What Is Identity Theft

by Christina Vukova

We’ve all been punished for things we didn’t do as kids. However, as you get older, you might begin wishing you could get away with just a scolding from mom. Thankfully, the “it wasn’t me, but him” argument doesn’t pass in most establishments. An ill-wisher will need much more to fool the bank that you took out that loan and not them.

That’s where other people’s information becomes a sort of twisted commodity. As more people fall victim to this crime, it begs the question – what is identity theft? How likely is it that you’re at risk?

You may be surprised at how common this crime actually is. In 2018, cases increased by 8%, amounting to 16.7 million consumers in the U.S. alone. That means 1 in every 15 people has experienced some form of identity fraud in the last year. It also resulted in $16.8 billion being stolen.

The best way you could avoid becoming a number in these statistics is by learning more. Being aware of the methods used by criminals is your first line of defense. This will give you some quick, actionable ideas that will massively improve your ID’s safety. So let’s dive right in!

What Does Identity Theft Mean?

By definition, identity theft is the illegal practice of using someone else’s personal information, usually for financial gain. Impersonators often hunt for driver’s license or Social Security numbers with the intention of taking out loans or purchasing merchandise. There’ve also been cases of criminals presenting stolen credentials to the police.

Speaking of law enforcement, you may be wondering what type of crime identity theft is. Thankfully, it’s a felony and often results in incarceration for several years. This will also depend on the impact it has had on the victim’s life.

Despite what the penalty for identity theft is, fraudsters keep coming up with new ways to steal your data. Let’s take a look at some of the more common scams.

1. Account Takeover

This method relies on using personal information to gain access to already existing user profiles. It usually focuses on withdrawing funds from bank accounts or running up huge bills. Once a criminal has taken over, they can change the email address associated with the profile, making it harder to realize what’s happening. This fraud is quite popular, as online transactions are becoming the more common method of payment.

2. Tax-Related Identity Theft

Once the scammers get their hands on your name and Social Security number, they could file your tax return before you do. It’s also not uncommon for them to alter your income and withhold numbers in order to get more money. The good news is you can protect yourself and get a Tax ID pin number. Thanks to measures like this, there’s been a 57% decline in 2017 compared to 2015, saving taxpayers more than $20 billion.

3. Medical Identity Theft

The goal of this scam is not always money, but medical services or prescription drugs. In some cases, fraudsters may obtain expensive equipment and sell it on the black market. To avoid falling a victim to this scam, you need to protect your insurance member number and the identification number assigned to you by your healthcare provider.

You can do that by reviewing the claims you get in the mail. You can also go online to monitor all medical activity done in your name. Keep in mind this is one of the hardest scams to notice.

Almost 30% of the data breaches in 2017 were related to healthcare. Now that you know what medical identity theft is, make sure to take the needed steps and keep your personal information safe.

4. Debit or Credit Card Fraud

This is one of the better-known scams. In this age of online and contactless payment, losing your card can seriously impact your finances. However, even without access to your physical card, fraudsters can still make unauthorized transactions – if they get their hands on your account number, PIN and security code.

Regularly checking your card’s transfers is the best way to protect yourself from identity theft. You should also make sure to never submit your payment information to shady websites.

5. Driver’s License Theft

This scam is very straightforward and is actually the most common type of ID fraud. Your driver’s license might be sold off to a person physically similar to you – or the thief could use it to buy items under your name.

In case they’re caught for a traffic violation, you might even find yourself wanted by the police. Which in turn can affect your insurance prices. So keep a close eye on your driver’s license and consider a fraud alert on your credit file to protect yourself.

6. Online Shopping Fraud

There are two ways as to how this type of identity theft is committed.

One breed of scammers would target shopping websites, set up a profile and try to seem genuine for a while before proceeding with their scheme. The other would take over existing client accounts to purchase goods, using the original owner’s payment information. Conveniently, they’ll have the actual products delivered to a different address.

This fraud has become more common – in 2017 there were 30% more cases in comparison to the previous year. To protect yourself, avoid reusing your password and filling in your information in shady sites – no matter how enticing the discount they’re offering is.

7. Synthetic Identity Theft

According to the FTC, this is the fastest-growing type of ID fraud and it amounts to about 85% of all stolen identity cases. If a scammer obtains someone’s name, address, phone number or, especially, Social Security number – they’ll create a new personal file with both real and fake data.

Then, these identities can help the scammer take out loans, access already available financial services, or apply for jobs. They can also simply sell them on the dark web. If you start receiving phone calls or emails, addressing you with a different name, that may be a sign your data has been stolen.

Who Are the Most Common Victims?

