Identity theft is a growing problem in the digital age. There are more ways now than ever before for thieves to access your personal information.
Identity theft refers to any crime where a thief is able to replicate your personal information, typically for financial gain. Many identity thieves use scams to trick their victims and open up credit cards or similar financial accounts in their name, accruing a great deal of debt and saddling it onto the victim.
Based on a 2020 study by Javelin Strategy and Research, an estimated 1 in 20 Americans were victims of identity fraud. Not only is identity theft becoming more common, but the victims are reporting larger losses.
While identity theft can be scary, there are several steps you can take to safeguard your identity. A large part of preventing identity theft involves remaining vigilant.
Thieves are always coming up with new scams or searching for new vulnerabilities to access your information. There are a couple of techniques and services you can use to both identify potential fraud and reverse any damage if your identity is compromised.
Credit Card Fraud Detection
Constantly monitoring your purchases can be a difficult task. Fortunately, there are many digital tools to combat identity theft.
The majority of credit cards offer fraud detection as part of their services. Credit card fraud detection refers to any sort of policy or tool to actively monitor your credit card.
Companies use a mixture of artificial intelligence and machine learning to detect spending irregularities. If an irregularity occurs, your credit card is temporarily frozen and you are notified of the expense.
If it was a legitimate expense, you confirm you made it; otherwise, the expense is canceled. Fraud detection is typically a free service, so there is no reason to deny it if it is offered.
Free Credit Reports
Fraud detection can be a great way to stop immediate identity theft, but some scams are subtler and take place over a long period of time to get around detection services.
Long term identity theft is often much harder to prevent. It is also difficult to prove the charges were not made by you.
One way to catch this type of identity theft is to check your credit score frequently. When you are the victim of identity theft, your credit score can take a hit because of the identity thief opening up new accounts in your name and borrowing credit.
When you get a credit report, you not only see your credit score, but also what caused your score to drop.
A common reason for your credit score to drop is due to unpaid debt or too many credit cards taken out in your name. Your credit report also lists all of the credit cards currently in your name, which is one way to identify whether a thief has stolen your identity and created new accounts.
In some cases, you might be required to pay for a credit check. However, the three major credit bureaus are required to offer free credit reports once each year. This includes Equifax, Experian and TransUnion.
If you were the victim of identity theft, you may be eligible to get any credit expenses reimbursed as long as you can prove they were performed as part of an investigation.
Password Protection Services
Many reported cases of identity theft involve a digital scam. With more purchases taking place online, identity thieves are targeting login information on your computer, phone or tablet.
Phones are particularly popular for identity theft because the majority of apps automatically store all your login information, whether or not you are aware. If you use the same password across multiple accounts, you are even more vulnerable.
Once a thief gets one password, they will typically attempt to use the password across multiple websites. If you use the same password, especially if it is shared with your email, thieves can access everything else linked to your account.
Creating a strong password is helpful, but not a foolproof way to stop identity thieves. With keylogging tools, it does not matter how complex your password is because all your keystrokes are recorded and sent to the thief.
A much stronger option is to set up two factor authorization. With two factor authorization, when you attempt to login to your account, you must submit a second, randomly generated password. The password is sent to a separate device, usually by text or email.
To physically protect your phones or tablets, set up a fingerprint scan so if the device is stolen nobody else is able to access it.
Updating your Software
Another way to prevent digital identity theft is keeping your software updated.
The majority of software updates are security updates to make it harder for identity thieves to hack into your account. Most software will automatically update, but some require you to either manually update or opt into automatic updates.
Avoiding Mail Fraud
It may seem like a simple step, but an easy way to prevent identity theft is to keep up with your mail.
With more information being exchanged digitally, it is not uncommon for individuals to forgo checking their mail every day. Even if you are not paying bills through the mail, plenty of personal information is still sent through the mail.
Aside from bills, healthcare and government documents are the biggest targets. Identity thieves may also use pre-approved credit offers to falsely open up an account in your name.
If you are unable to check your mail frequently, consider getting a Post Office or USPS approved mailbox.
With either option, your mail is safely stored until you decide to access it. If you are going away for a long period, make sure you have a friend or trusted neighbor collect your mail for you.
Whenever possible, consider going paperless to reduce how much mail you receive. Most utility, credit card companies and lenders allow you to opt into paperless billing.
Not only does this offer more protection, but it typically makes it easier to make and track your payments.
If you are unable to go paperless, make sure you shred any documents with identifying information when you throw it out. Some identity thieves search through garbage for intact documents to steal your identity.