What is Identity Theft? Examples & How to Protect Yourself

Identity theft is becoming increasingly prevalent with every passing year. Even if you haven’t yet been affected by the crime, it’s important to realize that your personally identifiable information (PII) is extremely valuable to cyber thieves.

A stolen identity can have awful consequences and clearing up the resulting mess may take weeks, or worse, even months! In this article, we’ll discuss what identity theft is all about and how you can take your identity theft protection up a notch to keep this from ever happening to you.

What is Identity Theft – A Definition

Identity theft, also commonly known as identity fraud, occurs when an imposter steals your personal information, like name, date of birth, phone number, and Social Security Number, in order to commit fraud or obtain financial benefits.

They might steal money from your bank accounts, take out credit in your name, set up fake online accounts, or make unauthorized purchases by projecting a fraudulent identity. It can happen to anyone if they aren’t careful enough, so guarding your information closely is crucial.

5 Signs That Someone Has Stolen Your Identity

Now, you may wonder, “How can I even tell if my identity has been stolen?” Well, there’s no definite answer to that question. After all, there are a myriad of signs which may indicate that your identity is compromised. Regardless, the following are some clues of identity theft:

  1. You’re not receiving statements, bills, and other mail.
  2. You’re denied credit or offered unfavorable terms.
  3. You’re getting bills or notices for purchases you haven’t made.
  4. You’re noticing unauthorized transactions on your bank or credit card account.
  5. You’re being rejected for legitimate medical claims because of reaching your benefits limit.

Types of Identity Theft

Many different kinds of identity theft can occur, and so anyone can become a victim. As such, the more you know about them, the better you’ll be able to protect yourself. Below, we have discussed the most common types of identity theft that you could encounter:

Medical ID Theft

A type of insurance fraud that involves an individual acquiring medical services or prescriptions using someone else’s name. As a result, the impostor’s medical information would be added to the medical records of the victim, exposing them to financial losses due to insurance costs and medical bills.

Social Security ID Theft

A thief uses your Social Security Number, the most important number any American possesses, to steal money and property or access services and opportunities solely available to social security holders. In fact, they may even use your SSN to forge fake documents such as passports.

Financial ID Theft

As the name implies, this occurs when a victim’s bank account or credit card details are stolen and used for purchasing goods and services. The offender could even use that information to access new financial services or credit cards, resulting in considerable loss of money and ruining your financial security.

Driver’s License ID Theft

One of the most common forms of identity theft that consists of a perpetrator stealing your driver’s license, which provides details like your name, address, date of birth, and Social Security Number. This information is used to purchase items, apply for loans, open new bank accounts, etc. under your name.

Child ID Theft

Though this type of identity theft may not be as common as the others, it’s extremely lucrative for thieves. The Social Security Numbers of children are valuable as there’s usually no information linked to them, so they can easily be used by criminals to commit fraud.

Identity Theft Examples

Now that you know what is identity theft, the signs that indicate that you may have be a victim, and which are the most common types of identity theft, let’s take a closer look at a few examples:

  • Someone uses your Social Security Number to rent cars and commit crimes.
  • Someone uses your personal information to open new accounts in your name.
  • Someone uses your credit card or debit card to make unauthorized purchases.
  • Someone uses your child’s identity to take out loans and other lines of credit.
  • Someone uses your health insurance details for medical care.

Identity Theft Data Breaches

The following graph from Statista shows the number of data breaches worldwide related to identity theft from 2013 H1 to 2018 H1:

identity theft breaches

Identity Theft Laws

We reached out to Glenn Kurtzrock, a criminal defense attorney on Long Island, NY, and asked him a few questions regarding identity theft laws:

Q.1: Is identity theft a misdemeanor or a felony?

GK:In New York State, there are four different degrees of Identity Theft.  There is Identity Theft in the First Degree, through Third Degree, and also Aggravated Identity Theft. 

To summarize them from least serious to most serious, ID Theft in the Third Degree is a class A misdemeanor, and it involves knowingly and with intent to defraud, assuming the identity of another person and thereby benefitting from doing that, or causing harm to the other person.

