Identity theft can happen to anyone and lead to a number of problems. It can damage your credit and disqualify you from loans, stall your tax refund, and drain your bank account — to name but a few outcomes. In more severe cases, it can even get you wrongfully arrested.
How did we get here and where are we going? Here’s a look at the facts surrounding what has become a booming industry in crime.
What is identity theft?
The 2018 Identity Fraud Study released by Javelin Strategy & Research determined that 16.7 million people in the U.S. were victims of identity theft in 2017, up from 15.4 million in 2017, with $16.8 billion total stolen.
According to the Department of Justice, identity theft (also called identity fraud) occurs when anyone wrongfully obtains your personal data to be used toward a fraudulent end.
Identity thieves want information the way bank robbers want cash. They’re keen on bank account numbers, credit card numbers, social security numbers, medical records, passwords, and just about any other piece of data that can enable access to your identity, particularly where financial history or opportunity is concerned.
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How do I know if I'm a victim?
You should always be vigilant, but take note from the FTC's list of red flags:
- Withdrawals from your bank account that you or other authorized users did not make
- Inquiries from debt collectors about debts you didn’t incur
- Merchants declining your check
- Unfamiliar accounts or charges on your credit report
- Bills for services you didn’t use
- Not receiving your bills or other mail
- Your healthcare company rejects a medical claim you’ve made citing you’ve maxed your benefits when you have not, or won’t cover your claim because your medical records indicate a condition you don’t have
- Notice from the IRS that more than one tax return was filed in your name, or that you’ve earned income from an employer you didn’t work for
- Notice from a company that stores your data that they’ve been breached.
What are the most common types of identity theft?
The DOJ cites the most common forms of identity theft as follows:
- "Shoulder surfing": A thief will watch you punch in info on your computer or phone
- Pre-approved credit cards that haven’t been shredded: Thieves will open accounts in your name
- Spam emails: Cybercriminals will blast out fake emails to solicit sensitive data from consumers
- Tax refund fraud, wherein a thief files a tax return with the Internal Revenue Service in your name to collect your refund.
Is the Equifax data breach still a problem?
One of the most catastrophic data breaches in the history of consumerism happened just last year at credit reporting giant Equifax, which exposed the personal information of 145 million Americans. And the insidious thing about this type of data is that it doesn’t die, frankly, until you do. That means that if obtained, thieves can use this in numerous attacks, and they can do it tomorrow — or in 20 years.
How can we keep our credit safe?
After the Equifax disaster, consumers have been encouraged to freeze their credit with each of the three credit bureaus. You can do that with Equifax, Experian, and Transunion.
You should also create an account with the Social Security Administration — before a thief does it wrongfully in your name.
How can we ensure our tax refund isn’t hijacked?
Filing early is one way to beat the fraudsters who can only successfully file a tax return with the IRS in your name if you haven’t already completed the task. If you are the victim of tax refund fraud, you can fight it — but it will take time and work.