approved credit cards contain personal information that thieves can use for illegal activities. Also, if you have already received your credit card and are planning to dispose of it, shred it first to destroy any prints that could expose your identity.
How do Thieves Steal your ID?
Thieves or fraudsters have different ways to steal your information. Here are some methods that criminals use to obtain personal and sensitive information from you.
Phishing and SMiShing This cybercrime method occurs when cybercriminals attempt to send a fraudulent business email — emails that look very similar to official bank emails — to your email. They usually try to copy bank emails to get confidential and sensitive information from you. For example, a fraudulent email that looks very similar to an official email from a bank that wants you to verify your account. Once you’ve clicked the “verify link” indicated in the email, it will direct you to a website, which looks similar to your local bank and requires you to fill out personal information to “verify” your account.
Phishing can be done by opening anonymous emails that pretend to be official emails from different establishments like banks, restaurants, universities, and others. On the other hand, SMiShing is most likely similar to phishing, however, criminals use text messaging to obtain personal information instead of using emails.
Dumpster Diving Even though it may sound like a load of rubbish, dumpster diving is another method for criminals to obtain information from pre-approved credit cards and bank statements. To avoid getting your information stolen from the dumpster diving method, make it a habit to shred important documents before you dispose of it.
Wireless Hacking Wireless hacking is a new method to collect personal information without getting permission from its owner. It occurs when hackers intentionally gather confidential data from individuals that connect their devices into public WIFI networks or unsecured home networks. Some hackers may even install keylogging software — software that tracks users’ credentials such as usernames and passwords — which track the websites that you visit on your devices. To prevent this from happening, always make sure to connect your device from secured WIFI and home networks.
Fake Lottery Winnings and Job Ads “You’ve won $300, click this link to claim your prize!” Sounds familiar, doesn’t it? These ads circulate on the internet and lure individuals to click the advertisements. Once you’ve clicked these ads on the internet, it directs you to a web page that requires you to fill out personal information before you claim your prize. This is another method of identity theft that fraudsters use to obtain information and create fake identification to make illegal transactions. Protect yourself by remembering this simple saying, “If it sounds too good to be true, it probably is.”
ATM and Payment Machines Automated Teller Machines (ATM) and payment machines are not exempted from identity theft criminals, as these machines are often used by many people to withdraw money and pay different transactions. Cybercrime occurs when thieves tamper with the machines’ card slot with a device that can steal information. To avoid this crime, be aware of your surroundings and conduct a simple inspection of the machine. If it looks like it has been tampered with, don’t use it.
What Information is Considered Private?
When talking about privacy, there are different terms that you can use to define it, such as: personal information, personal data, personally identifiable information, private information, protected health information, individually identifiable information, or individually identifiable health information. Here are some forms of information that can be considered private:
- Names: Your full name, maiden name, and your mother’s maiden name are all considered private.
- Driver’s License: An official document that permits individuals to operate one or more types of vehicles on the road. The driver’s license can also be used to open bank accounts, credit cards, loan applications (house, car, mortgage, etc.).
- Biometrics: Fingerprints, retina scans, facial geometry, or voice signatures are also considered private information as they are widely used for opening smartphones, applications (banks, e-wallets), and computers.
- Social Security Number: A social security number (SSN) is a unique nine-digit number issued to U.S. citizens, permanent and temporary residents. It can be used for making new credit accounts and a required identification when setting up a medical care and health account.
- Bank Checks and Pre-approved Credit Cards: Checks and pre-approved credit cards contain confidential information such as checking account number and routing number that can be used to make new purchases.
- Medical History or Records: A medical history is a private piece of information that should be kept by its owner. Even sending medical history or records requires the sender to encrypt and secure the file by following the rule indicated by the United States Department of Health and Human Services (HHS).
Do You Need ID Theft Protection?
Identity theft services monitor personally identifiable information in credit applications, public records, websites, and other places for any unusual activity that could be signs of identity theft.
ID Theft Protection is a service that protects valuable, sensitive, and confidential information such as credit card accounts, bank accounts, and personal accounts (Full name, mailing address, date of birth, Social Security Number, Tax ID).
Do you Recommend ID Theft Protection?
Yes! With the different methods that criminals use today to collect someone’s data for illegal activities, it’s important to protect your private information and prevent thieves from stealing from you.
Companies that offer ID Theft protection cover different types of cybercrimes. Here are some services that they offer:
- Certain out-of-pocket losses
- Chat room monitoring
- Public record searches
- Monitoring of black market websites
- Virus protection software
Some insurance companies include a credit monitoring service that monitors your credit history and provides periodic credit scores.
