Protecting Yourself against Identity Theft: Complete Guide

Have you ever watched the Hollywood movie ‘The Net’, starring Sandra Bullock? This story revolves around identity theft.

Unfortunately, identity theft is no longer fiction or something that occurs in Hollywood movies like ‘Face Off’ and ‘Taking Lives,’ and a few others.

It is a very real and tangible threat that is lurking around the corner to strike anyone. Identity theft threatens all ordinary Americans every day.

What Happens in Identity Fraud?

• Are you getting bills for stuff you never bought on credit card? Is money vanishing from your bank account for no apparent reason?
• Do you get calls or visits from recovery agencies for loans you never took? Or has your credit rating taken a sound beating without any cause?
• Does someone call you claiming to be taxmen? Maybe you have been denied medical treatment because someone else took benefits on your Medicare.

If these things are happening, you could be among those millions of Americans that are victims of identity theft or identity fraud.

Does this scare you? If it does, continue reading.

Understanding Identity Theft

Identity theft and identity fraud is defined as all types of crime in which someone wrongfully obtains and uses your personal data without your permission.

Usually, the identity thief wants to steal your money in some way by using your good name and credit, warns the US Department of Justice.

But that is not all. Identity theft is the fastest growing crime in the US, with more than 10 million Americans falling victims every year, says Federal Bureau of Investigation.

Unfortunately, most Americans do not take identity theft and identity fraud very seriously. Just about one percent of identity theft victims actually report the crime to police and various government agencies, according to reports.

Not because it involves any hassles. Americans are complacent that identity thieves cannot cause them any harm.

Types of Identity Theft/ Identity Fraud

There are different types of identity thefts and frauds that may affect you.

• Using your medical records and Medicare insurance to get free treatment and medicines by using your identity.
• Fraudulently opening a bank account using your identity and other personal details.
• Using your good credit scores to get another credit card or loans without your knowledge.
• Making online purchases using credit card or debit card and net banking details fraudulently.
• Data breaches that occur when you use a public computer to make online payments or conduct financial transactions.
• Filing for tax returns with Internal Revenue Service in your name and by using your Social Security number.
• Travel Document theft while visiting a foreign country. The passport can be altered and used by terrorists and drug smugglers, among other criminals.

Seriousness of Identity Theft

In 2017, over 16.7 million consumers in the US above 16 years age fell victim to identity theft and identity fraud, says an independent study conducted by Javelin Strategy & Research, a reputed advisory company.

This figure represents an increase of eight percent or 1.3 million fresh victims of identity theft and identity fraud in 2024 over those reported 2016.

Also in 2024, whopping US$16.8 billion were stolen from American public through identity theft and fraud.

On average, an American lost US$290 in out-of-pocket expenses due to Account Takeovers (ATOs) caused by identity theft. ATOs means when fraudsters take over your bank account. Americans also spent over 15 hours of man-hours to resolve the fraud.

Over 81 percent of identity thefts occurred due to online shopping, especially in cases when a credit card or debit card was not even present with the fraudster.

More than 1.5 million Americans whose accounts were taken over by identity thieves also found that new, fraudulent intermediary accounts had been opened in their names.

This shows an increase of over 200 percent in number of bank accounts being opened in other’s names.

Identity Theft on the Rise

Identity thieves are also getting more sophisticated, warns Javelin Strategy & Research.

Since credit cards and debit cards from Europay, MasterCard and Visa (EMV) are now embedded with machine-readable chips, identity thieves and fraudsters are now targeting online shoppers increasingly, the report further adds.

These figures means you should take identity theft very seriously and take steps to ensure safety of your personal and financial data.

Remember, even children are not spared by identity thieves. There are cases where children as young as 12 years have had identity stolen.

International Implications of Identity Theft

Your stolen identity also has severe implications abroad. International Police Organization or Interpol warns that stolen identity can be used to make passports and other travel documents in your name.

Terrorists and drug smugglers can use your stolen passport to enter countries where immigration authorities do not use sophisticated methods to detect altered travel documents.

There is a flourishing black market of stolen passports in certain countries.

Also, stolen or lost passports are used by identity thieves to get access to your personal financial information. Worse if you lose credit cards and debit cards while traveling abroad.

You can freeze your cards and prevent unlawful use. But the thief already learns about banks you use and your Social Security number, among other details.

Steps to Identity Theft Protection

Various organizations of the US government have specific details on how identity theft occurs.

• Shoulder Surfing: Identity thieves watch you while keying in credit card/ debit card numbers on your smartphone while you are buying something online or making payment in public places.
• Bank Correspondence: If you throw away credit card pre-approval mail, bank statements, credit card bills and similar mail without shredding or destroying, fraudsters can use its details to steal your identity.
• Public Computers: Shopping online from public computers at a cyber café can lead to identity theft: it may contain software that records your personal details including credit card or debit card number and personal data.
• Discarded ATM Slips: Never throw away an ATM transaction slip intact: it can be exploited by identity thieves to steal personal data.
• Social Security Number: Be very careful while giving your Social Security number on phone or email: it can be overheard and used to steal your identity.
• Responding to Spam: If you respond to those attractive offers that land in your email box and give your personal details, they are likely to fall into hands of scammers.

You can also subscribe to a good identity theft protection system online. It helps secure your online data and prevents data breaches and leaks to unauthorized persons.

Detecting Identity Theft and Fraud

You can easily detect identity frauds with some alertness and extra effort. A lot of these information will already be available from US government websites.

