Identity theft is a type of fraud in which someone uses your personal information without your permission to commit theft or other crimes. It occurs in different ways and can have a number of consequences for you.
Credit Card Fraud
Identity thieves can use your personal information to open new credit cards in your name that you didn’t apply for. They can also make charges on your existing cards that you don’t recognize. This is called “synthetic identity fraud” and is a common form of credit card theft.
Other forms of identity fraud include stealing bank accounts, medical bills and utility bills that are not yours. If you notice any of these types of transactions on your bank statements, contact the bank or credit card company immediately and report the incident.
Identify Theft in Children
Often unknowingly, children and seniors can be targeted for identity theft. They may not understand how their situation or bills are handled by others, or they may be unaware that they have provided their information to caregivers and doctors’ offices.
The elderly are a particularly high risk group as they tend to have less trust in technology and are more likely to be reliant on their caregivers for care. Moreover, they are a target for retirement fraud, which can put pensions and savings at risk.
Family Members and Friends
Victims of ID theft can erode their relationships with family and friends as they struggle to cope with the loss of personal privacy. Over 45% of identity theft victims reported that they lost their confidence in family members after becoming a victim.
Government Benefits
Some governmental benefits, such as social security and Medicare, can be denied to individuals who have become victims of ID theft. Some states and counties also require you to provide a government-issued photo ID when applying for certain products or services.
Financial Losses
In the US, identity theft causes more than $50 billion in financial losses each year. This is a significant amount of money, and it’s something that Americans should be aware of.
A major reason why this is happening is because of the increase in data breaches and cybercriminals. These breaches are allowing hackers to gain access to personal information of millions of Americans, and they are becoming increasingly sophisticated.
Synthetic Identity Fraud
Known as one of the most serious forms of identity fraud, synthetic identity fraud involves stealing a person’s Social Security number and then using it to create a new person. Typically, this is done for the purpose of applying for loans and credit cards. Once these are approved, the criminals will then start making payments for years until their credit limit is maxed out and they disappear.
This is why it’s so important to regularly check your credit reports and monitor your accounts for any suspicious activity. You can also place a security freeze on your Equifax credit report to prevent anyone from opening new accounts in your name.