Identity theft is not a new concern as forms of it have been around for decades. Unfortunately, that doesn’t mean the need for vigilance is less. If anything, now more than ever consumers should be aware of identity theft and the havoc it can wreak.
Recent statistics from the Federal Trade Commission (FTC) report just under 805,000 cases of identity theft for 2023 through September 30th. Of those cases, nearly 40% of the cases were credit card fraud. Fortunately, the total number of cases reported in 2023 are trending down from 2020 and 2021, which reached approximately 1.4 million complaints for each year. Many of the complaints were a result of the COVID-19 pandemic and subsequent government benefit programs. Even so, 2023 identity theft complaints are far higher than any pre-pandemic year dating back to 2001.
So, what is identity theft? And what are some common examples?
Most simply, identity theft occurs when someone uses your personal data (i.e., name, Social Security number, birthday) to impersonate you and use your information to steal from you.
- Credit Card Fraud: occurs when a criminal uses your personal information to apply for a credit card.
- Taxpay Identity Theft: occurs when a criminal uses your Social Security numbers to file a tax return and steal your tax refund.
- Financial Account Takeover: occurs when a criminal uses your personal data to access financial accounts, often changing passwords so you lose access.
- Imposter Scams: occur when a criminal pretends to be calling from a government agency, tech support, debt collection, charity (to name a few) and threatens legal action, demands payment or personal information.
Steps to protect against Identity Theft:
- Freeze your credit: freezing your credit with the three major credit bureaus (Equifax, Experian, TransUnion) restricts access to your records so new accounts cannot be opened in your name. The freeze can always be temporarily lifted if you need a new line of credit.
- Watch for Phishing and Spoofing: be alert to phone calls and emails that appear to be legitimate but are trying to induce immediate action.
- Strong Passwords and Dual Authentication: use a password manager to create and store complex passwords and avoid reusing passwords. Add an authenticator application to reduce your risk and keep accounts safeguarded.
- Review credit reports: check to make sure your accounts are being reported properly and double check for accounts you don’t recognize.
- Shred personal data: investment, bank, and credit card statements should not be placed in garbage or recycling bins, rather they should be shredded.
What to do if you are a victim:
- File a report at the FTC’s website, Identitytheft.gov
- Place a fraud alert by contacting one of the three major credit bureaus, who will in turn notify the other two credit bureaus.
- Correct your credit report, if necessary, by writing to each of the credit bureaus. Be sure to include a copy of the FTC Identify Theft Report and proof of your identity.
- Consider subscribing to an Identity Theft Protection Service. These companies can provide monitoring services and alert you if new credit inquiries are received and new accounts are opened in your name.
It is impossible to stop all identity theft but being diligent with your personal information and employing some of the steps outlined here, you can take proactive actions to help reduce your risk!
As always, please contact your Joseph Group Advisor if you have questions, we are here to help!
Written by Matt Zimmermann, Client Advisor