What is ID theft?

Key Takeaway
This Homebody comprehensive guide discusses the importance of preventing identity theft and advises securing your financial and personal data. It explains how identity thieves can obtain your personal information, identity theft warning signs, what to do if you become a victim, and preventative actions, including using strong passwords and being aware of common scam techniques.

Theft is something anyone does not like. Of course, thieves take pleasure in taking people’s property.

Identity theft is a growing problem for every American, regardless of how much time you spend online. 

Truth be told, identity theft reports have grown significantly over the last few years. Indeed, identity theft can affect anybody at any time.

However, some people are more vulnerable to identity theft than others. If you want to keep your family, finances, and future safe, you need to know the warning signs of identity theft, plus key tips on how to prevent it. 

This comprehensive guide by Homebody will help you identify and prevent ID theft.

What is ID Theft?

If you are wondering what ID theft is and want to know, this guide by Homebody is the right thing to read.

ID theft involves the stealing and misusing any personal or financial information you may have. This type of information can include:

  • Your Social Security number
  • Your driver’s license number or other ID number
  • Your bank information, like bank account number, routing number, etc.
  • Your date of birth
  • The answers to account security questions
  • Account passwords
  • And more

ID theft occurs when a criminal takes possession of your personal information and uses it without your consent for some criminal means. 

I know that is a criminal act to do. And the consequences are always not palatable.

For example, a criminal might get access to your bank account password and use it to transfer your funds directly to their bank account. 

Alternatively, an identity thief may use your personal information to sign up for a loan, then disappear at the money and leave you saddled with the debt.

No matter what form ID theft takes, it’s important to know how to protect yourself against it since it can happen anytime.

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How Do Thieves Steal Personal or Financial Information?

If you are wondering why thieves thieves steal personal or financial information, just continue reading.

Identity thieves can possess personal and financial information using various tactics and attacks. 

Here are just a few examples for you to learn from:

  • An identity thief can steal your wallet or your phone and then use the information either to learn more about you or to do other types of criminal ID theft activities.
  • ID thieves can also install viruses on your computer. Your computer may have more personal information than you think, like bank statements, password records, etc.
  • Some ID thieves attack companies and credit agencies, such as Experian, to get the personal information of millions of people at once.
  • ID thieves can snoop on your computer if you use a public Wi-Fi network.

However, all identity thieves take advantage of vulnerabilities in computer systems or personal habits to steal any information they can. 

Even a single data point can be used to learn more about you than you imagine, which can then translate into opportunities for theft of your funds, high charges, and much more.

Here are some of the several types of identity theft you need to know;

  • Financial identity theft: Financial identity theft occurs when an identity thief steals your money or uses your information to purchase or take out loans in your name. For example, if an identity thief knows your Social Security number and other banking info, they may use that to open up a line of credit they can use for their purposes.
  • Criminal identity theft: Criminal identity theft technically incorporates any identity theft, but it specifically refers to ID theft where a criminal uses your information to commit a crime, like fraud.
  • Synthetic identity theft: Synthetic identity theft uses your personal information and combines it with synthetically generated information to create new profiles and accounts. This type of ID theft can be very hard to detect
  • Child identity theft: Child identity theft occurs when a criminal takes the personal information of a child to create accounts, steal money, etc. Unfortunately, children are oftentimes much more vulnerable to identity theft because they don’t know what to look for or how to spot an ID thief.

Warning Signs of Identity Theft

You do not want to lose your money. Experience is the best teacher, but there are a few things you can still learn from.

Identity theft is impossible to protect against with 100% certainty, but there are oftentimes warning signs you can pay attention to. 

If you pay close enough attention, you can oftentimes stop an ID theft attack or prevent an identity thief from getting away with additional damage.

The most common signs of identity theft include:

  • Strange or erroneous charges on your bank statements or credit reports. For instance, if you notice a suspicious charge of $500 from China, the odds are your personal information has been compromised.
  • Bills from lenders or credit unions that you don’t recognize. If a creditor approaches you asking you to pay down a debt you never took out, it’s possible that your identity was stolen sometime in the past.
  • Strange drops in your credit score. If an identity thief continually opens up new lines of credit in your name, that can significantly impact your creditworthiness.
  • Changes to your account settings, passwords, or access. An identity thief can get access to your bank account password, for instance, and then change the password so you can’t access your information.

What to Do After Identity Theft

Losing money to ID theft is a sad experience. 

However, there are things you can still do when you fall victim to this. Don’t give in just easily.

