What is Identity Theft?
Identity theft occurs when a person gains access to your personal information and misuses (or attempts to misuse) it for their own gain. This may include making purchases on your current credit card or using your social security number to open a new credit card or obtain a loan. In 2014 alone, 17.6 million people age 16 and older fell victim to identity theft.
Identity theft has become an increasingly prevalent issue in recent years. According to the National Bureau of Justice Statistics, in 2014 alone, 17.6 million people age 16 and older —r oughly 7% of Americans in that age group — fell victim to identity theft. Identity theft can take a number of forms, from a stolen wallet to a store-wide data breach. To protect yourself, discover more facts about identity theft, common causes, warning signs, and prevention tips below.
Also referred to as identity fraud, identity theft occurs when a person gains access to your personal information and misuses (or attempts to misuse) it for their own gain. This may include making purchases on your current credit card or using your social security number to open a new credit card or obtain a loan.
Common Causes of Identity Theft
Identity theft can happen in a variety of ways, but three big triggers include:
Lost or stolen personal documents
If your wallet, purse, or passport has gone missing or been stolen, you’re susceptible to identity fraud. Other forms of theft via personal documents are less obvious: identity thieves might steal your mail or dig through your garbage to obtain your social security or bank account numbers.
Insecure online data
As consumers handle more and more banking, shopping, and personal communication online, the risk for identity theft grows. Common scenarios include if you enter your credit card or bank account numbers into an insecure site, or use a weak password or the same password across multiple websites.
Company-wide data breaches
You’ve probably heard news stories recounting data breaches that affect shoppers at national retailers, or registered users of large websites. In a typical data breach, cyber criminals hack into a company’s private records to obtain its customers’ or users’ personal data, such as social security and credit card numbers.
Warning Signs of Identity Theft
Some warning signs of identity theft emerge quickly. Few people will go very long without noticing that their wallet or purse has disappeared. If you review your monthly credit card statement, you might see strange charges that you or a family member did not make. Companies hit by a data breach usually notify potentially affected customers in a letter or email right away.
However, in some instances, it can take months for identity fraud to become apparent—for instance, when the thief has used a victim’s personal information to set up a new mortgage or line of credit. By consequence, it’s important to acquaint yourself with the various signs that you could be a victim of identity fraud.
How to Prevent Identity Theft
It may seem time-consuming to research and adopt best practices to prevent identity theft. However, identity theft prevention will ultimately save time in the long run. The work necessary to clean up identity fraud can be long and difficult. To save yourself the stress, start adopting common sense tips, such as keeping your personal documents in a safe place, shredding financial statements, using a variety of complex online passwords, and being mindful of where and when you share your personal information. It’s also a good idea to learn some of the more rigorous best practices, including opting out of pre-approved credit offers, and looking into identity theft insurance and protection services.