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The internet has made our lives convenient, and we can do almost everything with the aid of technology. Unfortunately, it’s not always safe, and you’ve probably heard of identity theft cases rising, particularly during the pandemic.
Thieves can steal and collect different pieces of information to hack your accounts or create fake identities. With so much at stake, falling victim to these schemes can lead to disastrous scenarios—affecting your life's financial, emotional, physical, and social aspects.
We understand this fear, so we looked into the latest identity theft news and stories, along with current law enforcement and government efforts to protect consumers.
We’ve read real-life stories of ID theft victims, where we found the most terrifying thing that can happen to individuals. We’ve also listed down the best expert tips to protect yourself against ID theft, so don’t miss out and compromise your identity.
In this article
What are the negative effects of identity theft?
We can bounce back from one-time scams, but the effects of identity theft can linger and leave devastating impacts. If you’re worried about hackers compromising your data online, it’s time to reassess your existing security measures.
A little knowledge also goes a long way, so let’s begin by learning how identity thieves can affect your life negatively:
1. It can damage your credit score
When someone steals your personal information, they can cause damage to anything that affects your credit score, including the following:
- Your credit history: Your length of credit history is around 15% of your total credit score. When fraudsters open multiple new accounts at once, your credit history suffers.
- Your payment history: This makes up 35% of your credit score, the most heavily weighted factor. If you miss payments for more than 30 days, your credit score can drop by 100 points. As a scam victim, debt incurred without your knowledge will pull your payment history percentage down.
- Credit utilization: This pertains to your overall debt and credit utilization or your use of credit cards. Taking up over 30% of your credit score, credit cards opened under your name and later maxed out.
- Your eligibility for loans: Because of your dropping credit scores, qualifying for loans and mortgages will be difficult.
2. Criminals can open new accounts and credit lines
Identity theft is closely linked to financial fraud, as most criminals use stolen information for money. With your Social Security number, credit card information, and other identifying details, they can:
- Purchase luxury goods and max out your credit card, leaving you with debts to pay
- Create duplicate cards using your credit card numbers, which they can continuously use
- Withdraw money from your bank accounts until they’re empty
- Apply for loans like mortgages, personal loans, and other lines of credit
- Create a synthetic identity using your Social Security number
Thankfully, most financial institutions don’t force you to pay for anything or any damage caused by identity theft. You only need to report the incident as quickly as possible to minimize further damage risks.
3. Hackers can use your name for crimes
Criminals can also use your identity to commit numerous crimes. The catch is that you will be the one to face legal action, and it can tarnish your record.
This is because criminal identity theft cases can be challenging to track, and your identity serves as a lead for law enforcement.
Crimes extend outside of the online world. Criminals can use stolen identities for lighter crimes like traffic violations. However, they can also use your name for more heinous crimes, like human trafficking.
4. Thieves can sell your information on the Dark Web
Numerous identity theft articles warn people of the presence of the Dark Web (also called the darknet)—and for good reasons. This hidden part of the internet requires specific tools to access, and it’s a hotspot for criminal activity.
Fraudsters can harvest information from data breaches and sell them on the Dark Web. It’s a steadily growing market, and transactions on this part of the internet racked up to $1.7 billion in 2020.
Hackers can buy your data and use it for more ID theft-related crimes. Unfortunately, this is one of the identity theft problems that last a long time—your information may stay on the Dark Web indefinitely.
5. ID thieves can inflict psychological harm and emotional distress
Identity theft can be a traumatic experience. Fraudsters only care about stealing your personal information for their gain. They have no regard for your well-being, and you’re left to deal with the lasting impacts of their scams—damage to your financial health, leading to fear and stress.
According to a recent Identity Theft Resource Center (ITRC) study, 77% of participants report a spike in stress levels following identity theft. 55% also report experiencing an extreme lapse in energy or fatigue.
6. Hackers can steal your children’s identities
This can perhaps be one of the most terrifying consequences of identity theft. Criminals can steal your children’s identities, as they’re less likely to monitor credit scores, making them the perfect identity theft victims.
According to a report by the Identity Theft Resource Center (ITRC), 1.3 million victims of child identity fraud cases happen every year. With clean Social security numbers, identity thieves can plan for the long term and apply for loans and credit cards when your child comes of age.