ID Theft in the Second Degree is a class E felony, and it involves committing the crime of ID Theft in the Third Degree and either benefitting in an amount over $500, or harming the other person in excess of $500, or committing or attempting to commit another felony, or having a prior conviction for ID Theft in the Third Degree or a related crime in the previous five years.

ID Theft in the Third Degree is a class D felony, and it involves committing the crime of ID Theft in the Third Degree and either benefitting in an amount over $2,000, or harming the other person in excess of $2,000, or committing or attempting to commit a class D or higher felony, or having a prior conviction for ID Theft in the Second Degree or a related crime in the previous five years.

Aggravated ID Theft is also a class D felony, and it involves knowingly and with intent to defraud, assuming the identity of a member of the armed forces who is deployed outside of the US, and either benefitting in an amount over $500, or harming the other person in excess of $500.

It’s important to note that there are usually several other crimes that are charged in connection with Identity Theft charges, which overlap with these charges.  I often see additional charges including but not limited to Criminal Impersonation, Forgery, Criminal Possession of a Forged Instrument, and more.”

Q.2: How long is jail time for Identity Theft?

GK: It will vary depending on how the offense is charged:

  1. A misdemeanor – up to 1 year in jail
  2. E felony – up to 1 1/3 to 4 years in prison
  3. D felony – up to 2 1/3 to 7 years in prison

Q.3: Should I file a police report for identity theft?

GK: That’s up to you, but a lot of these cases can involve ancillary consequences such as issues with your credit report or identification, so it’s helpful to be able to show that you reported this to the police.

Q.4: What is the bail amount for identity theft?

GK:That varies widely depending on many factors, including the level of the offense, the prior criminal history of the defendant (or lack thereof), the nature of the crime, the harm to the victim, the strength of the prosecution’s case, and the likelihood that the defendant will attempt to flee the jurisdiction. Sometimes it’s possible to negotiate with the prosecutor prior to the arraignment to come to an agreement as to bail. 

As an example, I recently had a client who was arrested and charged with several counts of Identity Theft and related crimes.  The prosecutor was going to ask for $20,000 bail to be set.  Prior to the arraignment, I was able to obtain some documentation demonstrating that this was actually my client’s real identity. 

The prosecutor agreed to consent to my client being released without bail. I then was able to obtain and provide several additional documents proving that my client was actually innocent of the charges, the prosecutor agreed to dismiss all charges.”

How to Protect Your Identity?

While it can prove difficult to completely prevent becoming a victim of identity theft, there are certain steps that you can take to minimize the risk of your identity getting stolen. Here’s how you can do just that:

1. Be Wary of Public WiFi Networks

If you connect to free WiFi without protection, hackers on the network can sniff your traffic and steal personal information. By using a VPN, you can change your real IP address to surf anonymously which allows you to use public WiFi without worrying about someone monitoring your every move.

2. Enable Two-Factor Authentication

Two-factor authentication, also called 2FA, will add an extra layer of security to your online and financial accounts. Therefore, make sure to set it up wherever possible. You’ll be asked to confirm your identity every time you attempt to log in by scanning a QR code or entering a special code.

3. Use a Password Manager

The use of strong, unique passwords is recommended by many security experts, but remembering multiple credentials can indeed be an inconvenience. A reliable password manager will not only generate strong passwords for you, but also help keep them secure under one master password.

4. Lock Down Your Social Media

Identity thieves might find out a lot about you by looking at the information you post on social media platforms like Instagram, Facebook, and Twitter. Make sure you don’t share personally identifiable information on them. Also, become familiar of and use the various privacy settings available to you.

5. Excise Caution When Giving Out Personal Info

One way criminals can get their hands on your information is through phishing. They pose as a legitimate institution to lure individuals into revealing their passwords, credit card details, and other information. Remember, if you’re being contacted by your institution, they’ll already have your info.

6. Never Click on Suspicious Links

If you receive a link that seems dubious, trust your gut and delete it right away. Better to be safe than sorry, right? Similarly, if you get a phone call from someone claiming to be your credit card company, hang up and call them back on their official number to confirm if the caller was real.

