As more and more people turn to the internet to do their banking, investing and shopping, and as more and more companies turn to electronic means to transfer and store customer data, you will continue to hear more and more news stories about identity theft.
In 2012, over 12 million American citizens had their identities stolen. In 2014 that number was up to 17 million. Despite your carefulness in using and sharing your personal information, identity thieves continue to gain access to confidential data and commit crimes under your name or spend your money without your knowledge.
Understanding the way identity thieves pull off these crimes may prevent you from becoming another statistic. In this post I am going to walk you through various ways thieves go about stealing your identity, tips for you to use to help prevent it from happening and what to do in the event you do become a victim.
How Your Identity Gets Stolen
So how exactly does one get their identity stolen? Unfortunately there is not one way or method. Criminals are using various techniques and it seems with new technology, new ways to steal identities are popping up every day. Below I list many, but not all, of the ways your identity could get stolen.
- Dumpster Diving: This involves a thief rooting through your trash looking for credit card or bank statements, utility bills, insurance records, etc. Any of this information will help a thief steal your identity.
- Mail Theft: When a thief commits mail theft, they steal your mail in an attempt to get access to your bank or credit card statements or utility bills.
- Skimmers: Skimming is when a thief attaches a device to a credit card reader and skims the information from a swiped card. From there, a copy is made and the thief goes on a spending spree.
- Phishing Emails: This form of identity theft occurs when a thief tricks you into giving out your personal information through an email, phone call, etc.
- Malware Emails: This happens when a thief sends you an email with a link that you click on. The link installs a virus or trojan on your computer and then tracks and records when you enter your credit card number. In some cases, it will just track the sites you visit and the thief will then send a phishing email that looks like it came from a company you deal with.
- Untrustworthy People: When you give your credit card to your server at the restaurant or your social security number to the receptionist at the doctor’s office, they turn around and use that information against you, if they are untrustworthy.
- Data Breaches: This happens when a company you have transacted business with is hacked into and the data they store is stolen.
As I noted above, these are not all of the ways. You can check out this great resource for some other ways thieves steal your identity.
Tips To Prevent Identity Theft
So now that you know various ways thieves go about stealing your identity, what do you do? You might think of only using cash for purchases and limiting who you give your personal information to. These are a good start but there are other options you can use as well which I highlight below.
#1. Protect Your Personal Information
Since identify theft involves the fraudulent use of your personal information, such as your credit card number and social security number, never give this information to anyone you do not know or cannot trust. When you must give the information, such as when making an online purchase, make sure that the person or website handling it can be trusted and that the information will be used only for the purpose that has been stated.
#2. Use Credit Cards Instead of Debit Cards
Whether or not you are a fan of credit cards, they have safety measures to protect against fraud. Of course, so do debit cards. But the main difference is with credit cards, you will never pay the money that was charged unless it is found to not be fraud. With a debit card, the money is out of your bank account until the investigation is over and then the money is refunded back to you.
#3. Be Smart With Your Passwords And PINs
We use passwords and PINs to access our emails, bank accounts, ATMs and social media sites. One of the easiest ways criminals can steal your identity is by getting access to your passwords and PINs. Do not write them down or save them in your smart phone. Memorize them. Change your passwords frequently. When creating a new password, use a combination of letters and numbers. Avoid using words and numbers that can be easily guessed, such as your mother’s name or your phone number.
The best trick is to use a sentence you remember. Take “a penny saved, is a penny earned” for example. Your password could take the first letter of each word, making it: “ApSi1pe”.
#4. Use A Website With Secure Server
Web sites that are not secure expose your personal credit and debit card information to fraudsters. Most online shopping websites these days have several different layers of security. You can easily recognize a secure site because its URL begins with HTTPS:// instead of the HTTP:// of other sites. A secure site also has a small lock icon in the bottom right corner of the screen. Always check whether a site is secure or not before entering your information.
#5. Keep Your Online Shopping Activities Strictly At Home
Online stores are there so that you can shop from home. So keep your online shopping activity strictly at home if you want to be safe. In public places such as restaurants or parks, there is always the possibility that someone might be reading your fingers. The use of public computers (in a library, cybercafe or other places) or free public wifi should be strictly avoided as there may always be someone reading your digital footprints.
In fact, there is a rise of thieves setting up fake free wifi hot spots in hopes of getting their hands on your personal information.
#6. Install A Full-Featured Anti-Malware
Many online fraudsters use malware to steal sensitive information, including a credit card number and banking password from your computer. Malware is a malicious software program, such as a virus or trojan horse. The only way to protect your computer and yourself is to install a full-featured anti-malware package, like Norton Antivirus, which constantly guards against and eliminates malware.
Of course, just having a solid anti-virus program may not be enough. You still need to make sure it is always up to date too.
#7. Use A Third Party Payment Service
Although credit cards are pretty safe if you use them on secure sites only, they are like sitting ducks on non-secure sites. If you have to make an online payment through a non-secure site, then you should use a third party service like PayPal instead. PayPal is extremely secure. The only way someone can steal money from your PayPal account is by getting a hold of your password.
#8. Watch Your Snail Mail
Banks, credit card companies and utility companies still send a lot of documents by mail – the traditional way. These may include bank statements, insurance forms, credit charge receipts, expired charge cards and pre-approved credit offers. Collect your mail as soon as it arrives in your mailbox. Do not leave the documents lying around anywhere in your home. Securely and permanently destroy all the documents that you do not need using a shredder. If you are going away on vacation, call the postal service to request a mail hold.