In many cases, quick action can help you mitigate the damage of identity theft and help you regain control of your personal information faster than you think.

File an Identity Theft Report

First and foremost, you should initially file an identity theft report. 

  • For example, you can file a report with the Federal Trade Commission (FTC) online or by calling the phone number.
  • You can file a report with the three major credit reporting agencies.
  • You can and should also report the fraud to your banks, credit unions, and any other related organizations.

By filing a report, you’ll get these organizations the tools they need to start canceling your lines of credit and working with you to determine what erroneous charges or loans are likely the result of identity theft. 

Furthermore, reporting identity theft quickly lets the authorities know they must start hunting a new identity thief ASAP.

Don’t forget to notify each credit bureau individually! Experian, Equifax, and TransUnion all need to be individually notified that your identity may have been stolen. This step has been proven useful.

Once you contact the credit bureaus, you can ask for a credit freeze, preventing an identity thief from altering your credit score further until you unfreeze your accounts.

Cancel Credit Cards, Accounts, and More

Similarly, don’t hesitate to cancel any credit cards, credit accounts, or other financial instruments that might be compromised. 

You can always get new credit cards sent to you and open up new credit accounts once your identity has been secured.

Change Passwords

Go ahead and change all of the passwords for potentially vulnerable accounts. 

If, for instance, you use one or two passwords for all of your major accounts, change each to prevent the identity thief from getting access to any more of your resources.

Monitor Your Records

In the long-term aftermath of identity theft, you should monitor your records, like your credit reports and bank statements. 

Keep track of each of these records continually so you can rest assured that the identity thief has moved on or has been caught by the authorities.

Tips on How to Prevent ID Theft

Of course, it’s always better to stop ID theft from affecting you in the first place. 

Fortunately, there are plenty of ways to prevent ID theft or at least mitigate the likelihood of it affecting your finances.

Keep Track of Your Phone and Wallet

Keep careful track of your phone and wallet, and only keep necessary items in your wallet. 

For example, don’t keep your Social Security card in your wallet unless you specifically take it to an appointment. 

That way, even if you lose your wallet, the thief won’t have access to your Social Security number.

The same goes for your phone, which can be broken into for identity-thieving purposes.

Choose Paperless Billing

A motivated criminal can theoretically steal any bank statements or other financial papers sent to your mailbox. 

To that end, it’s a better idea to opt for paperless billing from your bank, credit union, and other organizations.

Paperless billing means you’ll do your part for the environment and make it that much harder for an identity thief to get access to your info. 

If you're the only one with access to each bank account statement, you'll be less likely to become a victim of identity theft overall.

Check Your Credit Reports Annually

Every year, you are entitled to one free credit report from each of the big credit bureaus. Use these reports to look over lines of credit, loans, debts, and other credit entries. 

Tell the credit bureaus if you see anything suspicious, and don't hesitate to file a report with the FTC. 

Identity theft protection services can also help you file a police report or report identity theft to the relevant authorities.

Don’t Give Out Personal Information

Use common judgment and good sense when talking to individuals online.

As a rule that is commonly acceptable, don’t give out personal information unless you absolutely have to. This is especially true when sending emails, even to coworkers!

Use Strong Passwords

Your critical accounts should be protected by a strong password that includes upper and lowercase letters, numbers, and special symbols. 

These strong passwords will be difficult to guess or penetrate through brute force.

Furthermore, you should only use each password for one account. It might be difficult sometimes, but it is achievable.

If you want help to keep track of your different passwords, use a password manager software tool.

Be Aware of Scam Tactics

Lastly, educate yourself on common scam tactics, like phishing scams. 

Phishing scams involve an identity thief posing as someone legitimate over email and requesting information from you. 

You should also be aware of the possibility of phone scams, where someone posing as a government agent or official may call you and ask for information like your Social Security number.

Always ask questions if someone wants your personal info, and remember you can always say no. 

If you receive an email from a strange email address you don’t recognize, don’t open it up at all. Just send it straight to the trash bin of your email platform.

The bottom line

In the end, identity theft is something everyone needs to anticipate and protect themselves against. 

With the above tips by Homebody, you’ll be much better defended against most types of ID theft, and you’ll be able to keep yourself and your family safer than ever.

The Homebody Learning Hub

At Homebody, we believe in empowering people like you with quality knowledge. Our website hosts many resources to find educational content on various topics. You deserve just the best and nothing short.

Apart from ID theft prevention, there are other things you can learn, like renting and insurance to pet health and more.

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