There are common types of fraud that millions of people are at risk. Some of these are debit or credit card skimming, stealing of email, and online hacking. When at the stage of potential theft, you must act fast and clear your name and credit account.
There could be repeated damage to your credit file once you let the fraud sit on your account for so long. And so, we are here to tell you what identity theft is, how it happens, and how you can prevent this.
How does identity theft happen?
For you to prevent identity theft, you need to determine first how it happens. Upon understanding how criminals do the robbery, you will have the chance to inject to yourself the protection that you need in such scenarios.
The fast development of technology increases the chance of the criminals to do a crime which has also evolved. Below are some of the causes of identity theft:
Not Secured Online Data
We are now experiencing lots of conveniences as we are currently in the digital era. Making purchases has been a lot easier with just a click or tap on your device. And to do that, we are no longer required to leave our house.
Though offline identity theft decreases due to paperless transactions, there are new ways that allow identity theft. Here are the examples:
- Phishing- criminals try to disguise themselves as a legitimate entity like an IT administrator, auction site, or bank that requests to get information through a fake website or email. Like when you are doing the HSBC login on the HSBC website to look for a routing number.
- Unsafe connections- for a user of an internet that doesn’t have antivirus software or firewall, you could be a prey to the hackers who will steal your personal information.
- Insecure websites- online shopping may lead to a not reputed business that is not a secured domain.
- Password security- you are vulnerable when you have easy-to-guess passwords to multiple websites. Storing passwords in one place is not advisable.
- Doxing- this is when a cybercriminal tries to obtain the personal information of the victim. Criminals will ask the victim to do their desired actions as they threaten the victim to publish his/her personal information online.
Lost or Stolen Files
Studies show that stolen or lost wallets have been a top reason why identity theft happens. Because wallets have most of the sensitive and personal details that theft can get, such as Id’s, credit cards, licenses, and even Social Security numbers.
These data are being used by the criminals to apply for loans, open new lines, charge purchases, and obtain housing. A wallet if just one physical resource of identity theft. You should also consider the following:
- Mail- if your mailbox is not locked, this could also be vulnerable to be a source of your personal information.
- Trash- thieves are desperate dumpsters. They can get your files from the trash which you did not shred sensitive documents.
- Digital devices- Neglecting software updates and not securing your device through passcodes will take you on the near possibility of being a victim of identity theft.
Company-Wide Data Breaches
Data breaches are at the top of the leading causes of identity theft. This could quickly affect a massive number of people. This scenario may happen if a piece of secure information is leaked either by accident or maliciously to an unsafe place. The data breach may release almost all of the critical information of a victim, even the details of family members.
What to do not to be a victim?
Regular review of your statements and credit report may lead to early detection to lessen your stress in repairing any damage. Also, signing up for alerts with your bank creditors can help. To begin monitoring suspected fraudulent activities, get a free credit report from Bankrate.
To take action sooner rather than later is the best if you observed signs of identity theft. Here are the 10 best practices if you feel to be a victim of identity fraud:
1. Send notice to the affected banks or creditors
The first and foremost thing to do is informing your bank or creditor as soon as you can. Credit cards don’t have liabilities and have no protection for identity theft victims; they can still help you.
The Fair Credit Billing Act protects cardholders who have been a victim of card fraud. This law specifies that for the unauthorized charges, the maximum liability is only $50.
The fraudulent transactions can be avoided if you act fast to report stolen or lost ATM or debit cards. Or else, you have two business days to report unauthorized transfers or charges with a maximum of $50 after you discover the loss.
If you report the fraud after 60 days, this could damage you with unlimited liabilities. After the emailed statement reflected the scam, you can have a liability limit of up to $500.
2. Ask assistance to your telephone and utility company
Explain to the service provider if you discovered an account opened using your identity. You asked them to close the account. The utility company and telephone carriers should be notified if there’s an identity theft happening under your name and using your utility bill as proof of residence.
3. Set a fraud alert on your credit report
Protecting your credit from damages should be on the top of your priority as a cardholder. Fraud can have long-lasting adverse effects on your credit score.
This is the reason why there are fraud alerts. These alerts are for free to use and can last for one year. You can renew and get another one if you are decided to use it longer.
You should receive notice through phone calls from the businesses before opening an account under your name. In this situation, the fraudsters won’t have a chance to open an account named to you.
4. Review your credit reports
After setting up a fraud alert, each of the three agencies will automatically send you an access to one free credit report. You can check your credit reports at least once every other year to make sure that there is no continued fraudulent activity on your account.
5. Freeze your credit
A credit freeze would be a big help to avoid releasing your credit card to new creditors. This action is free, and all you need to do is to contact the three credit bureaus and request for it.
According to McClary, the strongest defense to fight identity theft is placing a credit freeze and a fraud alert. The bureaus will issue a password or a PIN for you to lift the freeze. However, losing track of your PIN may cause a problem or a delay to unfreeze your credit. So you need to make sure to keep the details of your PIN while the freeze is still active.
You can either do the freeze temporarily or permanently. As there is no time limit to a freeze, and the decision is up to you when you want to lift it.
6. Replace your stolen identification
If you have lost valuable identification cards, you should report it to their proper designated office. You can ask for assistance on how to process replacing your stolen identification.
7. Report the identity theft to the FTC
Identity theft can be reported to the FTC. You can do this by completing an online form at identitytheft.gov or call their hotline number- 1-877-438-4338.
Aside from getting a recovery plan, you will also receive an identity theft report. The report serves as a proof that your identity was stolen.
Make sure to have a printed copy of the report and recovery plan. To do this, create an account through the FTC’s website.
8. Remove fraudulent info from your credit report
After looking at your credit report, make sure to remove or block the information from your report. Continue to be vigilant on your credit report so you may quickly catch additional fraudulent accounts.
9. Change account passwords that are affected
Any affected passwords on your accounts should be changed. And if any of your accounts do not have a password, it is now time to set up one.
Once you become a victim of fraud, or if you want to avoid this from happening, do the best practices on setting up passwords. Either use an alphanumeric combination, not to duplicate passwords across accounts.
Also, avoid using obviously or identifying information such as date of birth. We suggest you use a secure password manager for you to have a track of each new password.
10. Go to the police
Although you have reported your case to the FTC, it is still best to file a report on your local police department. A police report will secure and protect you from additional damages resulting from theft.
Lack of enough information could be the most potent reason to be a victim of identity theft. Take time to learn how you can prevent this incident so you will not have any regrets.
Have you been a victim of fraudsters? How did you cope with the situation? Share with us your experience that could help others