When getting rid of old bank and credit card statements and another other financial documents, be sure to shred them before throwing them away. Also be sure you know what financial documents you should keep and what to shred and throw away.
#9. Review Your Credit Reports
Reviewing your credit report is a good way to get a clue into your identity being stolen early on. By checking your credit report, you can spot new accounts that are opened in your name or any unusual inquiries into your credit.
This is key because many times thieves will use your information but change your address so you never get the bill in the mail. You can check your credit report for free each year at AnnualCreditReport.com. Additionally, you can use this trick I use to get my credit report free three times a year.
#10. Don’t Forget About The Kids
Children are the ideal victims for identity theft given their perfectly clean backgrounds and the fact that they have no actual credit score to speak of. According to statistics in the field, 8% of children under the age of 19 have their identity stolen. That figure may be an underestimation as many parents don’t think of monitoring the status of their child’s identity, which leads to many kids’ identity theft cases remaining unreported.
Using the social security number of a child fraudulently puts children at risk and has a negative impact on their future ability to secure a student loan or get a decent job. College-aged children are also a target for identity thieves.
#11. Be Smart About Social Media
With the escalating popularity of social media, people have started to exhibit increasingly intimate social media behaviors, which includes sharing birthdays, cell numbers, pet’s name, children’s names, when and what school they’ve attended and other details that people usually use to create passwords.
Sharing apparently harmless information can lead to your identity being stolen by clever and skillful individuals. For many people, even if this information isn’t used to create a password, they are the answers to questions when resetting a password. With this information, a thief can easily click on a “forgot password” link, answer the security question and have access to your account in a short amount of time.
#12. Carefully Watch Your Medical Records
Medical identity theft is one of the most serious forms of identity theft that gained more popularity over recent years. This type of fraud not only leads to incurring charges for medical care that you did not receive, but also puts you at risk of raised premiums or even losing your coverage entirely. Your medical records will no longer be your own and will lose their accuracy as they will include medication and treatment of another person.
Statistics show that medical identity theft is usually committed by health care professionals, who can easily access personal information of various people, especially seniors who keep their Medicare card or social security card with them in their wallets.
#13. Question, Question, Question
At the end of the day, you are the last line of defense when it comes to protecting your identity. So before you click on that link in the email telling you that you won $10 million dollars, question it. Could it really be true? Not likely. So don’t click on the link.
The same can be said for suspicious emails from friends. Sure you trust them, but if the email doesn’t sound like them, then don’t click on the link or believe what it says. If you are really torn over it, call or text them instead. Don’t reply to the email as most likely the scammer will reply since they have access to the email account.
The bottom line is to just be smart and think things through. If things feel off or odd or something is just too good to be true, then something is going on and you are better off just ignoring it and moving on.
Tips For Victims of Identity Theft
If you are one of the many victims of identity theft, what are your options for clearing things up? The first thing you have to remember to do is to remain calm. I know this is easier said than done. But I was a victim of identity theft a few years ago.
I remember logging onto my bank account and seeing my balance was negative by a few hundred dollars. My immediate reaction was confusion, wondering how and where I spent my money. That emotion then turned into fear as I realized what had happened.
I went over to my bank to tell them the issue. They had me hand over my debit card and canceled it. Then they issued me a new one. They then took a statement from me about what happened and had me point out which transactions were fraudulent.
From there I waited for them to complete the investigation. After a couple of months, they determined that the charges were fraudulent and refunded the money back into my checking account. To this day, I have no idea how the thief got my information.
So I know how it can be an emotional time. But you will get through it and restore your good name. It will just take some patience on your end. Here are some more tips for you to get through this tough time.
- Run Virus and Malware Scans on Your Computers: Your first step should be to run virus and malware scans on your computer to make sure everything is clean.
- Change Your Passwords: Once you confirm your computer is clean, then start changing your passwords. Be sure to write them down and use the tip I mentioned above to make them more difficult to crack.
- Contact Your Credit Card Issuers: Reach out to all of your credit card issuers and let them know that your identity has been stolen. Ask for new cards with new account numbers.
- Freeze Your Credit Report: Call the three credit bureaus and have your credit frozen. This ensures no new accounts can be opened without your approval. Here are their contact numbers: TransUnion 1-800-680-7289; Equifax 1-800-525-6285; Experian 1-888-EXPERIAN (397-3742)
- Report The Crime To The Police: This is critical as they will write up an official report of the crime. You want to get a copy of that report as most financial institutions will request it from you.
- Review Your Credit Report: This will help you assess the damage that was done to your credit and will let you know which companies to contact to let them know there are fraudulent charges. Be sure to do this again a few months after the fact to verify nothing new is going on.
- File A Complaint With The FTC: The FTC won’t open a criminal investigation, but they will provide more assistance on how to get through being a victim of identity theft with detailed information.
Identify theft is the fastest growing crime today. It can ruin your credit, wreck your finances, damage your reputation and in extreme cases, land you in jail. Since identity theft is such a lucrative enterprise, criminals are constantly on the prowl looking for easy targets.
Unfortunately, it is not possible to prevent it entirely and the only way to remain safe is to be on your guard at all times.
So take some smart steps to better guard your personal information. The smarter you are about this topic, the less likely you will find yourself a victim one day.
And in the event you do become a victim, keep a calm mind and follow the tips I outlined above.
[Photo Credit: Salvatore Vuono / FreeDigitalPhotos.net]