7. Set Up Account Alerts

Scammers will usually first test with a small purchase on your credit card to check whether or not it works. Therefore, you should pay close attention to any and all charges on your accounts. Consider setting up real-time app or email alerts as you get notified every time there has been a transaction.

8. Only Visit “HTTPS” Websites

When you’re banking or shopping online, only visit sites that use SSL/TLS encryption to secure your personal information from prying eyes. By using a privacy extension like HTTPS Everywhere, you can enforce HTTPS on all pages.

Identity Theft FAQs

The following are answers to some of the most frequently asked questions about identity theft:

How Common Is Identity Theft?

According to a recent survey by The Harris Poll, around 60 million Americans were impacted by identity theft in 2018. In comparison, the number of identity theft victims in the US was nearly 16.7 million in 2017. Keeping these statistics in mind, it can be safely said that identity theft is a relatively common cybercrime.

How Does Identity Theft Work?

Though it’s one of the fastest growing cyber crimes in the U.S., many people don’t know the first thing when it comes to identity theft. Not anymore though, as we’re going to take a closer look at how it works for your better understanding:

Step #1: Obtaining Personal Data

The first and most obvious step of identity theft is when your personal data gets stolen by thieves. They can get it in many different ways, such as malware, phishing, man-in-the-middle, physical theft, and data breaches.

However, the fact that your credit card details or Social Security number fell into the wrong hands doesn’t constitute identity theft. Your data is merely stolen; the thieves haven’t yet used it to their advantage.

Step #2: Using the Stolen Identity

This is when the actual identity theft takes place – the bad guys start using the information they managed to collect on you. More often than not, they’re also going to test the authenticity of the stolen data.

If it proves accurate, they will either try to steal more information from you or make immediate use of the data available. They can use your personal data in various ways, such as to take out loans or commit insurance fraud.

Step #3: Discovery & Correction

Some kinds of identity theft, like the misuse of debit or credit cards for example, can be identified right away. However, there are many forms of fraud that remain undiscovered for months or even years, such as child identity theft.

Identity thieves can also use someone’s insurance information to acquire health care services. The victims, of course, don’t have a clue about this unless they seek medical attention and are denied owing to non-payment of past due balances. If you’re a victim, these delays are bad news because the longer it takes to spot identity theft, the greater the damage caused by the perpetrators.

As far as identity theft correction is concerned, the process can be a hassle and rather lengthy. It could potentially take thousands of hours to resolve the issues caused by identity theft, depending on how long your stolen identity went undetected.

How to Report Identity Theft to Police?

If you’re a victim of identity theft, it’s recommended that you file an FTC Identity Theft Report first and include it when filing a police report. Follow these steps when reporting identity theft to the police.

  1. Visit your local police department with these key pieces of information: a copy of your Identity Theft Report with the Federal Trade Commission (FTC), a copy of your driver license or other government-issued photo identification card (ID), proof of your home address like a utilities bill or mortgage statement, and any evidence of your stolen identity, such as collection notices or credit card statements.
  2. Tell the police that your identity has been stolen by a thief and you want to file a report. Make sure they attach your FTC complaint to the police report.
  3. Obtain a copy of the report as you will need to provide copies to credit bureaus and creditors as you take the necessary steps for identity recovery.

How Important Is Identity Theft Protection?

Identity theft protection companies claim to guard your personal information in exchange for a specific fee. They generally provide credit monitoring as well as other services to alert you in the event of a problem.

However, most of them don’t prevent thieves from misusing or stealing your data. We’d recommend opting for an identity theft protection service only if they offer proactive credit freezes to stop the opening of fraudulent accounts.

Wrapping Things Up

If you come to discover that your identity is stolen, you must report the crime immediately to the relevant agencies. It will allow you to clear up any fraud done using your name and personally identifiable information before it affects you and your finances negatively.

If have anything you’d like to add about identity fraud and identity theft, please use the comments section below.

Haris Shahid has a genuine passion in covering the latest happenings in the cyber security, privacy, and digital landscape. He likes getting out and about, but mostly ends up spending too much of his time behind a computer keyboard. He tweets at @harisshahid01

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