Before choosing what kind of service you want to protect your information, it’s important to understand the blueprint of what they can offer you. Most of the companies that provide ID Theft services claim to provide a “free” service. However, before you accept their “free” service, make sure that it doesn’t come with any hidden trial periods, fees, or cancellation requirements. Finally, conduct a background check of the company to know if they have existing complaints from other customers.
Free Ways to Prevent Identity Theft
Implement a Security Freeze
If a cybercriminal has already hacked your credit accounts or bank accounts, it’s recommended to notify your bank immediately to avoid any transaction to be made under your name. A security freeze is a great method that holds your credit account and prevents new credit from being opened in your name. However, just remember that if you put your account on freeze, you’ll need to unfreeze it before you can open new accounts in your name.
On September 21, 2018, a federal law was created to allow consumers to freeze and unfreeze their credit records and place one-year fraud alerts for free. Under the new Economic, Growth, Regulatory Relief, and Consumer Protection Act, consumers in some states that have already frozen their credit records and are still paying fees for those services are no longer required to pay their providers. However, it does not apply for someone that wants to have your credit report for tenant-screening, insurance purposes, or employment.
Enroll in Fraud Alerts
If you believe that your account has been compromised by cyber thieves, or about to become one, you can put a fraud alert on your credit report. Although this action doesn’t stop thieves from stealing your information, it’s a procedure that lenders use to take certain measures to verify your identity first before checking your credit report. Normally, a fraud alert can last up to one year unless you decide to remove it sooner.
Is freezing your credit enough?
Although freezing your credit record is one of the most important steps that you need to take against identity thieves, it’s not enough to protect your account. Credit freezing doesn’t guarantee 100% protection on your account as you need to notify each credit reporting agency to issue a credit freeze. You will then need to call them to lift the freeze on your account. Also, you’re not allowed to open a new credit account (mortgage, auto loan, credit card, etc.) once you freeze your account.
How is ID Theft Protection Different from Credit Monitoring?
A credit record is an important factor when you want to apply for a loan application (car, house, mortgage). That’s why you must regularly monitor it from identity thieves that want to take advantage of your credit records. Identity Theft Protection and Credit Monitoring are two examples of how you can monitor and secure your accounts from thieves, however, there are differences between these two methods. Credit monitoring is a great tool for people that want to monitor the activity of their credit records and help people who want to improve their credit scores. On the other hand, identity theft protection is designed to provide services to its customers that surpass the services that credit monitoring can offer. Here are some benefits that are included in the identity theft protection services.
- Stolen Funds reimbursement – If you have money that was stolen because of identity theft, providers of identity theft protection will reimburse your loss from $25,000 up to $100,000. Some companies reimburse up to $1 million or are based on the limits of your plan.
- Transaction Monitoring – Transaction monitoring is a service that monitors your transactions including your past and present activities, transfers, deposits, and withdrawals. It’s a great tool to analyze your data and to check if there are unknown activities in your credit reports.
- Home Title Monitoring – Identity Theft Protection offers home title monitoring to ensure your home’s deed 24/7 against home title fraud — it’s a crime where thieves use your title to exploit money and commit illegal activities.
- Fictitious Names – Fraudsters who commit identity theft steal information from someone to create a synthetic identity. They usually steal Social Security numbers (SSNs) and use them to create accounts with false information like names, dates of birth, and addresses.
- ID Theft Restoration – Many people are victimized by identity theft every year, which is a great threat for most Americans. If your personal information falls to the wrong person, there’s a higher chance that you’ll need to pay a large sum of money before recovering it, not to mention the time, energy, and stress you get from these fraudsters. That’s why many companies offer Identity theft restoration for your identity and credit, which also alerts you from any suspicious activities.
What Should you Look For in ID Theft Protection Services?
With the shocking surge of identity theft cases every year, many companies offer different levels of Identity theft protection services on the market. But do you know how to find a good Identity theft protection service? Some companies use a combination of professionals and technology to regularly monitor databases and websites from unusual or suspicious activities. Usually, if fraudulent activity has been detected in your credit record, your provider will automatically send an alert through email, or text message. Here are some services that should be included in your identity theft protection services:
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- Insurance Policy – One of the great benefits of having identity theft protection is they save you hundreds of hours by taking care of all the paperwork, making calls to each credit reporting agency, and doing all the tedious tasks to ensure that your identity is restored and secured.
- Stolen Funds Protection – Protect your money by having stolen funds protection connected to your identity theft protection plan. Providers will reimburse your stolen money – read your terms and agreement first before adding a stolen funds protection in your plan. Some providers can only reimburse up to $ 25,000, others can reimburse you up to $1 million.
