What is Identity Theft and How did it Become Such a Big Problem?

Identity Fraud

Have you ever had your identity stolen? Over 16 million people in the United States alone were victims of identity theft in 2017, and the numbers keep rising. In our high-tech world, we are more vulnerable to having our personal information stolen. Here’s what you need to know about identity theft, and what you can do to protect your information.

What is Identity Theft?

Identity theft is when someone steals personal information and then uses it to pose as another person. They often use the information to make purchases, open accounts, or even to give false identification to police.

There are two main categories of identity theft: true-name and account takeover. In true-name identity theft, the imposter uses personal information to open new accounts in the victim’s name. These might include credit card, checking, or online shopping accounts. An account takeover is when the thief uses the information to access someone’s existing accounts. Then they will run up large bills on the person’s account.

Common examples of identity theft are:

  • Tax-related identity theft
    When an imposter files a false tax return with a stolen Social Security number.
  • Medical identity theft
    In these cases, the perpetrator steals health insurance information to receive medical care on their victim’s account.
  • Child identity theft
    When a child’s Social Security number is stolen and used to apply for government benefits and to open accounts.
  • Senior identity theft
    A type of identity theft specifically targeted at senior citizens.

How do Criminals Access Personal Information?

Phishing Fishhook with PasswordThere are many different ways criminals can obtain personal information. Believe it or not, low-tech methods like dumpster diving and stealing people’s mail are still used. By taking torn up bills from your trash, criminals can often get enough information to steal your identity. Or they might take pre-approved credit card offers in your mail and open an account in your name. And some resort to pickpocketing and stealing purses to get other people’s information.

Other methods are more high-tech and include phishing, data breaches, and hacking login information. Phishing is when cybercriminals pose as a bank or other institution and contact you by email, text, or a phone call. They try to convince you to give them your personal information or account details. Then they use the information to access your accounts. In more recent years, data breaches have become common. When these occur, thieves can easily get access to your information.

These are just some of the common ways criminals can access your information. Unfortunately, the number of possible methods are virtually unlimited.

How Prevalent is Identity Theft?

Identity theft is common and the number of people affected by it is rising. A 2018 online survey by The Harris Poll revealed that close to 60 million Americans have experienced identity theft. And a 2018 study by Javelin Strategy & Research, found that the number of victims in the U.S. reached an all-time high of 16.7 million in 2017. What’s even more troubling is identity thieves are using more complex methods to steal personal information. Account takeovers in particular are increasing, and the number tripled between 2016 and 2017. As the methods of identity theft become more sophisticated, the numbers keep rising.

How Did Identity Theft Become Such a Big Problem?

HackerIdentity theft has been around a long time but is much more of a problem in our high-tech world. Criminals used methods like dumpster diving, pickpocketing, or phone scams years before the internet was around. Unfortunately, with the rise of the internet and more advanced technology, identity theft has become far more common. It is also much harder to track these criminals, and many of them are never caught.

Now that we have the internet, much of our personal information is transmitted online. We use online banking, make purchases from online retailers, and pay our bills using online accounts. While these practices are convenient, they often compromise our personal information. By transmitting data electronically, individuals and businesses are more vulnerable to hackers and cybercriminals.

In recent years, data breaches have become a major threat to our personal information. Data breaches are when hackers access and extract secure, confidential information from a company’s system. The hackers can then use the data in any way they choose. As a result of data breaches, confidential personal information can be released.

Unfortunately, data breaches are on the rise as well. The Identity Theft Resource Center tracks data breaches and regularly publishes their findings. In 2017, they reported a record high of 1,579 data breaches in the United States. These breaches resulted in the leaking of over 178 million records. One of the largest breaches involved the credit reporting agency Equifax. This breach affected 147.9 million people and exposed names, Social Security numbers, driver’s license number, and other extremely personal information.

Can You Protect Yourself Against iIdentity Theft?

Given all the ways criminals can steal your identity, it’s impossible to protect yourself completely. No single person can prevent identity theft, because some types of security are out of your control. With data breaches, for example, there is nothing you can do to prevent them from happening. That said, there are steps you can take to lower your risk. Here are some things you can do to reduce your risk of identity theft online and offline.