Some victims, however, report that criminals can also pose as “family members authorized to use a child’s identity” to open credit lines. This is exactly what happened to Cliff, a father of two children from Ohio.
“My daughter just turned 18 in 2016, ready to take on the world. She asked for a physical copy of her Social Security card, eager to begin working to prepare for college. Unfortunately, she came home crying to explain that she’s somehow incurred $15,000 in debt,” Cliff shared.
“I couldn’t believe it. We later discovered that someone had stolen her SSN years prior, and they opened several credit cards under her name. We reported the incident, requested to freeze the credit score and canceled all the cards. We didn’t have to pay for anything, given her age. They knew it was a case of ID fraud.”
Most lenders don’t verify ages, which is why Cliff’s daughter became an easy target.
Can you ever fully recover from identity theft?
It takes a while to recover from identity theft. But this also varies depending on the type of identity fraud that occurs.
Credit card fraud victims, for example, may recover quickly by reporting the incident, requesting cancellation, and getting a new card.
However, recovery time can take longer for more serious identity theft cases. A stolen Social Security number can be difficult to deal with, especially if a criminal opens a credit account under your name.
You need to dispute and prove it wasn’t you, warranting months of back and forth with creditors and credit reporting agencies.
Incurred tax debt, synthetic identities, and other major violations can take years to undo—especially if the crime damaged your credit score.
How to recover from identity theft more quickly
Identity theft recovery time depends on the level of fraud severity, but there are ways to expedite the process. It can also depend on how quickly you can recognize and act on a scam.
Here are some expert tips we’ve gathered for you:
1. Recognize the signs
Finding out how the criminal stole your information can be difficult. Your best option is to learn how to recognize the signs of fraud. Here are sure signs you’re dealing with fraud:
- Unauthorized purchases notifications
- Credit denial
- Unexpected credit card deliveries
- Credit report errors or suspicious information
- Unwarranted loan or tax bills
- A failed background check
When you encounter these signs, you may want to request a fraud alert.
2. Ask for a fraud alert
The first crucial step after recognizing fraud should be to reach out to the major credit bureaus. You need to make a fraud alert, preventing criminals from opening credit lines, applying for loans, and other activities using your name.
Here are the different types of fraud alerts you can ask for:
- Initial fraud alert, which lasts 90 days. This is best for when you suspect that someone stole your identity.
- Extended fraud alert, which lasts seven years. This is best for when you’re certain that someone stole your identity.
- Active duty alert, which lasts up to a year and is best for deployed military members
3. Request an official identity theft report
Before filing a police report, it’s essential to request an official identity theft report at IdentityTheft.gov. It offers resources and step-by-step advice on handling recovery, along with official documents and letters you can use to liaise with service providers and credit bureaus.
4. Exercise due diligence
According to Peter Strahan, founder and CEO of IT and cybersecurity company Lantech, the best way to prevent identity fraud happening to you is due diligence.
“Keep your passport and other IDs close by, shred bank documents, be careful where you dispose of mail that has your address on it, try not to hand your email out to everyone and be considerate of what you sign up to with your email such as public WiFi,” he added.
It’s also beneficial to invest in identity theft protection services if you can.
Moving forward: Protecting your identity
The negative effects of identity theft can manifest emotionally, mentally, and even physically. Whether you’re a recovering victim or simply want to find ways to protect your online information better, here are some sure ways to do so:
- Keep your Social Security number safe at all times. Don’t hand it over to anyone, and ask them what it’s for. If they can’t give you a straight answer, do not dictate your number. Any SSN documents must also be kept safe, including your physical card.
- Avoid clicking on links from suspicious emails and engaging with unknown numbers who call and text. These are likely impersonators trying to extract information from you.
- Monitor your credit at all times. All three major credit bureaus allow you to request your credit report annually at annualcreditreport.com.
So much of our lives now exist online. Living in fear of identity theft criminals can hinder us from enjoying the convenience and accessibility the digital world brings. For us, that’s not living at all.
While the dangers are real, there are ways to protect ourselves online. Understanding the impacts of identity theft is the first step toward understanding how we can better protect ourselves. Learning about it can be terrifying—but also enlightening.
Now that you know, you can come up with better ways to safely keep your personal information online. You can start with the expert tips listed above!