- Proactive Alerts – Adding proactive alerts to your plan is a great way to monitor your credit records when lenders like banks, auto dealers, government agencies, and mortgage companies request a copy of your credit reports. Also, it can detect unusual activities in your account like fraudulent attempts to open a new account under your name, which can greatly affect your credit score.
- Credit Monitoring It’s a method that monitors your transactions and keeps track of your credit score. Some companies use software to conduct credit monitoring for their customers, others hire experts and use software to do the task.Credit monitoring services look for unusual activity in your credit file that may indicate your financial information is being used fraudulently. Here are some signs that you may be a victim of identity theft:
- Fraudulent credit card changes
- Bogus loan applications
- Social Security number for sale on the dark web
- Family Plans If you also want to protect the identity of your family (children, partner, parents), you should look for a provider that offers identity theft protection with a family plan included. Some providers call it child social security monitoring or insurance coverage for family members.
- Dark Web Monitoring – Rule of the thumb when meeting individuals on the internet: not everyone has good intentions. Dark web monitoring is a great service to add in your identity theft protection plan where your provider will search through the deeper parts of the internet and check if your personal information has been used for criminal activities.
- Restoration Services – Another service that you need to look for is a dedicated support team that will take over for the recovery process of your personal information or credit report. Top identity theft protection companies offer you a counselor or specialist that will help you through the process of contacting credit agencies and completing paperwork.
How much should ID Theft Protection Cost?
Good identity theft protection should cost around $6 up to $17 per month. This will include different services that can help you secure your personal information and credit reports. To help you learn more about the costs of having identity theft protection, we’ll discuss the different plans that might be suitable for your needs.
But before we discuss it, we’ll use the Identity Guard’s identity theft protection plans to explain the costs per services — one of the top companies that provides excellent services when it comes to identity theft protection.
Value: $7.50/month
Basic Identity Protection:
- $1Million Identity Theft Insurance**
- US-based Customer Care Team
- Risk Management Report
- Data Breach Notifications
- Dark Web Monitoring
- High-Risk Transaction Monitoring
- Safe Browsing Tool
If you’re looking for an affordable plan that can protect your identity and credit records, then the Value plan from Identity Guard is a good choice for you. It also provides $1 million identity theft insurance and other essential services such as dark web monitoring, risk management report, and many more.
Total $16.67/month
Standard Identity Protection:
- $1Million Identity Theft Insurance**
- US-based Customer Care Team
- Risk Management Report
- Data Breach Notifications
- Dark Web Monitoring
- High-Risk Transaction Monitoring
- Safe Browsing Tool
- Bank Account Monitoring
Standard Credit Protection:
- 1-Bureau Monthly Credit Score*
- 3-Bureau Credit Monitoring
The Total plan provides powerful identity protection for individuals that want to secure their bank accounts and personal information. It also comes with a 1-time bureau monthly credit score report and 3-time bureau credit monitoring.
Premier: $25.00/month
Premium Identity Protection:
- $1Million Identity Theft Insurance**
- US-based Customer Care Team
- White-Glove Resolution Concierge
- Risk Management Report
- Data Breach Notifications
- Dark Web Monitoring
- High-Risk Transaction Monitoring
- Safe Browsing Tool
- Social Media Insights Report
- Bank Account Monitoring
- Credit & Debit Card Monitoring
- 401k & Investment Account Monitoring
- Criminal & Sex Offense Monitoring
- USPS Address Change Monitoring
- Home Title Monitoring
Premium Credit Protection:
- 1-Bureau Monthly Credit Score*
- 3-Bureau Credit Monitoring
- 3-Bureau Annual Credit Report
If you want to fully protect your personal information such as bank accounts, credit reports, and personal information like mailing and IP addresses, the Premium plan is the most suitable Identity theft protection service for you. The premium plan comes with different types of monitoring tools such as 401k & investment account monitoring, which is a great service for tracking your investments.
The Bottom Line
Identity theft protection is worth considering. Whether you decide to use this service or not, keep in mind that if someone manages to steal your confidential information, it could lead you to serious problems and can greatly affect your current lifestyle. For instance, if identity thieves were to successfully gain access to your credit record, they can use it to make new accounts and make new purchases under your name.
Those illegal actions could greatly affect your credit score, which will give you a poor chance to loan money at favorable rates. Although there are no specific services that can permanently stop these identity thieves from stealing information, identity theft protection can minimize the possibility of your account being targeted by cybercriminals.