Don't Let Identity Theft Consequences Ruin Your Life

What is identity theft?

Identity theft is when someone steals your personal identifiable information (PII) and uses them for their own gain. This could be your full name, date of birth, address, or even your Social Security number (SSN). With any of these data points, a criminal can do serious damage to your finances, credit history, and career, or even leave you with a criminal record.

Identity left is not just something that happens in the movies— it can happen to anyone and is a very real threat with identity theft consequences ranging from mildly annoying to utterly devastating.

It's also a crime that happens more often than you think. In fact, identity fraud accounted for 68% of fraud cases in 2022. Almost a quarter increase on the previous year.

Most common types of identity theft

Once your information is in the hands of a bad actor, there are many ways they can take advantage of it. Here are some examples of the most common ID theft scams:

Financial identity theft

With your PII a criminal can drain your bank account, open new accounts in your name, apply for loans and credit cards, or purchase items under your name. Victims of financial ID theft can be left in serious debt or with a severely damaged credit rating.

According to the ITRC 2023 Consumer Impact Report, identity crime victims reported losing larger amounts of money than in previous years, with six-figure losses common.

Medical identity theft

Medical identity theft happens when someone uses your name, SSN, or health insurance information to obtain medical services. They can get prescription drugs, buy medical devices, or file fraudulent claims.

This is potentially the most dangerous type of ID fraud because if the criminal's health information is mixed with yours, it could affect the care or benefits you're able to receive. Or worse— this is where identity theft consequences could mean life or death should doctors make incorrect decisions for your health or medical treatment.

Criminal identity theft

Ok, so identity theft is a crime to begin with, but criminal identity theft refers to instances when the ID thief goes on to commit additional crimes and provides law enforcement with your personal information. For example, they may steal a rental car using your driver's license.

This can result in the identity theft victim being arrested or left with a criminal record. These identity theft consequences can lead to more issues such as trying to clear their name, a damaged reputation or being unable to get a job.

Child identity theft

Child ID theft is becoming one of the most common types of identity theft with approximately one out of every 50 children victims in the USA alone. Unfortunately, kids represent a blank slate with no bad credit rating to deal with making it easy for criminals to apply for credit or take out loans in their name.

The use of a child's Social Security Number can go undetected for years and the identity theft consequences are only felt when the youngster grows up and tries to apply for a driver's license, a college loan, or their first credit card.

Tax identity theft

Tax identity theft happens when someone files a tax return using your personal information and SSN. E-filing has made tax ID theft even easier. Criminals will file the forged tax return electronically early before the victim.

This way they can receive the refund before the IRS processes all the filing for the season. By the time the fraud is realized, the scammer will have cashed the check or withdrawn the funds from the bank.

Unemployment ID theft

One of the most common types of identity theft involves the criminal claiming unemployment benefits in your name. They may use your driver's license or SSN to make claims in your name but switch the address or bank details to their own to receive the checks.

Account takeover fraud

Account takeovers (ATO) has seen an eye-watering increase recently. According to Sift's Q3 2023 Digital Trust & Safety Index, ATO attacks jumped by 354% year-over-year in Q2 2023.

ATO is when a cybercriminal hacks into your online accounts or gains access using stolen usernames and passwords. It can affect any type of account, from email to online banking, phone contracts, store loyalty cards, e-commerce accounts, and even social media. It's estimated that more than 50% of all ATO attacks originate via social media.

In fact, the 2022 Consumer Impact report by the Identity Theft Resource Center (ITRC) found that social media account takeover has risen by more than 1,000% in the last year.

Once the criminal signs into the victim's online accounts, they can make changes to the personal details such as the address and passwords, request a new card, or add an authorized user. In cases of social media accounts, criminals may use your account to impersonate you and scam your contacts.

How does ID theft happen?

Getting a hold of someone's personal data is so much easier than it used to be. It's no longer just a case of someone rifling through your trash to find your old bank statements. There are so many other ways for your personal information to fall into the wrong hands.

Let's check some of them out.

Data breaches

Data breaches are the number one cause of identity theft. More than six million data records were exposed through data breaches during the first quarter of 2023. According to IBM's Cost of a Data Breach Report 2023, the global average cost of a data breach in 2023 was $4.45 million. That's a 15% increase over the last three years.

Data breaches occur when cybercriminals hack into a company's computer system and steal stored information. The data exposed will depend on the company, but it can include anything from your name, email address, physical address, passwords, credit card details, health data, insurance details, or SSN.

Phishing scams

Phishing is a scam using a variety of social engineering methods to try to trick people into unwittingly handing over their private information to a bad actor. They can take the form of emails, voice calls (vishing), or SMS (smishing).

The criminals pretend to be someone the victim knows well or a representative of a company the victim has an account with. The threat actors may ask you to fill out a form or click on a link which may lead you to a fake website designed to steal any data that you enter.

READ MORE: Are You Aware of the Most Common Phishing Attacks?

Spyware

Spyware is a type of malware (malicious software) used by cybercriminals often as part of a phishing email. The email may contain a link that when the victim clicks on it, downloads the spyware onto their computer. This allows the criminal to monitor their computer use or record keystrokes which could easily lead to identity theft.