Now that we’ve gone through the definition of identity theft and some of the most popular scams, let’s see which groups of people are more likely to be targeted.

1. Young Adults

The highest risk group for identity scams are young adults. Research showed 40% of fraud victims in 2017 were between 20 and 29 years old. One of the reasons is that they tend to use cards as a payment method regularly, allowing fraudsters more chances to steal their data.

Young people are also more likely to reveal personal information online. This can happen through social media or when shopping from their smartphones while using public (and unprotected) Wi-Fi spots.

2. Seniors

Seniors also tend to experience identity theft18% of victims in 2017 were over 79. Elderly people lost much more on average – $1,092 in comparison to $400 for young adults.

This group is preferred by scammers, as seniors are used to providing their medical and insurance data. They also tend to be less aware of the various methods a fraudster may use.

As they’re less likely to need credit, elderly people don’t monitor their accounts as closely. This makes them an ideal target for identity theft and fraud. Scammers often establish relationships over the phone or by email and manipulate them into sharing personal information. More than 30% of bank account takeovers are of people over 60.

3. Children

We’re also seeing a rise in child identity theft – Experian studies indicate this crime can affect 1 in 4 kids under 18 years of age. Medical and school information is getting digitized and youngsters are showing up online at an earlier age. This allows hackers more ways of getting their hands on valuable personal data.

A child’s Social Security number might seem next to useless at first. In reality, it can be used to take out loans or government benefits and this can remain unnoticed for years. Reports show that in 2017 more than 1 million children in the U.S. suffered identity fraud – resulting in $2.6 billion in losses. It makes sense, then, to teach your kids to be cautious about revealing personal information.

4. High-Income Earners

People who make more than $75,000 represent 10% of all fraud victims. The reasoning behind it is clear – they are more profitable targets.

Wealthy people also often use credit cards and have multiple accounts, which gives thieves more access points.

5. People with Weak Passwords

If your password is your birthday or, even worse, simply “password” – you may want to consider something more original. A computer would need less than 10 minutes to crack that. And, if you use the same password for more than one website – you’re at big risk of making it into the ID theft statistics.

Who’s Most Likely to Be the Perpetrator?

Now that we know what identity theft is, you may be wondering who would commit such a crime.

We tend to imagine such a person as a hardened criminal without morals. However, the average fraudster has no history of crime, is between 31 and 45 years old and a bit more likely to be male.

Even more unexpectedly, identity theft stats reveal it’s fairly possible you know the scammer – especially in cases of child or senior fraud.

If your kid’s SSN was stolen, there’s a 33% chance it was a family friend who did it… and an 18% chance it was your spouse. Seniors can often be coerced into sharing their data by those caring for them.

What Is the Best Protection If You Already Are the Victim of Identity Theft?

If a fraudster has already gotten their hands on your information, you need to take action as soon as possible. Knowing what an FTC identity theft report is and how to use it may be crucial for damage control.

You can use this report to:

  • Prove that you were a victim of the crime
  • Stop a company from collecting debt
  • Protect credit scores
  • Place an extended fraud alert on your account
  • Permanently block fake information from appearing on your credit reports.

Additionally, we suggest visiting identitytheft.gov – the government’s website, specifically designed to handle such cases. You can get a personal recovery plan and other information to help you. However, looking up more identity theft articles may also be useful when getting to know what your options are.

How Can Your Information Get Stolen?

Alright, so we already know the definition of identity theft. We also discovered why scammers may need your information. Now let’s see how they can actually obtain it.

Physical ID Theft

First, let’s look at the good old-fashioned physical ID theft. It’s no longer as popular as it used to be, but it’s still worth a mention.

1. Dumpster Diving

This method relies on discarded sensitive information. Thieves usually lurk around business trash, dive into the dumpster and look for anything that could be useful – paperwork or mail. Shredding all personal documents is a key way to protect yourself.

2. Shoulder Surfing

If someone’s standing next to you while you’re filling in documents or providing information over the phone, they may be trying to steal it. Always keep an eye on your surroundings when you’re using personal data.

Digital ID Theft

Digital data breaches are a more common way of extracting valuable personal information. There are several distinct approaches a scammer may use.

1. Phishing

Has a Nigerian prince ever contacted you with promises of riches in exchange for some personal information? If you didn’t respond to that email – congrats, you’ve successfully fended off a phishing attack!

In this type of ID fraud, criminals usually present themselves as a trustworthy institution or person. They can reach out to you by email, phone or even in social media and request your data or persuade you to open malicious links and attachments. After all, it’s much easier to fool a person than to successfully bypass a computer’s defenses.

