Dealing With Identity Theft
Millions of Americans are at risk of having their personal information stolen. Internet shopping, online payment processes, online banking, and the physical theft of personal documents can all lead to identity theft. Understanding what the different types of identity theft are, as well as indicators of identity theft can help you take the necessary steps to prevent it.
What is Identity Theft?
Identity theft occurs when someone breaches your information and then uses your identity. In most cases, the identity breach is used to open a bank account, receive credit, or to make a purchase. Some people may also use this information to register for services such as a new phone or utilities.
Types of Identity Theft
Identity theft can occur in any situation in which your personal information is stolen. It can affect your credit, financial situation, bank accounts, or even your ability to gain employment. These are a few of the most common types of identity theft:
- Social Security theft: Social Security theft occurs when your Social Security number is stolen. The social security number can be used to fill out a credit application or to get additional personal documents such as a driver’s license or ID.
- Driver’s License theft: Driver’s license theft is actually one of the most common types of identity theft. The ID can be used to obtain additional documents that will make it easier to take out credit or open new accounts.
- Mail theft: You might be surprised to learn that your identity can be stolen through the mail. Criminals can learn a lot about your personal information by retrieving your mail and then use this information to open new accounts.
- Criminal theft: Criminal theft occurs when your personal information is given to a police officer or agency following a crime. The individual may have access to your driver’s license or ID and you could be left with criminal charges.
- Medical theft: Medical theft occurs when an individual uses another person’s identity to receive medical services. Because it can take a few weeks or even months for a bill to come, you might not notice that your information has been used until much later in time.
- Loan theft: Loan theft occurs when your identity is used to take out a loan. The individual may use your ID, Social Security number, or other personal information to take out a car loan, open a new credit card, or even to obtain a mortgage.
- Employment theft: Employment theft occurs when an individual uses your identity to register for a new job. Using your Social Security number or ID, the individual will receive income, leaving you with the taxes owed.
Understanding the different types of identity theft can help you be more aware of your personal information.
Identifying Identity Theft
It is not always easy to identify identity theft. Sometimes, the only indicator is a weird phone call asking where to ship an item that you bought online or noticing a credit card statement for a credit card that you do not currently have. The following are a few signs that you might be the victim of identity theft:
- Weird banking activity: If you notice withdraws or purchases that you can’t explain, it could mean that someone has access to your bank account.
- Missing mail: If you notice that you are frequently missing items in the mail, it is possible that someone is directing it to a new address.
- Increase in debt collector phone calls: Receiving frequent phone calls from debt collectors about debt you are unaware of could indicate identity theft. It is also possible that you will be turned down for a loan application, despite having good credit otherwise.
- Inconsistencies in your credit report: Inconsistencies on your credit report including change of employer, new address, new credit cards, or accounts that you don’t know about often indicate that someone has access to your credit information.
- Inaccurate medical records: Inaccurate activity on your medical records or medical bills could mean that someone is using your Social Security number to receive medical services.
- IRS collection notification: A letter from the IRS that you owe taxes on an income you don’t know anything about could mean that you are the victim of employment fraud.
In some cases, you might receive letters or bank statements from accounts that you did not authorize. It is also possible to receive a notice from a company that your information may have been breached. While this does not automatically mean that you are the victim of identity theft, it does mean that you should take action to protect your information and keep a lookout for any suspicious activity.
Of course, there are also physical signs such as your ID or wallet being stolen. If your information is stolen, it is crucial that you take action as soon as possible to prevent further financial problems.
Parties at Risk of Identity Theft
No one is exempt from identity theft. However, there are a few populations that tend to be more at risk including:
- Online shoppers: Unfortunately, online shopping puts you at risk of identity theft. This doesn't necessarily mean that you need to stop buying items online. It just means that you need to be more careful about the information you give and the companies that you buy from.
- Seniors: The FTC reports seniors as one of the most common victims of fraud. Seniors do not check their bank accounts or credit cards as frequently and might not notice unauthorized behavior. Seniors are also more likely to fall for phone call or email scams that put their personal information at risk.
- Children: You might be surprised to learn that children can be at risk of identity theft. In fact, children are at risk because they have a clean credit report and do not actively monitor their information.
- Travelers: If you spend a lot of time traveling, your information may be at risk. During travel, it is common to bring multiple forms of ID, especially if you are traveling internationally. Using your credit card in suspicious places, entering your information in a tampered with ATM, logging into your credit card account on an unsecured network, or leaving your personal information in your accommodations can all put you at an increased risk of identity theft.
It is important to keep in mind that anyone can experience identity theft. However, if you fall into one of the above categories, it might make sense to take extra steps to protect your identity.
Important Steps to Take Following Identity Theft
If you believe that you might be the victim of identity theft, it is important that you take action immediately. Waiting too long allows the criminal to continue using your identity for wrongdoing. Keep these important steps in mind if you ever believe that you are the victim of identity theft:
- File a police report: You will want to report the identity theft to the local police immediately. You may need a copy of the police report when informing creditors or lenders that the credit cards or debt are not yours.
- File a report with the FTC: You will also want to file a report with the Federal Trade Commission (FTC). You can easily do this by filling out a form online or calling the FTC at (877) 382-4357.
- Pull a copy of your credit report: If you notice suspicious activity in one financial area, chances are, you might have additional activity on other areas of your report. Pull a copy of your credit report and evaluate it for any inconsistencies. If you notice any other odd activity such as credit applications, a change of address, incorrect employer, or change of Social Security number, make note of it and report it too.
