How to protect yourself from identity theft

What is identity theft?

Identity theft is a crime. It is the theft of your personal or financial details in order to use your identity to commit fraud – like using your accounts, buying items, faking mortgages, taking out leases, or applying for a passport. Your details could be anything from your SSN to your fingerprints.

How can your identity be stolen?

Thieves can steal your identity from any place that contains your personal information, like unsecured websites, corporate and government databases, pieces of mail, social media, and through cyberattacks.

Just imagine. Your birthday was seen on Facebook. Your fingerprints and DNA profile were exposed in a data breach. Your address was found on your driver's license that you lost last week. And you gave away your SSN and bank details to an unknown caller you believed to be from your bank. Do you see how easy it is to rake the internet for pieces of your identity? Thieves could use any of this information to commit medical insurance fraud, apply for loans, abuse your credit score, and more.

Seemingly unimportant details like your birthday or home address should be secured with as much tenacity as your banking passwords. Never underestimate a hacker's patience and diligence. A little paranoia is better than a financial disaster.

What are the chances of falling victim to identity fraud?

Unfortunately high, especially if you live in the US. If we combine statistics from a 2019 Javelin Strategy & Research report with identity fraud complaints collected by the FTC, we can see how prevalent this crime has become.

In 2020 alone, identity fraud resulted in losses of more than $56 billion. The amount of cash stolen seems to be directly linked to and driven by the COVID-19 pandemic. Of the $400 million lost in COVID scams, 70% has been attributed to identity theft.

One of the main pitfalls for Americans in 2020 involved government benefits. Stimulus cheques have become a feature of life in the US during the pandemic. And it’s easy to see why so many fall victim to stimulus scams; when an email comes through offering a life-saving cash injection and all you have to do is enter your name, address and bank details, you might not think twice.

Identity fraud and children

Identity thieves can sink even lower than taking advantage of the financially vulnerable in a pandemic. Alarmingly, children are 51 times more likely to be a victim of identity fraud than adults.

The fact that children never receive credit or financial reports can make this particular form of identity fraud go unnoticed for potentially years. For the unluckiest of victims, they won’t discover the fraud until they’re adults and have applied for their first credit card. By that point, their credit score has already been ruined by scammers and thieves.

5 common ways identity thieves get hold of your information

1. Data breaches

   A data breach occurs when someone gains unauthorized access to a company’s data. The hottest commodities for hackers are full names, credit card numbers, and Social Security numbers. There were 540 data breaches in 2020 involving businesses, hospitals, government services, and millions of citizens' private information, most of which is sold on the dark web for a few dollars.

2. Unsecured browsing

   Avoid websites without the S in “https” in their URL. “S” stands for secure, which means that the site encrypts visitors’ information. Unsecured sites will leak your information to hackers lurking in the network, or sometimes to the shady owner of the website itself. Also, avoid public Wi-Fi, as it's never secured. If you want to secure your connection, use a VPN (short for Virtual Private Network).

3. Caller ID spoofing

   This is when a scammer changes their caller ID to make you think it's your bank, for example. After making up a bogus scenario, they’ll demand your banking details, personal information, and anything else they desire. To soothe any concerns, hang up and call your bank directly.

4. Mail theft

   Long before most things went digital, identity thieves intercepted the postal system, hoping to find credit cards, bank statements, and other personal documents. Avoid sending personal information in the mail and always shred important documents — rummaging through your trash is not beneath an identity thief.

5. Card skimming

   Did you know that your card could get cloned at an ATM? Identity thieves place a skimming device over the card slot that reads the information from the card’s magnetic strip and transmits it back to the scammer. Your details can then be used to make purchases. It’s worth educating your children about card skimming and identity theft.

How can you find out if someone is using your identity?

By now, you can probably see how easy it is to get your identity stolen. But how do you know if it actually happened? Here’s what to look out for:

• You’re denied credit despite having an excellent credit rating: your credit score will have suffered if scammers took out loans in your name. Use a credit monitoring service and keep an eye on any sudden drops in your credit score.

