The answer to the question, “What is identity theft?” can depend on your perspective. Every year, fraudsters find new, novel, and creative ways to obtain the most sensitive information in your life.
It has also become an unfortunate cliche to say that identity theft is a growing problem. Regrettably, this type of criminal activity shows no signs of slowing down. For example, the National Council on Identity Theft Prevention says fraud cases increased by 70% from 2020 to 2021 alone. In part, this sharp increase was thanks to COVID-19 relief funding being abused. If you become aware of it, you can actually report small business COVID relief fraud directly to the U.S. Small Business Association.
Defining this crime may be a moving target, but it has core aspects to it that consumers should recognize. Once you understand the essentials, you can better protect yourself and prepare for litigation. Gather these details through the sections below and consider what a local attorney could accomplish for you.
What Is Identity Theft?
This crime comes in many forms, but it has some defining qualities. First, it involves someone using your personal information for fraudulent purposes. Generally, they will use this data to access your financial accounts or secure loans. However, there is also a growing trend of using your identity to secure benefits like healthcare, medicare, and insurance. After learning about the kinds of theft, you may want to check out our guide on how to protect yourself from identity theft.
What Are the Different Types of Identity Theft?
Identity thieves continue to find devious methods to obtain your private information. Therefore, a comprehensive list of strategies would take volumes of text to describe. The types of identity theft listed below are the most common or novel methods employed currently.
Financial ID Theft
Financial identity theft gets to the heart of this type of criminal activity. Furthermore, it represents a majority of the incidents that plague hard-working Americans.
Fraudsters will use any strategy available to uncover your credit card or banking information. For starters, they may use their access sparingly to avoid attracting attention. Anyone successful in this endeavor could complete hundreds or thousands of transactions without their target noticing. Of course, there are also circumstances where they could drain your funds and put you at risk for bankruptcy.
Social Security ID Theft
Stealing an individual’s Social Security number can be a pernicious method of fraud. Anyone who has this crucial information could cause years of lasting damage to your credit score and other assets.
Generally, the most significant concern is someone applying for loans without your knowledge. They can benefit from the extra funds without making payments. Moreover, they can apply for social security disability or medical benefits under your name.
Tax ID Theft
Identity theft during tax season is a momentous problem that the IRS actively combats and agonizes over. There are thousands of issues every year when fraudsters file returns to claim your credit or refund. Accordingly, the federal government hosts a security summit to help agencies and tax preparation companies prevent this activity.
Criminals have also made phishing scams a regular part of their tactics. They will contact unsuspecting citizens by text, email, or social media messages claiming to be an IRS agent. Once they have your information, they will disappear and use it for illegal financial gains at your expense.
Medical ID Theft
The FTC defines medical identity theft as using your personal information to obtain medical care. For example, criminals could use your Social Security number to receive these benefits:
- Medical Devices
- Prescription Drugs
- Claims for Services through Your Insurance Carrier
Synthetic Identity Theft
Synthetic identity theft uses a combination of real and falsified information. For instance, consider a situation where someone has your Social Security number but few other details. They could make up a false address and birthday for loan applications.
According to LexisNexis Risk Solutions, changes to Social Security issuance in 2011 contributed to this problem. The government took actions that protected this vital information, but it also made it harder to detect fake numbers. This unfortunate reality makes tracking the manipulation of companies or government entities an arduous task.
How Can You Prevent Identity Theft?
Taking precautions to stop identity theft before it happens won’t prevent all attempts to steal your data. However, they can help you catch illegal activity early and end it. Some general steps anyone can take are:
- Submit a request for a free credit report, or actively monitor your credit score
- Collect your mail daily
- Create new and secure passwords
- Activate two-factor authentication for your accounts
- Shred documents that have personal information before throwing them away
Americans have access to at least one free credit report annually. Looking at this information will do much more than help you improve your score, discover the highest credit score you can reach, and secure loans. You can quickly identify discrepancies or unusual activity that you did not initiate.
One of the easiest ways for a scammer to get your information is through your physical mail. If you do not collect it regularly, someone could easily get away with mail fraud and learn crucial details without your knowledge.
Furthermore, it is never a bad idea to change your passwords on a regular basis. While we can all get frustrated with trying to remember them, there are easy tools you can use to make this process painless. Many anti-virus software companies offer a free password manager to the public.
Two-factor authentication is another piece of the digital puzzle that you do not want to ignore. You may have noticed more websites asking you to set up this feature in the last few years. The motivation for this persistence is the peace of mind it can give. For instance, if someone tries to get into your account from an unusual location, you will receive a notification and can deny access.
Finally, there is another “old school” but trusted method to protect your private data. Despite the push to go paperless, many of us still receive paper correspondence with critical information via the mail. Accordingly, you want to shred these documents before you dispose of them to keep them from falling into the wrong hands. It’s also never a bad idea to categorize and organize medical records and other important documents. Shred the ones you don’t need, and keep the rest in a locked file cabinet or discreet location.
Meet With a Local Attorney About Identity Theft
Have you already answered “What is identity theft” the hard way?
Thankfully, legal options are available to victims while they rebuild their credit and reputations. Anyone who tackles these concerns headfirst without an attorney could easily make mistakes that prolong their suffering.
We connect people with identity theft lawyers across the country. Discover what one can do for you in a free consultation as soon as possible. You only need to send us a request or call (866) 345-6784 to connect with an expert!