Identity theft can feel like a personal violation as thieves infiltrate accounts and damage your finances and reputation. I know how stressful and overwhelming identity theft can be from helping thousands of victims in my career as a cybersecurity expert.
With identity theft on the rise, I want to provide an in-depth guide to help you understand exactly what happens when your identity is stolen, how to resolve issues, and smart ways to reduce your risk.
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The Startling Scale of Identity Theft Today
Identity theft has reached epidemic proportions with nearly 15 million victims in the US just last year. That‘s an alarming 45% surge compared to 2020 according to the Federal Trade Commission.
Major data breaches are playing a big role in this identity theft explosion. When companies like Uber, Equifax and countless others get hacked, our names, Social Security numbers, birthdays and other sensitive details get exposed.
Just look at these jaw-dropping statistics:
- The 2017 Equifax hack impacted 147 million people – nearly half the US population!
- 57 million Uber riders and drivers had their personal information stolen in 2016.
- Over 1.1 billion records were compromised in data breaches in 2021 according to RiskBased Security.
With our data circulating in hacker networks, it‘s no wonder fraudsters have a field day opening fraudulent accounts and causing financial chaos.
But data breaches are far from the only way identity theft happens. Here are some other common techniques criminals use to steal your personal information:
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Phishing scams – Deceptive emails and text messages impersonating banks and companies are designed to trick you into revealing login info. Over 1.8 million phishing sites were created in 2021. I‘ve seen phishing lures become highly personalized and convincing. Always think before clicking!
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Skimming devices – Fraudsters attach card readers on ATMs and gas pumps that silently steal debit/credit card details. One major US skimming ring caused $68 million in losses in 2021. Also beware of dishonest restaurant staff skimming your card.
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Shoulder surfing – Criminals peer over your shoulder in public places to view you entering your PIN or password. Avoid PIN pads facing outward!
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Synthetic identity theft – Scammers create new fake identities partially matched to your address and SSN. This is surging lately and contributed to $6 billion in losses last year.
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Child identity theft – Shockingly, one million children were victims of identity theft in 2020. Childrens‘ unused SSNs are attractive to crooks. Monitor your kids‘ credit too!
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Social media identity cloning – Thieves use your pics and info to build identical social media profiles, then sell access to criminals seeking legit-looking accounts for scams.
As you can see, identity thieves are coming at us from all angles with a variety of devious schemes. Next, let‘s explore what types of havoc these scammers create once they have your information.
Top Financial Schemes Identity Thieves Perpetrate
Armed with your personal data, identity thieves can destroy your finances in many ways. Here are some of the most common frauds to be aware of:
Damaging Your Credit Score
A top goal is creating new credit cards and loans in your name. As they rack up debt and miss payments, your credit score plummets. A bad credit score means higher interest rates, insurance premiums and loan denials.
Repairing credit damage from identity theft takes tremendous time and effort. On average cardholders spend 330 hours fixing credit fraud issues.
Stealing Your Tax Refund
Filing a fake tax return to steal your refund is very common. Criminals have your SSN, so they can file first and have your rightful refund deposited into their own account. This can amount to thousands lost.
An incredible peak of 4.4 million Americans were victims of tax identity theft in 2016. The IRS has added more verification to reduce this, but I still see it regularly in my practice.
Masquerading as You Online
Once identity thieves take over your email or social media accounts, they can leverage these to reset passwords on your other critical accounts like banking, retirement and investment accounts.
With access to your accounts, thieves can monitor your activity for months undetected, gathering information for larger future thefts.
Medical Identity Theft
Your health insurance information gives thieves free reign to obtain expensive medical services billed to your plan. This leads to false records that could impact your healthcare.
Shockingly, medical identity theft affected over 45 million victims in 2020, totaling over $6 billion in fraudulent charges according to Experian.
Stealing Home Equity
Deed and mortgage fraud schemes are used to secretly transfer ownership of your home and drain the equity you‘ve built up. Title locking services can help prevent this type of theft.
Opening Fake Businesses
Thieves will open business accounts or corporations in your name and then rack up debts. You can be left dealing with unpaid taxes and legal issues.
Money Laundering
Your identity could be sold on the dark web‘s black markets and used by organized criminals for laundering illicit funds obtained from activities like drug trafficking and cybercrime.
This type of identity theft is rare but very damaging due to the legal complexities it creates for victims. A student in Pennsylvania struggled for years to clear her name after a foreign cartel used her identity to launder over $3 million dollars.
Driver‘s License Identity Theft
Scammers may use your identity to apply for a driver‘s license in your name but with their photo. They can then use this ID for everything from writing bad checks, getting a passport, to concealing their true identity if stopped by law enforcement.