• You stop getting your bills by mail: this could be a sign that your sensitive mail is being stolen through the postal service, which can lead to identity theft.

• You’ve been informed that you’ve been part of a data breach: Your logins or other personal information could have been stolen from a company's database and used to commit fraud. You can see if you’ve been part of any online data breaches by typing in your email address here.

• You notice unusual bank transactions on your statement: Even small, unusual transactions should be taken seriously, especially since scammers will avoid taking large amounts to remain covert.

What is the best identity theft protection?

You can either brush up on your personal security or use an identity protection app to help you stay more secure. If you ask us you can do everything identity theft apps can do, but for free. Although, for some, an identity protection app can help share the load of trying to stay secure. So are identity protection apps better than learning how to secure your identity yourself? Let’s weigh up both:

Is it worth getting identity theft protection?

For a monthly fee ranging from $7 to $35, identity protection apps let you freeze your credit and notify you if you’re included in any data breaches. They’ll monitor your finances and send you real-time updates. As a bonus, most of them include insurance, offering up to $1 million if your finances get stolen. They can also track your SSN for signs of social security identity theft.

However, relying on an identity theft protection app is not 100% fool-proof.

Identity theft apps are great for unifying your finances, letting you manage everything from one screen. However, some state in small print that they’re not able to monitor all transactions at all businesses, so some fraudulent activity may go unreported. Reimbursement and compensation plans all depend on your subscription, and some of the bigger compensation packages of $1 million or more are for the expenses on lawyers and experts if needed. Also, lower plans will provide less monitoring, so there’s not much point unless you’re going to pay for the highest subscription.

If you know how to protect your identity yourself, you can get most of these benefits for free. you can use your banking app to enjoy the same live monitoring and updates for free. Companies are legally required to notify you if your details were compromised in a data breach anyway, and you can easily check your own credit reports. Your bank also has fraud compensation plans in place to reimburse money you’ve lost to fraud.

How can you protect yourself from identity theft online?

By the time an identity theft protection app has notified you of suspicious activity, it could be too late. If you want to know how to prevent identity theft, here are 6 quick tips to protect your identity:

1. Use impenetrable passwords: Use different passwords for each account and store your passwords in an encrypted password manager (never in your browser). Simple tip: a 10-character password can be cracked in a few months in a brute force attack, and a 12-mixed-character password takes about 200 years – not bad for two extra letters.

2. Download your bank’s app: Use it to track your money, paying particular attention to any unusual deductions. Your app will notify you of every transaction in real time anyway – just make sure to look.

3. How to report identity theft: Report anything unusual to the US Bank Fraud Liaison Center at 877-595-6256. You should also contact your bank’s fraud department if you’ve accidentally clicked on a suspicious email or given away your account details to a possible fraudster. Beware that there is a small window for you to report fraud to your bank, especially if you’re hoping to get your money reimbursed from identity theft.

4. Respond to data breaches: Change your username and password immediately if a company informs you that your details were involved in a data breach. If you’ve used the same one elsewhere, change it there too.

5. Keep an eye on your credit score If you’re already keeping on top of your finances, checking your score won’t hurt you. You can check your credit score online for free. Any sudden drops in your score could indicate your identity was used for fraudulent loans.

6. Use a VPN: Wherever you go online, your information is at risk. The NordVPN app, for example, instantly encrypts your traffic so it can’t be intercepted and hides your IP address for online privacy, which is great for whenever you’re paying for things online. It also makes public Wi-Fi secure when you’re out and about (which is why you need a VPN on your phone) and can help reduce spam ads, which are often loaded with malware.

The best identity protection is vigilance, which is essentially what identity theft protection apps offer. If you secure your personal information online with a VPN, use super-strong passwords and pay attention to your finances — you’ll have much less to worry about.

Read the original blog post on NordVPN.