Everyone has heard of identity theft. After all, it has been a prevalent topic for the last 20 years. In those years, have you learned how it can impact you, or have you become fatigued by the topic? Today, more than ever, families need to understand how scams can dramatically impact financial wellness and lead to identity theft.
You may be in a very different situation than you were when you first heard about identity theft. You may have accumulated more wealth, or your young children may now be entering their teen years or young adulthood. You may utilize more digital transaction methods and communications. You may now be retired and living on a fixed income.
With all these life changes, it’s more important than ever to know the Red Flags of Identity Theft. Let’s begin with the basics and review what identity theft is and how it is perpetrated.
What is Identity Theft?
Identity theft is a crime where someone obtains another person's personal information without their permission or knowledge. It is then used to commit fraud or other illegal activities. Names, addresses, birthdates, Social Security numbers, credit card numbers, and bank account information are commonly targeted.
Identity theft can have a wide range of negative consequences for the victim. This includes financial loss, damage to credit scores, legal problems, and emotional distress. Identity thieves use the stolen information to open new accounts, make unauthorized purchases, obtain loans, and file fraudulent tax returns. The victim may not know that their identity has been stolen until a creditor or law enforcement agency contacts them.
Identity Theft by the Numbers
Identity theft is a growing problem globally, and statistics show that it’s becoming more prevalent every year. Below are some statistics about this crime.
In 2022, there were over 1.1 million reports of identity theft in the United States alone. (Federal Trade Commission)
Identity theft cost Americans over $43 billion in 2022. (Javelin Strategy & Research)
The most common type of identity theft is credit card fraud, accounting for 40% of all reported cases. (Federal Trade Commission)
In 2022, nearly 6% of all reported identity theft cases involved government documents or benefits fraud. This includes using stolen information to file for unemployment benefits. (Federal Trade Commission)
Children are also at risk of identity theft, with over 1 million children having their identities stolen each year. (Javelin Strategy & Research)
In 2020, the COVID-19 pandemic led to a significant increase in identity theft. Fraudsters used stolen information to apply for government assistance programs and unemployment benefits. (Federal Trade Commission)
It can take an average of 6 months and 100-200 hours of work to resolve an identity theft case. (Federal Trade Commission)
Around 60% of identity theft victims experience emotional distress as a result of the crime. (Identity Theft Resource Center)
Types of Scams
Below are some common ways in which people can become victims of identity theft.
Phishing involves sending fraudulent emails, texts, or other messages that appear to be from a reputable source. This could include a bank or a credit card company. The messages usually contain a link to a fake website, where the recipient is asked to enter their personal information. This information is then collected by the fraudster and used for identity theft.
Data breaches occur when hackers gain unauthorized access to a company's computer system and steal sensitive data. Social Security numbers and credit card information are often stolen then sold on the dark web.
Scammers steal credit or debit card information by placing a small device called a skimmer on a card reader. This can occur at an ATM or a gas pump. The skimmer reads the card's magnetic strip then harvests and stores the information, which can then be used for identity theft.
Social engineering involves tricking people into revealing their personal information by posing as a trusted individual or organization. This could include a bank or government agency and be done through phone calls, emails, or even in person.
Physical theft involves stealing personal information, such as wallets, mail, or documents, from a person's home or car. This information can then be used for identity theft.
Unsecured Wi-Fi Networks
Using unsecured Wi-Fi networks makes it easy for hackers to intercept sensitive information, such as login credentials and financial information.
How to Protect Your Information
Avoiding identity theft involves taking steps to help protect your personal information. Use strong passwords, be cautious about giving out personal information online, and check your credit reports and financial statements regularly. Most importantly, stay alert to the signs of identity theft.
If you suspect that your identity has been stolen, it's important to take action immediately. As a Smarter, Smart or Fresh Start checking account holder, you have access to identity protection benefits. Our identity theft protection specialists are trained to fully manage your identity recovery and are standing by to help.