The term ‘identify theft’ was coined in 1964 following a wave of phone scams. Criminals would obtain a victim’s personal and banking information after claiming the person had won a lottery or other gifts. In exchange for this private information, the victim would receive their prize. Spoiler Alert: the prize never came. This type of fraud made up nearly 100% of all identity theft cases in the 1960s.
Although identity theft by phone still makes up 10% of identity theft cases per year, identity theft, also known as identity fraud, has taken on many faces in the last sixty years. Criminals steal the identities of unassuming victims by using their names to receive medical care or unemployment benefits. These crooks will open fraudulent lines of credit to make large purchases and accrue debts they never intend to pay back, leaving the victim with the unpaid debt and a possible reduction in a credit score. According to the Federal Trade Commission, 1.4 million reports of identity theft were made in 2021, and Javelin reports that identity theft cost victims in the US $56 billion in 2020.
Just like inflation and interest rates, fraud continues to rise despite the best efforts of law enforcement and technology. Being aware of the tactics and remaining vigilant can prevent identity theft from happening to you.
Be vigilant with these tips
There are several things you can do to be vigilant and protect yourself.
- Don’t ignore bills from entities or people you don’t know. A bill for a service you never received or debt you didn’t borrow may indicate that someone else opened an account in your name.
- Routinely review bank and credit card statements for charges you did not make. Criminals will often charge a small amount they believe will be overlooked and then return to take more if the debit goes unnoticed.
- Check your credit report for inquiries from entities you don’t recognize or didn’t authorize. This could be a sign that someone is using your identity to open a line of credit. Some credit card companies offer free credit monitoring and soft credit inquiries that don’t affect your credit score.
- Avoid using public Wi-Fi networks to conduct business or make purchases with a credit card or personal information. Criminals can hack into these networks and steal your information. If using a public network, check your firewall settings or utilize a VPN.
- Create different passwords for your accounts. Secure passwords are complex, long, and unique, with at least 15 characters. This makes it more difficult for a hacker to crack. Use different passwords and avoid repeating passwords among your accounts.
If you believe you may have been a victim of identity fraud, contact the Federal Trade Commission to report the theft and establish a recovery plan.