Imagine standing in line to pay at the grocery store. The groceries have been scanned. The bagger is placing the last of the bags into your cart. Finally, you swipe your card. To your horror, you see those dreaded words displayed across the POS device: DECLINED. Your cheeks blush, and you laugh nervously, saying, “That’s strange.” You avoid eye-contact with the cashier.
Meanwhile, you’re trying to remember if you made a large purchase that you forgot about. You pull out another card and breathe a sigh of relief. Approved. You have your groceries, but unfortunately, your identity is no longer all your own. You’ve become a victim of identity theft.
Fearful of such a scenario, I pay a small fee to protect my identity each month. Over the course of the years, I’ve paid this fee; I could have bought a roundtrip ticket to Europe instead. Even so, I continue to pay the fee without batting an eye. Identity theft protection isn’t like car insurance, which is a required coverage if you’re driving a car. In contrast, identity theft insurance is discretionary. It’s more like flood insurance if you aren’t living in a flood plain.
Even if you’ve never encountered trouble, identity theft remains a threat. Let’s take a look at the ways thieves try to access your information and what you can do to keep them at bay.
What is identity theft?
Like a robbery, identity theft is when someone takes your personal information without your permission. Then, that person uses it to gain access to your assets. Similar to a heist, the scale of the crime varies. Thieves might commit small-scale crimes, such as using your debit or credit cards to make retail purchases. Or, thieves might commit large crimes in your name. For example, buying a property or filing fake tax returns to receive a refund check. Whether the crime is minor or substantial, it is a crime no less, and the thief deserves prosecution.
Meanwhile, the threat remains. Studies show that 2017 saw over 16 million victims of identity theft. That amounted to nearly $17 billion in stolen funds.
Now, I am not the only person who recognizes the importance of protecting my identity. Identity theft is such an issue that even the government gets involved. In fact, there’s a website devoted to helping you attempt to recover your identity and money in the case of a breach. This website, however, should not be confused with an identity protection service. Specifically, it does not prevent identity theft. Therefore, you need to know how a thief can gain access to your information. If you know a thief’s MO, you’ll understand how to protect yourself.
How Identity Theft Occurs
Now we know what identity theft is, so that we can identify the methods used. The methods of theft vary in sophistication and scale.
A data breach occurs when a company’s website is compromised. Then, the breach leaks customer information. Customer information can include name, address, birth date, and account number. Additionally, the leaked information might consist of the debit card expiration date and CVV codes. This information, in a thief’s hands, means the person can spend freely on someone else’s account.
Stolen Pin Number
Experts have discovered a tool identity thieves use for their criminal purposes. Skimming devices allow them to gain access to card and PINs from debit cards. A skimming device can work in one of two ways. One way is when thieves have a separate skimmer that they use when they have temporary access to a card. Alternately, the thief uses a device inserted into a payment portal. Then, the device reads the debit card number. Sometimes there is a hidden camera over the keypad, to record the PIN that the customer punches in.
Long before debit cards and online payment options, something else left you vulnerable. Your mailbox. Mail fraud has existed as long as mailboxes have existed. Moreover, tampering with someone else’s mail is considered a federal offense. Thieves have mastered methods of mail fraud.
These methods include re-routing mail and stealing your mail from your mailbox. Thieves can re-route your mail by changing your address with the post office. When they steal your mail, however, it may be less noticeable. Thieves just discretely steal a couple of pieces over a longer period of time.
To become a victim of tax theft, the thief must have access to your social security number. With this, a thief can file a tax return and potentially receive a fraudulent refund. While it may not be immediately evident that this has occurred, the IRS says that there are a few warning signs.
First, multiple tax returns filed using your social security number indicates a problem. Second, if you owe additional tax for a year you did not file a tax return, then you need to investigate further. Third, IRS records showing employment with a company that you’ve never worked for. That would be a pretty big red flag.
Many of us have experienced a virus on our computer due to clicking a bad link in an email. While most people agree that it is inconvenient, the worst-case scenario is yet to come. Identity thieves can use malware to gain control of your email account.
Once a thief has gained access to your email account, the possibilities are endless. Thieves can use your email address to send out spam to others and to steal your identity. Now that they’ve taken your identity, they can then access your money.
How can you protect yourself from identity theft?
Now, it’s crucial to stay on top of all aspects of your identity. This will help you play your role in preventing identity theft. Here are a few suggestions for remaining guarded:
- First, review your bank accounts daily. While credit scores might not change daily, your bank accounts can. Make a habit of logging in daily to be certain that your transactions are your own.
- Next, check your credit score regularly. Many credit card companies allow you to see your credit score as part of a business relationship. Otherwise, you can open an account with a company whose purpose is to provide credit reports. Regardless of whether you use credit, you will want to make sure that your credit score is accurate. It would be terrible if you never used credit cards, only to find out that someone else was using them in your name!
- Also, review your credit card transactions weekly. Gone are the days of waiting for your credit card statement to arrive in the mail. Now you can log in online to see what’s happening with your credit cards. You should check your active and dormant credit card accounts frequently, to make sure they haven’t been compromised.
- Finally, make sure no new accounts have been opened in your name. While it’s important to make sure your credit score is accurate, don’t forget to make sure to check on open accounts. If you see any open accounts that you don’t recognize, then call the company to find out what they are for. If you did not initiate the account opening, take steps to close it immediately, and report it as fraudulent.
In short, being in the know is obviously important. Nevertheless, there are still many people who do not check the accuracy of their accounts. People who don’t frequently review account information are easy targets for thieves. So, these individuals would be the perfect candidates for outsourcing to a protection provider. An identity theft protection company will alert you of potential threats.
Regarding identity theft protection, there are different levels of protection to choose from. The basic level provides updates on changes to your credit history. Changes include credit scores, open accounts, and payment history. With a robust level, you can have everything that the basic package offers. Additionally, the credit protection company reimburses you for expenses incurred by identity theft. Expenses include stolen funds and legal fees. The cost of protection ranges depending on the level of service.
So, don’t be the person standing in line at the grocery store, blindsided by identity theft. Guard your goods! Deny those thieves access to your life. Remember the ways that thieves will try to take advantage to you, and put measures in place to protect yourself.