Identity theft is a huge problem in the United States — in 2019, there were over 13 million victims of identity theft costing these consumers over 3.5 billion dollars out of their own pockets.
However, it’s important to know that “identity theft” is an umbrella term that could refer to a number of different problems.
Because there are so many types of identity theft, there can be huge implications in all areas of a person’s life. From thieves piling up your credit card debt to medical debt to criminals pretending to be you when they get arrested, identity theft has the power to completely disrupt your finances, your credit, your employment, your security clearance, and other areas of your life.
Understanding where you’re most vulnerable to theft and taking steps to protect those areas is going to be your greatest protection against identity theft.
In this post, we’re going to help you do just that. Keep reading to learn about five of the most common types of identity theft and how to best protect yourself.
1. Account Takeover
Account takeover is just what it sounds like: someone fraudulently gains access to one or more of your existing accounts and uses it how they wish. They could transfer the money to their own account, make transactions, or even use it to access other accounts you may have.
According to one study, this type of fraud accounts for over 50 percent of all existing account fraud, making it one of the biggest threats to you.
Thieves might get into your account in all sorts of ways. Identity theft can start with a lost wallet, forgetting to change your mailing address when you move, or using weak passwords and security questions.
While there are some sources of personal information you can’t do much about, like a data breach in which someone else loses your personal data, there are steps you can take to protect yourself:
- Don’t use obvious passwords, like dates of birth or “Password123”. This was once again among the most common passwords of 2019.
- When you’re given the option to set security questions, don’t use obvious answers, like your mother’s maiden name – they’re too easy for thieves to find out with a bit of research.
- If you lose your credit card, report the loss as soon as possible.
- Beware of “phishing” emails and calls that pretend to be from your bank trying to get you to give up your passwords.
- If something suspicious happens – like account statements suddenly stop coming – take action.
You’ll also need to be careful about who you share this information with along with protecting your email that may be connected to your financial accounts. When discarding bank statements or account information, shred your papers to avoid thieves finding passwords or other relevant information in the trash.
2. New Account Credit Card Fraud
Credit card fraud can happen anywhere, but here in the US, it’s a huge problem: over 46 percent of all credit card fraud happens here in the United States.
New account credit card fraud is when someone opens a brand new credit card account in your name, without you knowing. To do this the thief would need to know a bit about you, such as your Social Security Number and date of birth.
Once they have your information, the thieves can try to open new accounts with credit card companies. If they succeed, they’ll run up the balance as high as they can, and leave you to foot the bill. This can have a huge impact on your credit report and can rack up a ton of credit card debt — all in your name.
The good news is that you aren’t responsible for fraudulent transactions. The Truth in Lending Act says that credit card holders can only be liable for $50 for fraudulent transactions – and then only if the transaction happened because you failed to report a lost or stolen credit card.
3. Familial Identity Theft
Familial identity theft occurs when a family member or relative steals the identity of another. Oftentimes, this can be easier for the person committing fraud because they can more easily access your information.
This type of identity theft can refer to any type of fraud committed by a family member, including, but not limited to:
- Opening an account using a relatives name
- A husband or wife forging their spouse’s signature on loan applications
- Adult children making unauthorized purchases on parents’ accounts
- One sibling using another sibling’s driver’s license to purchase alcohol
- A parent using their child’s information & credit score to apply for accounts, credit cards, and loans
If you suspect familial identity theft on one of your accounts, you need to report it immediately as well as check other areas and accounts for fraud.
RELATED: Learn more about how to handle familial identity theft in our article here.
4. Tax-Related Identity Theft
Another common type of identity theft occurs when someone gains access to your information and social security number and uses it to file fraudulent tax returns in your name to collect refunds.
The good news is that there are systems in place to protect you if this happens.
Many times, fraudulent tax returns are caught by the IRS. If someone attempts to file a return in your name and it’s caught by the IRS, they’ll send you a form explaining the situation and asking for verification of the return. They usually won’t file it until they get a confirmation from you that it is or is not fraudulent.
This gives you a chance to recover your information and apply further protections so it cannot be stolen again.
If the fraudulent return is accepted by the IRS, when you file your own taxes, you’ll likely receive an error or notice that you’ve already filed. If this happens, you’ll need to fill out an IRS Form 14039, which is the Identity Theft Affidavit. Learn more about that here.
Unfortunately, even if you know that your social security number has been stolen and used for identity theft, the IRS won’t let you ask for special security measures until you have already been a victim of tax identity theft. If you’re worried about this kind of identity theft, the most proactive thing you can do is to file your return early.
5. Medical Identity Theft
Medical identity theft refers to someone fraudulently using your information or insurance to see doctors, get medications/prescriptions, file claims, etc.
Many aren’t even aware it’s happening until they get surprise medical bills in the mail or find their credit report hit with a ton of medical debt.
This can impact your credit and even your ability to receive your own medical care and prescriptions.
Once you notice errors or fraudulent charges or claims, report them immediately to your insurance and find help from an identity theft lawyer or medical debt collection defense attorney.
An Identity Theft Lawyer Can Help with Many Types of Identity Theft
These are just a few of all the types of identity theft you could fall victim to. Protect yourself with strong passwords, smart security with your info, account monitoring, and, if you need, an experienced lawyer to help you out.
The lawyers at the Holland Law Firm have years of experience with all types of identity theft. If you believe your identity has been stolen or you’re experiencing debt as a result of the fraud, don’t hesitate to reach out.