Protecting Your Identity Online

  • Be careful of how and where you share personal information online.
  • Only shop on secure sites that have “https” in the URL.
  • Use strong, unique passwords for all your online accounts. Do not use the same password for multiple accounts.
  • Be careful when using Wi-Fi. Avoid using your street name when naming your network, and choose a secure password. Avoid using public Wi-Fi networks to log into your accounts or make transactions. If you must use public Wi-Fi, setting up a VPN is strongly advised.
  • Never enter personal information on a public computer.

Protecting Your Identity Offline

  • Watch your wallet and purse when you are in a public location.
  • Be careful when paying with a credit or debit card and never share your PIN with anyone.
  • Shred any documents with personal information before throwing then out.
  • Secure your mailbox.
  • Keep your important personal documents in a locked box.

How do You Know Your Identity Has Been Stolen?

There are several signs that can tell you your identity has been stolen. It is important to take action quickly if something like this happens to you. Every hour that you do not take act can result in more financial damage. Here are some signs that can mean you have become the subject of identity fraud.

Unfamiliar Invoices

When you receive invoices for products you never ordered this should alarm you. It can mean your bank data has been stolen and the criminal is buying products under your name. The same is true for any bank statements you do not remember.

Unfamiliar Delivery Notices

Another signal can be that you will get delivery notices for products you haven’t ordered. The criminals have probably hacked your account and bought products with your hard-earned money.

Unusual Account Activity

A third signal can be that you get emails from services saying that they have spotted unusual activity on your account. This might also be an email that informs you that your account details have been changed. If it wasn’t you that changed this information, it is probably time to take action.

Signs on Social Media

The final way you can often tell you that your accounts have been hacked is through social media. Friends and family might approach you about some weird messages you have been sending out. Hackers often take hold of Facebook, Twitter, Instagram, or Snapchat accounts to scam people. If they have access to your account, they can send messages to all your friends and family asking for money. Because of the personal factor people will be inclined to give more easily. Social media accounts may also be used to spread corrupted links and hack even more accounts.

What to do When Your Identity Has Been Stolen?

Being the victim of identity fraud can be extremely frustrating. If you suspect this is the case it is vital to act quickly. The following steps will help you minimize the damage as much as possible.

Block Your Bank Account

If your banking data has been stolen it is important to immediately call your bank to block your account. This way you can prevent the criminals from spending more of your money. Your bank can probably help you with the follow-up and getting your account back.

Getting Back Accounts

If you are the victim of online identity theft it is best to log into your accounts and change the passwords as fast as possible. If you can no longer log in to your account, contact the customer support of that online service. Explain the situation to them and try to get your account back.

Report the Fraud

If you have secured your online accounts and back account it is important to report the fraud to the police. Try to gather as much evidence as possible and explain the situation to them. They might be able to find the culprit if you give them enough information. Moreover, in some cases the criminals will use your identity to commit even more crimes. If this is the case it is extremely important that you contact the police to convince them it’s not you who is committing these crimes.

Contact Debt Collection Agencies

Identity fraud can get you into great financial problems. You might even get debt collectors knocking at your door. If this is the case it is a good idea to take to these agencies and explain the situation. If you don’t the debt will simply increase. Tell them you can been the victim of identity fraud and perhaps they can help you out. In most cases the debt collectors will be sympathetic as long as you are open with them about what is happening.

Final Thoughts

Identity theft is becoming more prevalent, and cybercriminals are using more advanced methods to get personal data. You can take steps to secure your personal information, but no one person can prevent identity theft.

Even if you do all you can to protect your data, some aspects of security are out of our control. The rising number of data breaches demonstrate that point. However, by taking the right precautions, you can reduce the chances of identity theft happening to you.

Tech journalist
Tove has been working for VPNoverview since 2017 as a journalist covering cybersecurity and privacy developments. She has broad experience developing rigorous VPN testing procedures and protocols for our VPN review section and has tested dozens of VPNs over the years.