Did you know there were more than 1 million identity theft reports in 2021 alone? So it’s important to be proactive, especially because you have a financial future you want to protect.
Unfortunately, ID theft can happen in many forms and have devastating effects on victims.
That’s why we've done in-depth research on ID theft, searching official government sources and other authoritative sites. We've also looked into the latest ID theft news because tactics evolve along with technology, so it pays to be updated.
If you know what you’re up against, you’ll know what security measures you should set up to protect your information and identity.
Stick with us until the end and discover the best defense you have against ID theft. Don’t miss out on crucial security tips, so you won’t keep yourself vulnerable to ID theft.
In this article
What are the types of identity theft you should know?
Identity theft comes in many forms, and it helps to know each of them, so you can better protect yourself.
1. Financial identity theft
What is financial identity theft? In this type of ID theft, someone uses your information, like Social Security Number (SSN), card details, home address, phone number, email, or online credentials, to access your bank accounts and credit cards.
It’s the number one type of ID theft because most scammers just want your money and nothing else.
Here’s a list of what scammers can do once they get your data:
- Apply for new credit lines
- Get new debit or credit cards
- Open new checking or savings accounts
As a result, you’ll suffer financial loss, especially if your case requires expert advice where you need to contact lawyers. Banks and credit unions may also ask you to pay for fraudulent items and loans you didn’t receive.
Unfortunately, your credit score may also be affected due to the loans and cards that scammers opened under your name.
2. Medical identity theft
It occurs when someone uses your information, such as SSN, Medicare number, or insurance account number, to:
- See a doctor
- Receive medical care
- Buy medical devices
- Get prescription drugs
- File medical insurance claim
So what happens when you become a victim of medical ID theft?
You might get a bill from your doctor for services you didn’t receive. Some insurance companies may deny coverage due to a condition you don’t have.
So it can negatively affect your medical record and the insurance benefits you can use. This type of ID theft can also hurt your credit score.
3. Criminal identity theft
Criminal identity theft happens when an arrested person provides your information to law enforcement.
For example, the perpetrator may give your name, SSN, or driver’s license to authorities. In some instances, the thief may also have a copy of your photo ID, either real or fake.
As a result, you have a criminal record without being involved in the incident.
You might think it will never happen, but Marcus Calvillo lost his job, and his marriage fell apart when Neave-Ceniceros, the impostor, stole his identity for criminal purposes.
4. Synthetic identity theft
The Federal Reserve Survey reported that synthetic identity fraud is the fastest-growing financial crime.
Here’s how it happens:
- Scammers steal information from several individuals to create a fake identity.
- They gather SSNs, names, addresses, birthdates, passport numbers, and other details.
- Scammers may also use different identities simultaneously to open many financial accounts.
- They may use the accounts responsibly for a few months to build up credit history.
Due to the lack of identifiable victims, it often goes unnoticed, unlike true name identity theft. Since fraudsters mix people’s information, it’s difficult for financial institutions to tell that this crime has occurred.
You’ll only know that you’ve become a victim of synthetic ID theft when you see unusual transactions in your credit reports and false information in your Social Security statement. It means the scammers use your SSN to obtain loans and open new accounts.
5. Child identity theft
Why do criminals target children’s information?
Their SSN and credit history offer a clean slate for scammers to exploit. It allows an identity thief to apply for loans, get a driver’s license, buy properties, and apply for jobs.
Since most parents don’t check their children’s credit reports, kids will only know that someone used their identity when they’re old enough to apply for financial aid or a job.
6. Driver's license identity theft
Driver’s license ID theft happens when a thief steals your license and changes the photo or information to create a new identity.
Sometimes, they’ll also sell it on the black market. So when the person who bought your license commits a driving violation, the charge will appear on your record.
As a result, the authorities will impose penalties on you or suspend your license, depending on the severity of the traffic violation.
7. Social Security Number identity theft
You need SSN for different transactions, such as:
- Opening a bank account
- Receiving government benefits
- Buying properties
As you might notice, SSN is an essential piece of information that criminals want to access.
They can get your SSN through unsecured websites, phishing attempts through phone calls and emails, and mail theft. Once they know your SSN, they will apply for loans and obtain benefits under your name.
Due to their fraudulent acts, you’ll receive collection notices, statements of accounts, and notifications regarding debts you don’t owe. Government agencies may also deny your benefits because according to their system, you already claimed such.
8. Tax identity theft
The previous type of ID theft is crucial in tax-related identity theft. When scammers know your SSN, they can use it to file a fraudulent return and claim a refund under your name.
Even the Internal Revenue Service (IRS) states that you may not know you’re a victim until the IRS informs you of possible issues regarding your tax refund.
So how does this affect you?
You might experience difficulties in claiming your refund. It might take several phone calls and even assistance from experts to get your money.
9. Senior identity theft and scams
A study by True Link Financial revealed that criminals steal more than $36 billion from older Americans each year. Like children, the elderly don’t usually check their credit reports, which makes them the target of identity thieves.
Most seniors also have multiple savings accounts and pension plans. Also, they’re more trusting than the younger generations, so criminals target the elderly.
Unfortunately, seniors who become victims of ID theft can lose their life savings in seconds. It may also cause immense stress and affect even their physical health, which is already failing.
