By Elliot M. Kass | American Express Credit Intel Freelance Contributor
7 Min Read | August 4, 2021 in Credit Score
Each day, millions of people face the threat of identity theft – a crime that can take a huge financial and emotional toll. One study found that 5.1% of Americans experienced identity fraud in 2019 alone, resulting in losses of $16.9 billion.1 And a separate study found that the vast majority of people surveyed who experienced identity theft said it diminished their well-being in other ways as well.2
So how can you avoid having your identity stolen? Here are 10 important things you need to know about identity theft, including how to spot when it happens and what to do if it does.
Some people think identity theft won’t happen to them if they’re alert and street smart. But the truth is that identity theft is everywhere, with one out of three U.S. adults having experienced some form of it.3 And it can happen to people of all ages. In 2017, the identities of more than 1 million children – most of whom were under the age of seven – were used in some type of fraud.4
Professional identity thieves spend their time and energy coming up with new ways to scam unsuspecting people, and many of these con artists are tech-savvy and well-versed in the latest technologies. What’s more, a report from the research firm Gartner found that fewer than one in 500 identity thefts leads to arrest.5
Many people consider identity theft a digital crime that takes place via the Internet. Certainly, it’s become commonplace for thieves to try and steal passwords, intercept Wi-Fi signals, or use various types of malware to gain access to personal information. But would-be imposters also use other methods to swipe personal data, many of which are comparatively low-tech. These can range from clever phone scams and snail-mail theft to old-fashioned pickpocketing and dumpster diving for personal information.
Apart from financial losses, identity theft can damage your credit, cause emotional distress, and require extensive time and effort to resolve. More serious instances of identity theft, like having a falsified tax return filed in your name, can take much longer.6 Experts say it can take up to 33 hours or longer to resolve a case of stolen identity, and that a full recovery can take months or even years.7 Other research indicates that it takes people an average of six months and 100 to 200 hours of personal time to undo identity fraud.8
Even if you take precautionary steps, ID theft can still happen if a company you do business with experiences a data breach. In 2020, 1,001 breaches were reported in the U.S., exposing nearly 156 million individual data records to doctoring or theft.9 Because it’s sometimes beyond your control, it can be a good idea to sign up for credit monitoring services. Even if information is stolen, you’ll be notified and may be in a better position to mitigate some of the potential damage.
Once an ID thief has your personal information, they can use it to dip into your bank account, charge purchases to your credit cards, open new accounts, or pay for medical treatments with your health insurance. A thief can even file a tax return in your name and collect a fraudulent refund. But how can you tell that you’ve become a victim? Here are some tip-offs that your identity may have been stolen:
Unlike credit card numbers, Social Security numbers aren’t easily replaced. They’re also needed to open a new account, file a tax return, and for countless other financial transactions. This makes them invaluable to an identity thief who can steal one and then wait for months or even years before using it to pilfer a bank account or open a new line of credit. By the same token, without a Social Security number it is much harder to assume someone’s identity. You can help protect yourself by refusing to provide yours unless you’re 100% certain of who you’re giving it to and that they absolutely need it. Likewise, try to avoid keeping your Social Security card in your wallet or another obvious location.
Using a firewall and a virtual private network (VPN) can help keep your data secure. Otherwise, any information sent via Wi-Fi can be intercepted.
If you think you may have become a victim of identity theft, there are several steps you can take to minimize the damage. These include:
1 “2020 Identity Fraud Study: Genesis of the Identity Fraud Crisis,” Javelin Strategy
2 “The Aftermath: The Non-Economic Impacts of Identity Theft 2018,” Identity Theft Resource Center
5 “10 Things You Should Know About Identity Theft,” SmartCredit
6 “How Long Can the Effects of Identity Theft Last?,” Experian
7 “10 Things You Need to Know About Identity Theft,” MoneyMiniBlog
8 “How to protect yourself against the theft of your identity,” The Economist