Identity Theft Alert: 6 Ways Your Identity Can Be Stolen
Cybercriminals are ramping up identity theft efforts to gain access to financial accounts and personal information. The Bureau of Justice Statistics released a report in 2023 indicating that more than 23.9 million people had experienced identity theft over 12 months. Average losses included $880 in cash, and people with new accounts saw upwards of $3,400 disappear. Identity thieves have harmed approximately one-third of Americans and made off with more than $16.4 billion.
That's why law enforcement continues to warn community members about protecting sensitive personal information. You can take steps to avoid becoming another statistic.
What is Identity Theft?
Identity theft involves a thief acquiring another person’s personal information, such as their Social Security number, driver’s license, birth and death certificates, bank account PINs, and other items that could be used to commit a crime. The most common uses of identity information include writing bad checks, draining bank accounts, opening a line of credit, and making online purchases.
In 1998, Congress passed the Identity Theft and Assumption Deterrence Act, making identity theft a federal crime. Depending on what the personal information is used for, identity theft convictions carry a 15 to 30-year prison sentence. Despite the risk of significant jail time, identity theft criminals continue to threaten hard-working people daily.
6 Common Types of Identity Theft
To say identity theft in America is big business is an understatement. While law enforcement and government agencies are doing everything possible to bring thieves to justice, the effort has proven difficult. That’s mainly because this class of criminals rarely uses brute force tactics and prefers to remain unseen. Staying aware of the possible ways your identity may be stolen can help you stay alert and avoid becoming an easy target.
1: Financial Identity Theft
Financial identity theft occurs when an unauthorized individual uses information such as a Social Security number, birth certificate, or driver’s license to open checking, savings, or credit card accounts. The fraudster typically opens these accounts in the victim’s name. The criminal then assumes your identity to complete a variety of transactions.
Initially, the scammer may deposit money into accounts and make on-time credit card payments. This allows them to increase their credit card bandwidth or apply to other lenders or retailers.
Once the accounts are sizable enough to make the federal crime worth risking a prison sentence, cards are maxed out, and bad checks are written. Because these debts are not under the user's real name, creditors initially target the victim with collection actions.
2: Medical Identity Theft
Medical identity theft involves much of the same personal information used in financial crimes. Fraudsters typically use your name and Social Security number, coupled with insurance data. Filing unauthorized claims using private health insurance policies has paled compared to Medicare and Medicaid fraud. A 2023 CNBC news report indicated taxpayers lost upwards of $100 million annually due to Medicare and Medicaid abuses.
Along with purchasing prescription drugs, identity theft operations are putting in claims for unnecessary medical equipment. These expensive products are typically resold below market value for cash on the black market. While the federal government is, again, trying to crack down on medical identity theft, criminals have gone on the record stating that Medicare fraud is easy and they only need documents such as health insurance cards to get started.
3: Online Identity Theft
A hacker sitting in a café halfway around the world may be trying to burglarize your cell phone or another device to steal your personal identity information right now. That statement would be less frightening if it weren’t true. We hear about hackers from other countries trying to bring down American infrastructure or spy on the government regularly. But what flies under the radar—to some degree—is the fact that digital identity theft is big business.
Not only will a cyber criminal in a foreign land go unpunished, but these digital thieves relentlessly dream up new ways to outflank anti-virus software and firewalls. The most common way digital thieves steal personal information involves “phishing.”
This phony email scam has proven to be an effective way to make hard-working people feel a sense of urgency. Then, they provide usernames, passwords, and other identity information to the wrong individual. Once inside your device and digital accounts, hackers sell credit cards, bank account information, and Social Security numbers on the Dark Web.
4: Criminal Identity Theft
It may seem impossible, but some criminals are so brazen that they will double down after being arrested. It's not uncommon for identity theft criminals to be involved in wide-reaching schemes. Some boldly present themselves as someone else when they get caught for something else.
Having a driver's license with a replaced picture or matching the description can sometimes fool law enforcement. If the felon also knows your Social Security number, getting processed and arraigned is merely a nuisance for them. The impostor quickly skips bail and town. The court will likely issue a warrant for failing to appear in the identity theft victim's name. Yes, having your information stolen can lead to your arrest.
5: Synthetic Identity Theft
Although this crime seems more challenging to commit than other types of identity theft, it occurs too often. Synthetic identity theft requires someone to gain access to multiple personal records. The goal is usually to create a new and elaborate identity that allows criminals to evade law enforcement or orchestrate misdeeds with impunity.
A false persona can be created by combining items such as a birth certificate, Social Security number, driver's license, etc. Criminals may go as far as to take out a mortgage, car loan, or credit card and live under your name indefinitely. When the jig is up, creditors and police could question you.
6: Child Identity Theft
It’s important to keep in mind that adults are not the only targets of identity theft. Minors — particularly those who are 16 years and older — have become a focus. Criminals understand that parents start to teach financial responsibility and may even make them authorized credit card users. Teens 16 and older often have driver’s licenses, a prime resource for fraudsters.
Scammers who latch on to the personal identity records of minors can go to work setting up a false persona, open a variety of accounts, make purchases, and apply for individual credit cards at the age of 18. The thieves are not concerned about interest rates or loan terms because the victim will have to unravel the debt once they have skipped out.
Allegiance Has Resources to Help
Allegiance is committed to helping our members protect their personal identity information. One of the best ways to keep identity theft at bay is to monitor your accounts inside Allegiance online banking and the mobile app. You can set up transaction alerts and monitor your credit report daily, for free.