In 2018, 14.4 million people fell victim to identity theft. While this was a decrease of almost 2 million from 2017, the financial impact was heavier in 2018.
What is identity theft? It’s where someone steals your personal information and uses it (without permission) for their own gain. For example, someone might steal your credit card number and make a mass purchase on the internet. As you can see, this can cause a serious number of problems!
So how does identity theft happen? Read on to find out.
The Types of Identity Theft
Before we discuss how identity theft happens, let’s first take a look at the types of identity theft out there. Of course, there’s credit card fraud. But what else?
Here are some of the other types of ID theft you might see:
- Account takeover
- Driver’s license
- Social Security Number
- Mortgage/home title
As you can see, there are countless ways a fraudster can steal your sensitive information and wreak havoc on your life.
How Does Identity Theft Happen?
Maybe you think you’re always being careful when dealing with your data. But the truth is, you’re probably not. Here are some ways criminals are gaining access to your information.
Chances are, you’ve probably received scam emails before that are so riddled with errors, you laugh and trash them. Those are attempts at phishing.
However, there are much more sophisticated and elaborate phishing scams nowadays. Cybercriminals carefully craft emails that look like they’re from trusted institutions, like your bank or even companies like Netflix.
They ask you to either “log in” (on their fake site) or to download something. If you “log in” on their page, you’ll be handing them your credentials. And if you download a file, you’ll be placing malware onto your computer that can do things like track your keystrokes.
The best way to avoid phishing attempts is to double-check the links and attachments. Also, always type in URLs yourself instead of clicking on links, even if you feel they’re safe.
Unfortunately, not just individuals fall victim to hacking attempts. Companies might as well, which means their database can be leaked.
While you can’t prevent company data breaches from happening, you can lower the chances of your information being leaked. Minimize the distribution of your personal identifiable information (PII) and only give it out unless absolutely necessary.
Unsafe Internet Connections
Maybe you’re at a cafe and your phone’s 4G/5G isn’t working very well. You want to log on to check something, so you take a look at the internet connections available. To your delight, there are some that aren’t password-protected, so you connect to one.
This is a huge mistake, as these connections are unsafe. Public wi-fi networks are one of the worst places to log on, even if you’re logging onto a password-protected one. There might be a criminal connected to the same network, after all.
If you must connect to public networks, make sure you’re not carrying out anything with sensitive details, such as your bank account or credit card numbers.
Dumpster Diving and Mail Theft
This might be less common nowadays since most things are digital, but criminals can still steal your information by going the old-fashioned route: dumpster diving and mail theft. If you still receive snail mail from your bank, then you might be subject to ID theft.
To prevent this from happening, always shred your documents before throwing them away. You should also have a locked mailbox if possible.
If you have strangers come into your house often (such as repairmen or cleaners), make sure your documents are all secured. Lock them away in a file cabinet if you can.
Lost Social Security Card
Your Social Security card is an important thing that’s unique to you. Because the string of numbers is hard to remember, you might carry around your card in your wallet.
But what happens if it falls out, or even worse, you lose your wallet or it gets stolen? Then someone else can potentially have your SSN.
The best thing you can do is keep your SS card at home, even if it might be more inconvenient. This card has all your personal details on it, and you don’t want anyone to have it. So don’t risk it falling into someone else’s hand and keep it locked up safe at home.
What Should You Do if You’re a Victim of Identity Theft?
Despite your best efforts, identity theft still might happen to you. So what should you do if you’ve become a victim?
If your credit cards have been compromised, call up the companies to cancel them right away. They’ll then issue you new cards, which should arrive in a few days.
If your data is in a data breach, then change all your account passwords to ensure cybercriminals can’t get into your accounts. Using a password manager can be a great help.
If your SS card’s been stolen, then you should add a fraud alert to your credit reports. This can prevent the thief from opening an account under your name, which can be quite a hassle to deal with. If they’ve already opened an account, you should file a police report, let the creditor know, and request either a credit freeze or extended fraud alert.
It might be worth Googling “ID theft attorneys near me.” These professionals can help walk you through the process of getting your life back together and even get you compensation from a class-action lawsuit.
Protect Yourself From Identity Theft
Now you know the answer to the question, “how does identity theft happen?” With this awareness, you’ll be able to better protect yourself.
Recovering from identity theft isn’t just a lengthy process, but it can be quite stressful as well. By being more careful and guarded, as well as smarter, you’ll be able to prevent identity theft from happening to you. So keep this article in mind whenever you’re dealing with financial situations so you keep yourself safe.
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