There is always potential for identity theft, especially considering how digitized our world is. But don’t worry: There are measures you can take to reduce the possibility of this happening to you, especially when it comes to your credit and debit cards.
Read on to learn more about identity theft, its various forms and the steps you can take to safeguard yourself and your data from it.
What is identity theft?
Also known as ID theft, identity theft happens when someone steals another person's personal information and uses it without their permission. Thieves can partake in many criminal activities using your information, like applying for or maxing out credit cards, draining your bank accounts, or selling your data to another party.
The warning signs of identity theft can include receiving a bill for purchases you did not make, an unexpectedly rejected tax return, or alerts of suspicious activity by your credit company. No longer receiving household bills in the mail can also be a red flag, as a thief may have changed your address to keep you from seeing statements.
Types of identity theft
Described below are the seven most common ways for thieves to compromise your information.
Credit identity theft
This is when a thief uses your information to apply for a new line of credit. They will most likely use your birthdate and your Social Security number to do so.
The primary warning sign includes an unexpected shift in your credit score.
Child identity theft
This refers to when a criminal steals a child's identity and applies for credit using their name. Unfortunately, this often goes undiscovered until the minor later applies for loans or a line credit of their own once they're of age.
Possible warning signs for child identity theft include a child suddenly receiving credit card offers or messages about late or missing payments.
Synthetic identity theft
This is when a third party steals and jumbles an individual's personal information to create a fake identity. Criminals will then apply for loans, credit cards, and mortgages, and make other payments under that false name.
Warning signs for this type of identity theft may also come later down the road. One indication, however, is if you try to freeze your credit and learn that your Social Security number is already in use.
Taxpayer identity theft
This happens when a thief uses someone's information to steal their tax returns.
If you're unable to file your taxes electronically or you receive a notice from the IRS of suspicious activity, you may have fallen victim to this type of identity theft. Filing your taxes early is a great way to stay ahead of criminals. If they happen to file with your name after you have, the IRS will know that an identity thief is at work.
Medical identity theft
Obtaining someone’s identity to acquire health care services is medical identity theft. This type of theft is dangerous because mixing medical histories can leave physicians with inaccurate information when making treatment decisions.
Any unfamiliar insurance claims that say your health benefits are used is a telltale sign of medical identity theft. Make sure you report this theft to both your insurance provider and your medical professionals.
This means criminals will use your information to access your financial accounts and then bar you from logging in by resetting all your passwords.
A warning sign for this is if you receive a notification like a letter, email notice, or text message from your bank about an unsolicited address change or purchase.
Criminal identity theft
Criminal identity theft occurs when a criminal gives another’s name upon arrest.
An obvious warning sign is if police detain you for unclear reasons or information discovered in a background check causes you to miss out on being hired for a job.
How to prevent identity theft
One: Freeze your credit. This process is free through any of the major credit bureaus: Experian, Equifax, and TransUnion. Freezing your credit means you cannot open any new credit applications for a set amount of time. This is arguably one of the best ways to prevent identity theft.
Two: Safeguard your Social Security number. Your personalized Social Security number is one of your most crucial pieces of information. Whenever you need to provide it, always ask why. Keeping your card in a safe place and not carrying it with you everywhere is a wise thing to do as well.
Three: Be alert to phishing and spoofing.
Do not click or open any strange or unfamiliar text messages or emails. Known as phishing, this happens when identity thieves create emails, texts, or websites that look credible. They could claim to have been sent by your bank, for instance, and as soon as you open them, malware could install itself on your device.
Scammers can also try and do this through voice calls. Never give out your personal information over the telephone.
Four: Use strong passwords and add authentication steps. According to a recent study by Kaspersky, a global cybersecurity company, more than half of Americans do not use passwords to protect their mobile devices. It may seem trivial, but if you leave any of your unprotected devices lying around or lose them accidentally, a simple swipe or click can allow someone to obtain all your files.
Additionally, refrain from using the same passwords for multiple accounts or from using passwords that are easy to guess. Always mix it up. Do not include your name or birthday, and try to change your passwords from time to time, too.
Password managerial platforms exist to help you store all your login information, so you don't have to worry about remembering each one of them.
Five: Check your credit reports regularly. You are eligible to receive a free credit report every year from any of the major credit bureaus. Reviewing your report is an easy way to stay on top of things and catch errors quickly before they can spiral out of control or go unnoticed.
Six: Watch your mailbox. Stealing mail is an easy way for thieves to take your information, especially if you are not home to collect it. Have a trusted friend or neighbor pick up your packages while you're gone, or you can call and have them held at the post office until you're able to pick them up.
Seven: Monitor your financial and medical statements. Like with your credit reports, it's a good idea to review your financial statements and medical bills to ensure that each purchase and all the information is accurate. Report anything suspicious right away because the sooner you do, the quicker you can fix the problem.
Eight: Don't overshare on social media. Turning on privacy controls and being cautious about what you post online is a simple but very effective way to establish boundaries and keep things from getting out into the expanse of the cybersphere. By doing this, information like your date of birth, where you work, and even your family members' data isn't accessible to everyone.
What to do if your identity is stolen
If you believe you've fallen victim to identity theft, the following steps will aid you in addressing the matter as smoothly as possible.
Step 1: Review your credit reports.
Step 2: File an identity report if needed. This can also include filing a police report. Reaching out to your credit company or your banking institution is also a wise move to ensure they're aware of the situation.
Step 3: Place a fraud alert or security freeze. A fraud alert means your creditors receive a notice that you may be a potential victim, and they should contact you to verify your information. In comparison, a freeze means that no one can view your credit report from the start.
Step 4: Dispute any inaccurate information you find in your report. Never be afraid to dispute any information that seems odd. It takes up to 30 days to solve disputes, and if the credit bureaus verify your claims, they will erase the fraudulent activity from your file.
Identity theft FAQs
How do I report identity theft?
There are various routes you can take to report identity theft. This Federal Trade Commission website allows you to report theft and also offers additional preventative measures.
Other ways to report identity theft include filing a police report, informing credit bureaus and insurance companies, and alerting the IRS by calling 800-908-4490. This ensures that everyone is aware of the situation at hand.
What is the best identity theft protection service?
The main purpose of an identity theft protection service is to notify you when a violation of your information occurs. These services can also reimburse you for any costs incurred and help you to reclaim your identity.
Norton LifeLock 360 plan, IDShield, IdentityForce, and ID Watchdog are four good platforms to consider, but each of these services has its advantages and disadvantages. Always do your research before you enroll.
Is it worth paying for identity theft protection?
Ultimately, it's up to you. Some services are more costly than others, but taking additional precautions and having more reassurance is never a bad idea when it comes to preventing identity theft.
Ultimately, monitoring your expenses and bills and keeping your personal information, especially your financial information, private is the best way to keep identity theft from happening to you. Vigilance is vital.
In addition to taking personal responsibility for your information and what you do with it, there are tools you can use to help minimize victimization, allowing you to focus more on living life comfortably than on acting cautiously.
One such tool is Point Card.
You work hard for your money, and Point works hard not only to help build your wealth but to protect it, too. Designed as an alternative payment card to a traditional credit or debit card, Point offers all cardholders multiple financial safety nets, which include built-in transparency, car rental and phone insurance, and fraud protection with zero liability.
Point is a means for those who want to use their own money while receiving exclusive benefits, including unlimited cash-back and bonus cash-back on subscriptions, food delivery, rideshare services, and coffee shop purchases.
Simply put, Point Card is a great tool for navigating your financial journey both safely and smartly.
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