What Are Identity Theft and Identity Fraud?
Identity theft happens when a swindler illegally obtains your personal information to impersonate you to charge purchases, open credit cards, and take out loans in your name.
In contrast, identity fraud happens when a fraudster creates a fictitious identity and uses that to fund various transactions. Still, identity fraud is not a victimless crime—although the criminals do not steal someone else’s identity, they still cost companies millions of dollars that are difficult to recover.
How to Tell if Your Identity Has Been Stolen
Identity thieves must act quickly in order to capitalize on their crime before the victim realizes what has happened. One key way to tell if you have been a victim of identity theft is by regularly checking your bank statements. If you notice charges on your account that you did not make yourself, your identity may have been stolen and you should immediately contact your bank or credit union to report it.
A sudden plummet in your credit score might signal strange activity. Identity thieves might make large purchases with your credit card or apply for things that can significantly impact your credit score. If you notice a decline in your credit score, inquire with a credit reporting agency to verify your suspicion.
Perhaps you have not noticed a change in your credit score but have been turned away at the cash register. If your credit or debit cards are declined or a merchant refuses your personal checks, your identity may have been stolen and you will need to act with a sense of urgency to restore the use of your funds.
Tax troubles could also signal that your identity has been compromised. Unfortunately, tax season is a popular time frame during which many people learn that their personal information has been compromised. You might be notified that someone else has attempted to file a tax return under your name or that you have tax dues that do not add up to your projected amount.
Even if your bank statements and credit score appear to be normal, merchants accept your forms of payment as usual, and you are able to file your taxes without difficulty, you may not be in the clear. Watch your local news or do a Google search for recent news reports to ensure that your favorite store has not been hacked. Taxpayers are not the only ones who experience exploitation of private information – retailers do as well. If you learn that a retailer with which you frequently do business has been hacked, your identity may be at risk.
What to Do if Your Identity is Stolen
One of the most crucial things you can do if you suspect that your identity has been stolen is to act quickly. This type of scam thrives on time: the longer it takes you to realize that your information has been compromised, the longer scammers have time to tamper with your life and financial standing. Reach out to any bank with which you do business to inform them of any transactions that have been fraudulently charged to your account. They will work with you to dispute the charges and get the matter resolved.
Also, contact the IRS as they can assist you with making sure that your taxes are not further impacted by the crime. BankRate recommends you place a fraud alert on your credit report. This will help creditors see that problems with your credit should be attributed to identity theft instead of poor money management on your part. The fraud alert will remain on your credit report for up to 3 months but can be extended if necessary.
Dedicated to combating crimes against consumers, the Federal Trade Commission (FTC) has outlined a process for reporting identity theft. Use their form to get started with filing a report.
When most people think of identity theft and fraud, they do not think of the police. After all, no one has physically harmed you or directly threatened your safety, right? Wrong. Contacting your local police ensures that there is a police report documenting the issue along with additional information about your other personal accounts that may be affected. State laws may vary when it comes to obtaining a police report about identity theft, but it is still important to inquire. For your convenience, the Federal Trade Commission (FTC) has published a letter that you can take with you to the police department which reminds them of the importance of obtaining the report.
How to Prevent Identity Theft
While identity theft has yet to be completely eliminated, there are ways to prevent it. First, secure any items that contain your personal information. This includes shredding mail, such as bank statements and credit card offers, before disposing of it.
Do not give your personal information to solicitors. Be cautious of people that contact you via phone, email or social media messages requesting that you give them your social security number, PIN or bank account number in exchange for a “special offer.” This may be a scammer trying to obtain your information to impersonate you.
Monitor your checking and savings accounts. Giving them a quick glance once daily (with a more thorough review once or twice per week) will help you to prevent any suspicious activity from going any further. If you notice unusual activity (i.e., purchases you did not make), contact the bank immediately to dispute the charges and cancel your cards.
Finally, be sure to web surf securely. Avoid unsecured websites as scammers may use these to intercept your passwords. You can tell if a website is secure if the web address starts with “https://” or a padlock symbol is included in the URL bar. If you do not see either of these or get a message in your browser that the page is unsafe to access, do not proceed. Only access websites that have up-to-date encryption that can be verified.