• Ask your bank for a statement of your accounts. Check whether there are any undue transactions such as cash deposit or debit that you cannot explain.
• Read your credit card statements carefully. If you notice any unusual transactions, alert the bank or the credit card company immediately.
• Get your credit report from companies like Experian. It will give you a clear idea whether there are any fraudulent bank accounts active in your name. Place a identity fraud alert on your name which will prevent further credit and opening of accounts by scammers.
• Check with Internal Revenue Service for any tax returns filed by identity thieves.
• Call the Fraud Department at Federal Trade Commission and alert them about your identity being stolen.
• Also freeze your accounts and credit if you suspect there is an identity theft.
• Change your PIN and online transaction username and passwords frequently.
• Report any missing cards to the company or bank and have them frozen immediately.

How to Recover from Identity Theft

The US Federal Trade Commission has several tips on how to recover from identity theft. If you find yourself, your spouse, child or a relative who has fallen victim to identity theft, activate the recovery program by following their steps.

The first step is to file a complaint with your local police and government and get a copy of the report.

Nowadays, some insurers also provide coverage against identity theft for a reasonable premium. Such insurance can help you meet expenses related to overcoming identity theft related problems such as freezing your own bank account and credit.

Recovery from identity theft can sometimes be painfully slow. However, it is a process you cannot avoid. As victim of identity theft, it is your duty to report the case to police and help them arrest perpetrators.

Contact credit ratings agencies such as Experian, TransUnion and Equifax and set up fraud alerts. This is the most important step towards identity theft recovery. It prevents future losses and shields you against fraudulent transactions in future.

Cost of Identity Theft

If you do fall victim to identity theft, there are several hidden costs you would most likely have to bear. And each of them is equally terrible.

• Possible Arrest: You can get arrested for any fraud committed by the scammer that has stolen your identity.
• Low Credit Score: Since identity theft is usually for money, the scammer will use your details to get credit, loans, credit cards and other finance without your knowledge. This can severely affect your otherwise excellent credit scores.
• Financial Losses: Needless to say, you will lose a lot of money due to identity theft on account of unpaid bills and credit instalments. Hence, it is important to detect if you are victim of identity theft and report immediately to law agencies and police.
• Waste of Effort: As victim of identity theft, you will spend a lot of man-hours getting illegally opened accounts and credit lines frozen.
• Mental Distress: Usually, victims of identity theft undergo severe mental stress. You might need professional intervention by a psychiatrist to overcome stress and emotional distress.
• Denial of Services: You might find requests for a fresh credit, mortgage and other finances denied by lenders if you are victim of identity theft due to low credit scores.
• Family Problems: Money fights are the biggest reason for divorces in America. If your finances are affected due to identity theft, your spouse may suspect you of spending money on someone else, giving rise to domestic problems.

People behind Identity Thefts

If you think that some unknown culprit at remote location has stolen your identity and using it to get money and credit illegally, think again.

In several instances, close relatives such as spouse, children, relatives, neighbours and close friends or even office colleagues can be the culprits.

Unfortunately, a lot of cases of identity theft have been traced to people whom the victim knows and trusts very well.

Of course there are people and factors outside your circle too. These can include anyone from a hacker and phisher to data breaches caused by faulty security systems used by various companies where you shop online.

Banks and financial institutions generally have latest and stringent security systems that are hard to breach. But sometimes, cyber-criminals manage to bypass these too.

There are foreign players too that can steal your identity online. But this occurs when you are careless about websites you visit for shopping. Sometimes, it can be due to data breaches of some organization that has weak or loophole ridden security systems.

Identity Theft Prosecutions

There are several instances were identity thieves have been successfully detected and brought to justice by investigating agencies in the US.

The IRS releases frequent updates about such prosecutions in the hope that more people will report cases of suspected identity theft.

US courts generally sentence identity thieves with long jail terms and try to recover the money through various means provided under existing American laws.

If you are indeed victim of identity theft, it is therefore advisable to report it to concerned authorities immediately. You would be helping a lot of unknown people by bringing these culprits to justice.

Unfortunately, law enforcers also face stonewalls when it comes to identity theft victims reporting cases.

This happens because an identity thief could be a beloved relative or trusted friend, boss or even a colleague with whom you have enjoyed good times. If you face such dilemma, consult an attorney immediately.

Countries Most Affected by Identity Theft

According to Interpol and global online security giant, Symantec, data breaches leading to identity thefts occur worldwide. The top 10 countries affected by identity theft due to data breaches are ranked as follows:

• USA
• UK
• Canada
• Australia
• India
• Ireland
• Japan
• Israel
• Germany
• Thailand

In recent months, China has taken identity theft in the country very seriously and has formed a special investigation department to detect fraudsters.

Final Thoughts on Identity Theft

Undoubtedly, the number of Americans that fall victim to identity theft annually is scary. Remember, identity thieves do not spare your child or even dead relatives. They can steal records from final resting places and local authorities to exploit their names.

As most of us increasingly buy our groceries and other stuff online, identity theft is becoming a very tangible and alarmingly serious threat. It affects ordinary people who are otherwise honest and have taken great efforts to maintain excellent credit scores.

Therefore, it is advisable to take identity theft very seriously and take all steps to prevent yourself from falling prey.

In case you are already a victim, take that step and report your case to Federal Trade Commission, local police, FBI and other concerned authorities immediately.