In 2019 alone, the Federal Trade Commission received over 650,000 reports of identity theft from U.S. consumers—a sharp increase from the 444,358 cases reported back in 2018. From cases of credit card fraud to bank, tax, and loan and lease fraud, it’s clear that identity theft ran rampant through 2019, but why? Experts speculate that thieves have adapted to our tech-centric lifestyles and are honing in on digital spaces in order to take advantage of consumers’ financial and personal information.
But the increase in identity theft cases doesn’t mean you’re doomed. By implementing measures to protect your identity, you can decrease your odds of becoming a victim of identity theft-related crimes.
In this post, we’ll answer some important questions regarding identity theft and identity theft protection, including:
What is Identity Theft Protection?
Identity theft protection refers to services and behaviors that aim to reduce the likelihood that consumer data is compromised.
- Identity protection services: Services offered by companies to minimize consumer exposure to identity theft crimes. This includes monitoring services, which are preventative, as well as recovery services, which help consumers recover if they’ve been a victim of identity theft.
- Identity theft protection behaviors: Ways consumers can arm themselves against identity theft, including shredding documents, monitoring credit card and bank statements, and safeguarding personal information, like your Social Security number.
According to the Federal Trade Commission, identity protection services should be viewed as monitoring and recovery measures, not as guaranteed identity theft protection. While monitoring can help alert you to signs that your identity has been compromised, it can’t promise that you won’t be targeted. And if your identity has been stolen, recovery services can help you regain control over your identity and finances.
Why is identity theft protection important? (Impacts of identity theft)
Taking measures to protect yourself from identity theft is important if you want to minimize the risks and impacts of having your identity stolen, but what does identity theft actually look like?
According to the Federal Trade Commission’s annual report on consumer safety, the most common identity crime reported in 2019 was credit card fraud, followed by general identity theft and loan and lease fraud.
The effects of identity theft vary depending on the type of crime committed. With your stolen identity, a fraudster could:
These are just a few of the risks of having your identity stolen, and more importantly, reasons why you should take action to protect your identity. Now that you know what identity theft protection is and why it’s important, let’s discuss some of the identity protection services and precautions you can use to safeguard your ID.
What Types of Identity Protection Services Are There?
As we mentioned before, the Federal Trade Commission categorizes identity protection services into two sections: monitoring and recovery. These services can help consumers recognize identity theft sooner and enable them to recover faster. Here’s the lowdown on how identity protection services work.
Identity monitoring aims to minimize the impact of identity theft by alerting consumers of suspicious behavior related to their accounts and information. If the identity theft protection service finds that your information shows up on court or arrest documents, unauthorized loan applications, check cashing requests, or on suspicious social media or the dark web, among other places, you’ll be alerted and required to verify or deny the transaction.
Identity theft insurance
If your identity is compromised, identity theft insurance may help you soften the financial blow. Identity theft insurance accounts for the expenses you may incur in order to rectify issues related to your stolen identity, including, postage, notary, and printing fees. Sometimes, ID theft insurance will cover a percentage of your lost wages and legal fees, depending on your level of coverage.
Credit monitoring is similar to identity monitoring, except that it only focuses on activity that appears on your credit report. For example, a credit monitoring service would likely alert you if a new line of credit was opened under your name, but it would not show if a fraudster filed a false tax return under your identity (that would only appear on an identity monitoring report).
Identity recovery services
Identity recovery services are designed to help consumers regain control of their identity after it’s been compromised. These services typically match customers up with a representative that helps you go through the necessary steps to resolve identity theft issues.
Important note: Identity theft services can be purchased from vendors, but there are plenty of free resources consumers can use to help protect their identity. Be sure to consider your personal and financial situation to find the most effective identity protection measures for you!
How Else Can I Protect My Identity?
Identity protection services are just one way you can protect your identity and in turn, your finances. In addition, you can exercise some common sense and adjust your behaviors to protect yourself! Here are a few helpful tips to safeguard your identity:
- Keep your SSN and other sensitive information secure and don’t give it out to strangers over the phone, email, or text.
- Don’t leave your wallet or purse unattended, and don’t carry your Social Security card with you.
- Stay safe on social media by not posting your date of birth, mom’s maiden name, your first pet’s name, and other details that can be used to hack into accounts.
- Pay attention to alerts from your bank and credit card issuer.
- Use multi-factor authentication when possible, and change passwords regularly.
- Password-protect your electronic devices.
- Use security freezes and fraud alerts to protect your accounts as needed.
- Keep up to date by checking your bank statements and credit report on a regular basis.
- Opt-out of mailed credit card offers which may contain useful personal information.
- Act quickly if you suspect you’ve been a victim of identity theft.
ProTip: Mint allows you to not only monitor your budget, but also gives you a bird’s eye view of your accounts to help you protect your information and your money.
Identity Theft FAQs
To help you stay vigilant against identity theft, we’ve compiled some frequently asked questions that can help you protect your identity and act responsibly if your information has been stolen.
Who is most vulnerable to identity theft?
According to recent data, consumers aged 30-39 reported the most instances of identity theft in 2019, with 170,255 in their age group. However, security analysts warn that children, college students, and the elderly are also at-risk targets for identity theft. Here’s why.
- Children’s identities are less likely to be monitored.
- College students are typically starting to apply for new lines of credit, which could expose their data to the wrong individuals.
- The elderly sometimes share their information with untrustworthy caregivers and are generally considered more susceptible to fraudulent schemes.
What are the warning signs of identity theft?
Finding out if you’ve been a victim of identity theft isn’t always easy to do—it’s a crime of secrecy, after all. But USA.gov recommends paying attention to these warning signs in order to protect your identity and minimize the impact of becoming a victim:
- You receive bills for products or services you didn’t buy
- You notice discrepancies on your bank or credit card statement
- You’re solicited by a debt collection agency for accounts you didn’t open
- You receive notice that you’ve been denied for a loan or other line of credit that you didn’t apply for
What should you do if your identity was stolen?
If you believe your identity has been stolen, it’s critical that you take action ASAP by following these steps:
- Contact companies where the fraudulent activity occurred.
- Place a fraud alert with one of the three major credit reporting bureaus (TransUnion, Equifax, Experian).
- File an identity theft report with the FTC.
- File an optional report with your local police department.
- Address damage by
- Alerting your credit card issuer or bank of fraudulent charges.
- Closing new, unauthorized accounts.
- Correcting your credit report.
- Follow up with appropriate bureaus as needed.
- Identity protection is important to minimize your risk of becoming a victim of identity crimes, which could include, credit card fraud, loan and lease fraud, bank, and benefits fraud.
- Consumers can purchase identity protection services, or take advantage of free resources to protect their identity.
- Additionally, by following secure practices like using multi-factor authentication, changing your passwords, and keeping your SSN in a safe place, you can reduce your risk.