- Notify the appropriate party: Depending on the type of identity theft that you are victim to, you might need to notify additional departments. For example, if someone used your information to gain employment, you will need to report the incident to the IRS.If someone used your information to receive medical services, then you will need to notify your medical providers and health insurance carrier.
Immediate action is crucial when your information has been breached. Whether you notice an inconsistency on your credit report or you have been notified that your online information has been breached, follow these steps to protect your identity from further theft.
5 Ways to Protect Yourself From Identity Theft
Fortunately, there are steps that you can take to protect yourself from identity theft:
Keep Track of Your Mail
Avoid having your personal information stolen by mail by keeping close track of your mail. If you notice that you are missing multiple pieces of mail, be sure to report it to the U.S. Postal Inspection Service. If you notice that you are no longer receiving credit card statements or there is an increase in mail addressed to someone else at your address, it is important to look into it further.
Protect Your Social Security Number
You can protect your Social Security number by limiting the number of places in which you use it. You can also keep an eye on your information by pulling frequent credit reports. Each of the major reporting companies offers one free report to users each year. Take advantage of this free report and carefully review each report for any inconsistencies.
Protect Your Online Identity
A large percentage of identity theft occurs online today. While it might feel inconvenient to create new passwords for each new account you create, this is an important step in protecting your online identity. If you use the same password across all of your online accounts, one data breach will put all of your information at risk. If necessary, keep a hand-written database of your passwords to better remember them. Also, make sure you change your password frequently. Online users who frequently change their password are less likely to be the victim of a data breach.
Do Your Research
While you can get a lot of great deals online, it is also important to be careful about the sites you shop through. Although any site can fall victim to a data breach, there are a few that are more likely. Always do your research before doing business with a specific company. Ensure that they are using encrypted payment processes and that they are not holding onto your personal information. Never click on links that come through emails from people you don’t know. If the payment screen looks unprofessional, chances are that it is not the correct site.
Use Fraud Alerts
Fraud alerts are a great way to monitor your information if you have previously been the victim of identity theft or you have recently noticed odd activity. You can easily set up a fraud alert online. Enabling a fraud alert encourages companies or creditors to notify you if there is odd behavior on your account. You can also set up a credit freeze if you have recently been the victim of identity theft. Credit freezes make it more difficult for people to fraudulently use your information. The alert is provided to all new creditors when they receive a new application. With each new application, they must immediately call you and speak with you directly before allowing a new account to be opened.
How to Protect Your Child From Identity Theft
Anyone with personal information is at risk of identity theft, including children. As long as you have a Social Security number, your information can be used illegally. Identifying child identity theft can be even more difficult because children do not often have bank accounts or credit cards. In fact, many children may not realize that they have been the victim of identity theft until years later when they go to apply for a new job or take out a credit loan.
Fortunately, just as there are ways to protect yourself from identity theft, there are also things you can do to protect your child:
- Be vigilant: Things like receiving credit card bills or bank account statements addressed to your child can indicate that their identity has been breached.
- Pull a credit report: Ideally, your child will not have a credit report. However, if you suspect that your child’s information has been taken, then it may make sense to speak with the credit reporting agencies to understand the details of the credit report.
- Protect your child’s information: Even though your child does not have financial documents or bank accounts, it is just as important to protect their information. Avoid using their Social Security number on forms unless it makes sense that the requester will need that information.
- Teach children how to be safe: Teaching children about identity theft and safe online practices is an important step in preventing fraud.
These steps can assist you in protecting your child’s identity from fraudulent activity. Understanding the risks and how to protect your child’s information will ensure that their information stays protected.
Protecting Your Information with Identity Theft Insurance
Unfortunately, identity theft cannot always be prevented. While there are many steps in place to help you deal with identity theft, it can be expensive and overwhelming. It can take months, if not years, to figure out the details of your breached account. In the meantime, your credit and financial capabilities are affected. You could be prevented from taking out a car loan or obtaining student loans to pay for college.
Identity theft insurance may be an option for individuals who want to protect themselves against the financial risks of identity theft. Identity theft insurance is a type of coverage that protects individuals from the associated costs, including:
- The cost of pulling credit reports
- Phone calls to creditors and agencies
- Lost income or other wages due to the identity theft
- Legal fees
- Monitoring services
Depending on the extent of personal information that is stolen, overcoming identity theft can be costly and inconvenient. You may spend a lot of time on the phone with agencies attempting to understand the data breach. You might require legal assistance to demonstrate that a debt is not yours. Identity theft insurance can help you cover many of these costs.
How to Choose the Right Identity Theft Insurance
You will find that you have a lot of options available when choosing identity theft insurance. Consider the following when choosing the right plan for you:
- Deductible: Many insurance providers require that you pay a deductible before receiving coverage. Understanding what the deductible is and how it works will help you make your decision.
- Policy limits: It is also important to understand if there are any limits to the policy. What things are included? What does it not include?
- Restrictions: There may be additional restrictions, depending on the type of insurance. You will want to know what these restrictions are ahead of time so you can make an informed decision.
- Pricing: Of course, you will also want to evaluate the cost of the coverage. A cheaper policy does not always indicate that it is a better choice. It is important to weigh cost with what is covered.
Protect yourself and your family from the risk of identity theft by understanding the warning signs that your information has been breached. By understanding how your information is stolen and used, you can take the necessary steps to protect this valuable information.