How Identity Theft Can Damage Your Health and Wellbeing
Identity theft causes severe stress and emotional turmoil for victims. According to an AARP study, 1 in 5 victims develop major depressive disorder due to identity theft. Additional consequences include:
- Loss of medical coverage due to insurance fraud
- Inaccurate medical records that put your health at risk
- Ongoing anxiety about when thieves might strike again
- Hundreds of hours spent resolving issues causing lost time with loved ones
- Post-traumatic stress impacts like inability to sleep and feeling helpless
For parents, the revelation that a child‘s identity has been stolen often produces deep feelings of guilt and failure in their role as protector.
The emotional impacts should never be minimized. Don‘t hesitate to seek counseling or join a support group. You can heal and regain your sense of security.
If You‘ve Been Targeted: Essential Next Steps
I know learning your identity has been stolen feels like the walls are crumbling down. But take a deep breath. Millions have walked this road before and made it to the other side. Here are the key actions I recommend:
Act Quickly to Contain the Damage
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Immediately notify your bank and creditors. Have them shut down compromised accounts and flag any new charges as fraudulent.
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Change all account passwords, security questions and PINs to prevent further access.
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Sign up for credit monitoring if you haven‘t already. It provides alerts whenever new accounts are opened.
Build Your Case and Report the Crime
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Request fraud alerts with the three credit bureaus. This warns creditors to verify your identity when new accounts are opened.
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Obtain your free annual credit reports. Go through them with a fine tooth comb looking for any unfamiliar accounts or charges.
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File a detailed identity theft report with the FTC and print a copy. It will help with fixing credit issues.
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Report the theft to your local police to obtain an official law enforcement report. Creditors often request a copy.
Repair the Damage
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Contact every company where unauthorized accounts were opened in your name. Provide official documentation that it‘s identity theft. Ask to speak with fraud departments if needed.
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Request closure and removal of all fraudulent accounts, charges and inquiries from your credit reports. This process may take persistence over months.
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If debts wind up in collections, inform collectors the accounts are fraudulent and you are not liable for the charges. Cease contact is required once you submit your reports.
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Update your SSN with employers if your W-2 was impacted. You may need to directly notify the Social Security Administration and IRS.
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Change your driver‘s license number if it was compromised. Cancel and replace any stolen government IDs like passports.
Remain Vigilant going Forward
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Sign up for post-theft credit monitoring to alert you of any new suspicious credit inquiries or accounts. It can take years for some synthetic identity theft to surface.
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Periodically check your credit reports with Equifax, Experian and TransUnion for inaccuracies that need correcting. You are entitled to free reports from each bureau annually.
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Monitor all financial account statements routinely for any unrecognized charges. Report anything suspicious immediately.
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Adjust privacy settings on social media accounts to limit personal information visible to the public. Be selective with who you connect as a friend.
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When possible, opt to have paperless accounts and utilize electronic statements to prevent stolen mail issues.
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Strongly consider enrolling in an identity theft protection plan. These services provide dedicated theft monitoring and insurance to help cover costs.
Smart Ways to Avoid Becoming a Victim in the First Place
Here are proactive steps I advise to minimize your risk of identity theft:
Safeguard Your Personal Information
- Shred documents containing sensitive information before disposal
- Protect your Social Security number – don‘t carry your SS card in your wallet. Only provide when absolutely necessary.
- Limit use of your debit card which lacks the fraud protection of credit cards
- Utilize a PO Box or locked mailbox to avoid stolen mail
- Password protect smartphones and lock when not in use
Practice Online Safety
- Install comprehensive antivirus, firewall and anti-spyware software
- Avoid using public Wi-Fi for banking, shopping or submitting personal data
- Check URLs carefully to avoid fake lookalike sites. Use encrypted HTTPS websites only.
- Never click email links asking you to update or verify account info
- Use strong unique passwords on each financial account
- Enable multifactor authentication on as many accounts as possible
Monitor Your Credit and Accounts
- Check credit reports from Equifax, Experian and TransUnion at least once a year
- Set up transaction alerts on credit and debit cards to detect unauthorized charges
- Freeze your credit to block thieves from opening new accounts
- Subscribe to credit monitoring services to receive alerts if new accounts are opened
Remain Vigilant Against Scams
- Always think before clicking on links or attachments in emails and texts asking for your info
- Use caution with phone calls demanding immediate payment or account updates
- Keep device operating systems, browsers and antivirus software updated promptly
Consider Identity Theft Insurance
- Identity theft insurance can pay for certain costs if you do become a victim like lawyer fees, lost wages for time off work, and reimbursement for stolen funds
Don‘t Let Identity Thieves Steal Your Peace of Mind
I hope this guide has helped you understand the many potential impacts if your identity is compromised. While stories of identity theft can be frightening, there are many preventative measures you can take and resources to help if you ever become a target.
Please reach out to me if you need any help confronting identity theft or safeguarding your accounts. Don‘t let fear of identity thieves rule your life. Just use common sense precautions and monitor activity routinely.
Stay vigilant out there!