10. Mail identity theft
Although most companies inform you through emails, other financial institutions and government agencies still send physical mail.
So how does mail ID theft occur?
Scammers may illegally open your mailbox and remove mail that contains sensitive information. These documents may include bank and credit card statements. Once they have your details, they’ll contact your banks or credit unions to change your address to theirs.
As a result, you won’t receive copies of your financial statements and become unaware of fraudulent purchases.
11. Employment identity theft
The Federal Trade Commission (FTC) gathered over 100,000 reports of employment-related fraud in 2021, including ID theft.
This ID theft occurs when someone uses your SSN and other personal details to apply for a job.
For example, an applicant might provide your SSN to a company to get hired, although the scammer lacks the qualifications.
So how will this affect you?
When an impostor uses your SSN to apply for a job, the company will record its taxes under your name. So on top of the tax that you pay for your $70,000 annual salary, you’ll also be responsible for the criminal’s income tax.
12. “Friendly” or familial identity theft
Identity theft can happen in several ways, but it’s devastating when the culprit is someone you know, such as family members, neighbors, and co-workers.
Worse, you won’t quickly recognize the signs of familial identity theft because it’s unusual to suspect that your friends or family members will steal your personal information. But since they know some details about you, it’s easier for them to impersonate you.
They may apply for loans or purchase properties under your name, leaving you with a mountain of debt. It’s also usual to feel extreme stress due to the strained relationship.
13. Unemployment and government benefits identity theft
Sareena Brown-Thomas, an unemployment ID theft victim, shared to The Washington Post her unfortunate experience.
She received mail, allegedly from the D.C. government, with her name and the last four digits of her SSN. The letter stated that she had been awarded unemployment benefits. She was left confused because she didn’t apply for the said benefits.
So that’s how government benefits ID theft work: scammers will use your SSN, address, and employment details to claim unemployment benefits.
As a result, you’ll need to prove eligibility for the said benefits because criminals have already taken them.
14. Account takeovers (Social media, email, etc.)
Most people communicate through the internet using social media websites and email platforms.
That’s why criminals create fake accounts using their victims’ photos and information. They’ll reach out to your family and friends to ask for money, claiming you’re in an emergency.
They may damage your reputation because people who are unaware of the situation might believe that you scammed them.
15. Biometric ID theft
Scammers may also commit identity fraud by hacking your fingerprint. They may carry out data breaches to collect names, addresses, phone numbers, and fingerprints. Once they have your fingerprint data, they can create a copy to access your accounts.
As a result, they can make fraudulent purchases, hack your emails, steal health insurance benefits, and extort money.
16. Identity cloning
Identity clones will use almost all your personal details to live and work as you. For example, they may even pay your bills and build a family using your identity.
They are usually convicted criminals who need other identities to apply for jobs and open financial accounts.
Unfortunately, victims of identity cloning experience difficulties in resuming a normal life. Most of the time, they need to hire lawyers and security experts to recover.
So among the types we mentioned, what is the most common form of ID theft?
It’s financial identity theft. Americans lose thousands of dollars due to financial ID theft.
What are the first signs of identity theft?
ID theft may be difficult to recognize, but here are some red flags you should know.
- You receive bills for accounts you didn’t open and services you didn’t get.
- Credit unions and government agencies may deny your application for unknown reasons.
- Collection agencies call you and claim that you have unpaid debts. But in reality, those are someone else’s debts.
- Your bills and bank statements haven’t arrived in a few months. Perhaps scammers have changed your official address.
- You notice inaccuracies in your credit reports and bank statements.
- You have a criminal record without violating any law.
What are the common causes of identity theft?
Criminals have various reasons why they commit financial identity fraud and other types of ID theft, but here are the usual ones.
- They’re seeking financial benefits, so they apply for loans, open credit and debit cards, make fraudulent purchases, and steal government benefits.
- They use other identities to hide from law enforcement agencies because they’re convicted criminals or illegal immigrants.
- They want to exact revenge because they know the inconvenience of repairing the damages brought by ID theft.
How to protect yourself against ID theft?
There may have been several forms of identity theft, but you can still protect yourself against such fraudulent activities.
- Never give your information to strangers who claim to be employees of private or public institutions.
- Monitor your financial statements for suspicious transactions. Most identity thieves purchase inexpensive items before maxing out their victims’ credit cards.
- Review your annual Social Security statement for inaccurate information.
- Monitor your credit report to know if scammers are opening new credit lines using your name. It’s also one way to confirm identity theft.
- Enable two-factor authentication to get alerts in case of unauthorized access to your online accounts.
- Don’t visit malicious links and unsecure websites because hackers use them to gather sensitive information.
- Here’s your best defense against ID theft: ensure that only authorized agencies know about your SSN. Don’t carry your card with you or other documents which show your SSN.
Who to call if you have been a victim of ID theft?
Report your experience to the FTC at IdentityTheft.gov or call the agency at 1-877-438-4338. The FTC will provide a recovery plan and assist you through each recovery step.
You can also contact the police, so they can arrest the ID thieves and help other victims.
Guard your personal information against identity thieves
Scammers carry out several forms of ID theft, such as financial, medical, criminal, synthetic, and employment. But it doesn’t mean that they’re successful all the time. You can still prevent these scams.
Make sure to guard your SSN, review your financial records, and set up privacy defenses for your online accounts.