Internet identity theft is continuing to emerge as a significant threat, affecting millions of people worldwide. According to the Federal Trade Commission, consumers reported losing nearly $8.8 billion to fraud in 2022, an increase of more than 30 percent over the previous year - and the situation is only worsening. The U.S. National Council on Identity Theft Protection reported that someone becomes a victim of identity theft every 22 seconds and people who are active on social media are 30% more likely to have their identity stolen.
In this blog, we will shed light on identity theft, its signs, how to identify if you've been a victim, and crucial steps to take for recovery and protection.
Identity theft definition
Identity theft occurs when a fraudster gains unauthorized access to an individual's personal information, such as social security numbers, financial data, or medical records, with the intent to commit fraudulent activities.
What is online identity theft or ‘identity fraud’?
Identity theft is a form of cybercrime where an individual's personal information is stolen and misused by someone else for financial gain or other fraudulent purposes. Fraudsters can use this stolen data to open new credit accounts, make unauthorized transactions, file fraudulent tax returns, or even commit crimes under the victim's identity.
In the digital age, online identity theft is on the rise due to the vast amount of personal information that is placed online. In particular, social media users often do not realize just how much an identity thief is able to glean from their social media accounts. Whether it’s LinkedIn, Instagram, Facebook, or any other platform, someone looking to steal personal details can pretty easily find out a person’s date of birth, location, job, and identities of family members.
How does identity theft happen? How can someone steal your identity? Methods of identity theft
You may be asking, how can someone steal your identity online? Unfortunately, there are various methods of identity theft, and criminals are continually finding new ways to exploit vulnerabilities and obtain personal information.
These are some of the most common ways your identity could be stolen:
- Data Breaches: Cybercriminals target organizations, businesses, or government agencies that store large amounts of personal data. When a data breach occurs, sensitive information such as social security numbers, credit card details, and passwords can be exposed, stolen, and then sold or misused by criminals.
- Phishing: Phishing is a fraudulent technique where scammers send deceptive emails, messages, or websites that appear to be from legitimate sources, such as banks or government agencies. They aim to enact online identity theft by tricking individuals into providing their personal information, including login credentials or financial details.
- Social Engineering: Identity thieves may use social engineering tactics to manipulate individuals into revealing confidential information. They might pose as a trusted authority or use emotional appeals to gain victims' trust.
- Mail Theft: Criminals may steal mail from mailboxes or trash bins, looking for documents containing personal information, like bank statements, credit card offers, or tax forms.
- Skimming: Skimmers attach devices to ATMs, gas pumps, or point-of-sale terminals to capture credit card information when users swipe their cards.
- Phony Wi-Fi Hotspots: Fraudsters set up fake Wi-Fi hotspots in public places to intercept data transmitted by unsuspecting users, potentially gaining access to personal information.
- Lost or Stolen Wallets/Purses: If you lose your wallet or purse containing identification cards, credit cards, or other personal documents, an identity thief may use the information to commit fraud.
- Insider Access: Sometimes, internet identity theft happens due to an insider with access to sensitive data who misuses it for personal gain.
- Impersonation: Identity thieves might impersonate individuals to gain access to their accounts, financial information, or services.
- Pretexting: In pretexting, scammers create a fabricated scenario to obtain personal information from individuals or organizations.
- Dumpster Diving: Criminals may rummage through trash or recycling bins to find discarded documents containing personal information.
- Data Mining on Social Media: Information shared on social media platforms can be used to gather personal details and create targeted phishing attempts, leading to online identity theft.
Signs of a stolen identity
Detecting identity theft early is vital to minimize the damage. Here are some warning signs that you might be a victim of identity theft:
- Unrecognized Transactions: Unexplained charges on your bank or credit card statements that you did not make.
- Missing Mail: If your bills, statements, or important mail suddenly stop arriving, it could indicate that someone has changed your address without your knowledge.
- Credit Score Changes: Drastic and unexplained fluctuations in your credit score could be a sign of fraudulent activity.
- Notification of Breach: If you receive a notification from a company or organization indicating that your personal data may have been compromised in a data breach.
- Unexpected Denials: Receiving unexpected loan or credit card application denials despite having a good credit history.
- IRS Notice: Receiving an IRS notice stating you filed multiple tax returns or underreporting your income.
How should you respond to the theft of your identity?
Being informed about the signs of online identity theft and taking prompt action if you suspect fraudulent activity can help mitigate the damage. If you suspect or confirm that you've fallen victim to identity theft, there are some immediate steps you should take. Placing a fraud alert with all three major credit bureaus - Equifax, Experian, and TransUnion - will warn potential lenders and creditors of potential fraud.
Contact your bank, credit card companies, and other financial institutions to report any unauthorized transactions, and block your cards immediately. You can also check if any financial theft has already occurred.
You could also file a police report - there may be similar occurrences that will help law enforcement agencies trace the criminals. It’s also a good idea to file a complaint with the Federal Trade Commission (FTC) through their online Identity Theft Report. Additionally, if you suspect tax-related identity theft, contact the IRS Identity Protection Specialized Unit and follow their guidance.
Protecting Yourself from Identity Theft
Adopting proactive measures to protect your personal information reduces the risk of becoming a victim of online identity theft in the first place. By staying vigilant, you can fortify your defenses against identity theft and ensure your financial and personal security.
- Use strong, unique passwords for all your online accounts and change them regularly.
- Shred financial statements, medical records, and other sensitive documents before disposing of them.
- Avoid sharing personal information on public networks, and make sure to only use password-protected Wi-Fi networks. If using a public Wi-Fi network, utilize a VPN such as RAV VPN.
- Be cautious about sharing personal information online or over the phone, especially with unsolicited callers or emails.
- Know your friends and connections on social media - it’s ok to unfollow or block someone if their account looks suspicious.
- Review your bank statements, credit card bills, and credit reports regularly for any suspicious activity, such as unauthorized accounts or inquiries.
Additionally, staying informed about common scams and tactics employed by identity thieves can help protect your personal information from falling into the wrong hands. For more information on common identity fraud practices, and how to prevent identity theft, visit reasonlabs.com/blog.
We also highly recommend using an online identity protection service such as our Online Security browser extension, with features that include URL blocking, downloads scanning and Dark Web Monitoring.