Photo by Gwendal Cottin on Unsplash

According to the FTC, in 2001 there were 325,519 reports of fraud and identity theft. Fast forward to 2019 and there were over 3 million reports of fraud and identity theft. 

As technology evolves, so do the tactics scammers use, becoming more sophisticated and potentially harder to stop. But a little knowledge can go a long way in proactively protecting yourself –– and your finances –– from disaster. 

Check out a few common forms of identity theft to be aware of. 

Type: Credit Card Fraud

Considered the most prevalent form of identity theft by the FTC, there were over 271,000 reports in 2019 alone. 

How it Might Happen 

Unfortunately there are several different ways credit card fraud can occur –– many of which occur while the physical card is still in your possession. Here are a few: 

  • Card skimming:
    A small, discreet device is added to a card reader, usually at an ATM or a gas station terminal. When a card is scanned, the information is captured for later use.
  • Mail theft:
    Thieves sort through mail –– discarded or still in your mailbox –– for account numbers, credit card offers, or anything else they can find to use an existing account or open a new one in your name.
  • Computer hacking:
    Hackers can infiltrate your computer and collect credit card information in a variety of ways –– public wifi, phishing emails, low-security websites, and more.
  • Data breach:
    When hackers find an entry point into a corporation’s database, they can collect the financial information –– including credit card numbers –– of virtually anyone they have on file.

Tips to Protect Yourself 

  • Be smart with public wifi.
    If possible, avoid checking your accounts or performing other important financial tasks when your connection is particularly vulnerable to hackers.
  • Use a VPN.
    A VPN can help create a secure connection between your computer and a private server to help ensure your private financial information doesn’t reach the wrong hands.
  • Use a virtual credit card.
    A virtual credit card gives you a temporary set of numbers you can use to safely make purchases online or over the phone.
  • Protect your security code.
    The security code on the back (or front, in some cases) on your credit card is meant to provide an additional layer of security when your card is not present for a purchase.

Type: Tax ID Theft

Getting a tax refund is great –– especially for the thieves who file a fraudulent return in your name and didn’t have to pay the taxes to begin with. 

How it Might Happen  

Tax fraud is relatively easy to commit. Once scammers get their hands on your Social Security number, they can file a return in your name using their address along with phony income and withholding numbers. You likely won’t discover the identity theft until you attempt to file a legitimate return. 

How do they get their hands on your Social Security number in the first place? Many of the same ways we’ve already discussed: 

  • Data breach
  • Mail theft
  • Computer hacking 

Tips to Protect Yourself 

According to the Federal Trade Commission, there are a few ways you can prevent tax ID theft from happening to you.

  • File your return early during tax season.
    If you’ve already filed a return in your name, scammers don’t have the opportunity to file one fraudulently. 
  • Use a secure internet connection for financial tasks.
    With an unsecure connection, hackers have an easier time getting their hands on your social security number.
  • Be careful when hiring someone to prepare your taxes.
    Do your research and make sure you aren’t handing over all of your sensitive financial information to a scammer.

Type: Child ID Theft

Children might be the easiest targets for identity theft, considering they likely won’t need to access their credit for years –– or even decades. 

How it Might Happen 

  • A family member or friend
    A study by Javelin Strategy and Research found that of the 1 million cases of child identity theft that occurred in 2017, 6-out-of-10 were committed by people the child knew.
  • Data breach
    Retailers and credit card companies aren’t the only entities at risk of a data breach. Your child’s social security number and other sensitive information could be exposed in a medical or education data breach.

Tips to Protect Your Child 

  • Freeze your child’s credit.
    A credit freeze should prevent thieves from opening new credit in your child’s name. This is free to implement, but must be done separately with each of the three credit reporting agencies (CRAs).
  • Don’t share their Social Security number unless necessary.
    According to the U.S. Department of Education, the federal government does not require you  to share your child’s Social Security number when enrolling in school (although the state or local school district might) –– and even if your state or local school does require it, your child cannot be denied entry if you don’t provide it.
  • Check your child’s credit when they turn 16.
    This can give you time to dispute or correct any errors before they apply for a job, car loan, etc.

Type: Medical ID Theft

Medical ID theft – the act of receiving care or prescriptions in another person’s name – might not be on your radar, but it has become increasingly more prevalent in the last few years

How it Might Happen 

  • Medical data breach
    According to the HIPPA Journal, the number of data breaches in which more than 500 medical records were exposed has increased year over year since 2015, with the number of such breaches reaching 510 in 2019.
  • Imposter scams
    A scammer may ask for your insurance or medicare number in a phone call or email, with the promise of offering a free quote, medical service or product. 
  • Theft of social security or Medicare cards
    Whether you lose your insurance or Social Security card, or these numbers are exposed another way, a scammer can attempt to seek care or file claims in your name.

Tips to Protect Yourself 

  • Keep an eye on your medical record and report any errors.
    According to the FTC, under federal law you have the right to know what’s in your medical files –– or, if you are the victim of medical identity theft, to the thief who used your information.
  • Read your insurance reports.
    By staying on top of your insurance reports, you can quickly spot when medical care has been paid for that you haven’t received.
  • Protect your personal data.
    Keep your medical cards and records in a secure area and if you happen to lose an insurance or medicare card, alert your carrier immediately.

TIP: Monitor Your Credit Report 

There are a variety of ways scammers can steal your identity, but by regularly monitoring your credit report, you can spot and mitigate the fraud early. 

Between now and April 2021, you can get a free weekly credit report from each of the three CRAs – Equifax, Experian, and TransUnion. You can also dispute any errors on your TransUnion report for FREE using Upturn. Sign up here. 

[Protect yourself from credit fraud with the facts in our comprehensive guide.]