Stolen wallet or phone

A wallet or purse is a treasure trove of information. Not only do you lose any cash inside it, but you also lose your credit cards and IDs. Items such as a driver's license or a national ID card can include your full name, address, date of birth, signature, and a photo— everything a criminal needs to commit identity fraud of all sorts.

These days our phones are just as valuable as our wallets, if not even more so. We're now using our phones for everything, to access emails, online banking, and e-commerce. If a criminal gets hold of your phone or gets access to it via hacking, they can easily steal your personal data and passwords getting access to every app and every account you use.

Credit card “skimming”

Skimming devices can be placed on vulnerable ATMs and card readers. These devices steal your credit card account information and the fraudster uses the details to make fraudulent purchases online or clone your card.

Credit card is the one of the most common types of identity theft with a 77% increase in the number of US cards affected in the first half of 2023.

Image source: FICO

Identity theft consequences

The consequences of identity theft can be significant and long-lasting. Having your personal details used in fraud or other criminal acts can impact the victim's employability, access to medical care or government benefits, ability to get credit, and so much more.

According to the Federal Trade Commission, there were 2.6 million reports of fraud as of September 2023, with 24% of those reporting a financial loss.

Identity fraud was named as the most common type of fraud with the number of forged driver's license's up by 42% from the previous year. Repairing the damage can be extremely time-consuming and costly.

But it's not just the financial aspect, identity fraud consequences can seriously affect a person's mental and emotional state.

The 2023 report by the Identity Theft Resource Center (ITRC) looked beyond the financial implications of identity theft to consider the emotional, physical, and psychological impact experienced by victims.

The number of victims who contacted the ITRC in the past year for help and who said they have considered suicide as a result of having their identities misused has doubled since 2021 to 16%. If you consider that the national average for non-homeless U.S. residents who contemplate taking their lives is 5%, it paints a startling picture.

Here's a quick overview of identity theft consequences and how they can ruin your life:

• Your life savings could disappear overnight.
• You could be left with mountains of debt and a credit score in tatters.
• Your professional or personal reputation could be destroyed online and offline.
• You could receive incorrect medical treatment with could have serious health consequences or be fatal.
• You could be arrested for a crime you didn't commit.
• A criminal record could cause issues with background checks, getting employed, or going to college.
• Your personal information could be for sale on the Dark Web forever.
• You could lose your tax refund or be audited by the IRS causing additional stress.
• It could affect the rest of your family- your kid's college fund could be gone, or the stress and financial worries could have an adverse effect on your relationships.
• You might even lose your home.

How to prevent identity theft

There is no way to 100% safeguard your personal details but there are certain things you can do to make it harder for identity thieves, avoid the most common types of identity theft, and the harrowing identity theft consequences.

Freeze your credit

Freezing your credit with the three major credit providers (Equifax, TransUnion, and Experian) means no new lines of credit can be opened in your name. It's easy and free to do. You can easily unfreeze your credit when you need it and re-freeze it again to keep it secure.

Safeguard your ID

Whether you're in the States, in the UK, or in Europe, your Social Security number, National Insurance number, or Personal ID number is unique to you. It's like the key to your existence within society. So guarding it as best you can is crucial. Be sure to store it securely and shred any paperwork that contains your ID numbers.

Watch out for phishing attacks

If you receive any emails or phone calls pretending to be from government entities or businesses it pays to be skeptical. Scammers are getting more sophisticated and can create emails that appear to be from legitimate email addresses.

Instead of clicking any links within the email, open a new browser tab and visit the website directly, or initiate a callback to the company. Also, be wary of any email attachments as they may contain malware or spyware.

Password best practice

Don't reuse the same password for multiple sites. Out of the victims who had contacted the ITRC for help, 56% of them admitted to re-using the same or similar passwords for all of their accounts. If one site is compromised, then all of your accounts are. A password manager is the easiest way to create and store unique complex passwords.

Add 2-factor authentication

Don't rely on a website's own security questions to keep your accounts safe. It's not that hard to find out your mother's maiden name, what street you grew up on, or a first pet's name. Most of this information can be found on a person's own social media– be careful what you post! Adding 2-Factor Authentication (2-FA) adds an extra level of security to your accounts.

Be proactive

If you are alerted to a data breach at a company you have accounts with, don't wait to see what happens. It's much better to air on the side of caution. Better to be safe than sorry. Change any passwords that may have been compromised and keep a vigilant eye on your accounts.

If you're wallet or purse disappears, assume the worst and cancel your bank cards immediately, order new ones, and alert your bank and creditors. Next step, alert your state Department of Motor Vehicles (DMV) to report a stolen driver's license and inform your local law enforcement.

Conclusion

Identity fraud consequences can be long-lasting for you and your loved ones. The best protection against identity thieves is to educate yourself on the most common types of identity theft and how they happen in the first place. Being aware of how bad actors can get access to your personal data means you can better control how you share and store that information.

Regularly checking your credit report or freezing your credit until you need it, having 2-FA and strong passwords are the best ways to significantly reduce the risk of being exploited and the impact identity theft could have on your life.

Keeping up to date with the latest cybersecurity dangers will help you stay one step ahead of the cybercriminals. Check out the Hoody Privacy Hub for more articles on how to stay safe online and protect your data.