Some phishing attackers use social networking to learn more about their victims beforehand. When they finally reach out, the danger may not be so plainly obvious.

Fraudsters also use a technique called reconnaissance so the user won’t notice the signs of identity theft. When attacking businesses, they phish for any information about important employees and even the company’s lingo in order to be able to write believable emails.

Attackers may go so far as to create a website, visually similar to that of the organization they’re impersonating. They also often use misspelled domain names to fool people into opening their links.

A couple of variations have managed to spring forth from this type of ID theft scam. These include:

  • Spear phishing – fraud that targets specific people. The scammers do research on their prey to make the communication seem authentic.
  • Whaling – an attack aimed at big companies or high-level employees with the goal to obtain large sums of money.
  • Evil Twin Wi-Fi – a wireless network that mimics an authentic one, but gives criminals access to the transmitted information.
  • Clone phishing – a copy of a legitimate email you’ve previously received, but with altered and malicious links and attachments.
  • Vishing – voice messages informing you of suspicious activity in your bank account and urging you to reach out through a fake number and verify your identity.

Despite the long list, there still are ways to protect yourself from this type of ID theft. The first step is being aware of what phishing messages usually sound like. Additionally, you can use an email filter and avoid potentially malicious websites.

2. Malware

Malware is one of the most popular means of a cyber attack.

Malware is any program, designed to harm your computer. It can be installed on your device through a USB or CD drive, and more commonly – via the internet.

The thing about malicious links and infected attachments is they look like normal ones. You won’t even realize your computer has been infected unless you know how to scan for them.

There’s a wide variety of malware programs, but facts point to Trojan horses and spyware as the most likely culprits when it comes to identity theft.

  • Trojan horses usually look like normal programs, except they create a backdoor for the attacker once installed. That allows them to access all the information in your computer and even remotely change settings.
  • Spyware will secretly record what you do on your computer and collect your personal data and account login information.

To protect yourself from malware, it’s highly recommended to be careful with the websites you visit and the files you download. Scanning your system with a good antivirus program can also come in handy.

3. Keylogging

Keylogging is by definition almost exclusively a tool for identity theft. Although it can be used for legitimate monitoring in business, criminals have realized its potential and hijacked it for less than noble purposes.

Keystroke logging is usually a malicious spyware program that records all keystrokes on a computer without the user’s knowledge. It can capture your personal details, payment information or passwords and send it to criminals. It’s not hard to see why this could be a problem.

Detecting these programs can also be hard, as they don’t really pop up on your desktop. One sign you may be the victim of this ID scam is if there’s a delay in symbols appearing on the screen as you type.

The good news is there are several antivirus programs that can find and remove the keylogger. To avoid getting infected in the first place, the best measure you can take are to avoid:

  • Leaving your devices unlocked
  • Opening attachments from people you don’t know
  • Clicking on suspicious ads and links

On the proactive side of things –  you should keep your operating system, web browsers and other software products up to date. The latest versions contain new security patches that will put your security at least partially on autopilot.

A good anti-spyware program can also help.

So, What Have We Learned?

Now we know:

  • What identity theft is
  • How it works
  • How to avoid it

Knowing all this drastically lowers the chances of actually having to deal with such an issue.

As in that awkward class in seventh grade, the most important thing to remember is to use protection and not to share too much with strangers. Or, in other words, the best way to avoid suffering your mother’s wrath is to make sure her vase stays intact in the first place.

FAQ

Q: Why would anyone want my information?

A: Your SSN, driver’s license, payment and medical information may be more valuable than you think. A scammer could use your data to take out a credit, draw from your bank account, take advantage of your medical benefits – or even blame you for crimes they’ve committed.

Q: How can fraudsters steal my personal data?

A: Facts show identity scams are more common online rather than in real life. You may receive emails requesting personal information or open a link or an attachment, which in turn can install malware on your device. The malware is by definition designed to compromise your security.

Scammers may also try to collect your data by looking over your shoulder while you’re filling in documents – or go through your company’s discarded papers.

Q: How can I protect myself?

A: If you’re wondering what the best protection against online identity theft is – there are a few simple, well-established best practices you can adopt.

Simply avoid opening suspicious websites or email attachments by people you don’t know. A good antivirus program also helps.

As for real-life interactions – be careful to whom you give your personal data and be aware of your surroundings when you’re writing down sensitive information.

Q: What is identity theft anyways?

A: In case you skipped through the whole article, here’s the “too long, didn’t read” version for you. ID theft is a crime in which an impostor steals personally identifiable information (like your SSN, driver’s license or medical insurance numbers) and impersonates others with the purpose of financial gain.

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