What is Identity Theft?

Identity theft occurs when someone obtains your personal information, such as your credit card data or Social Security number, to commit fraud or other crimes. The Federal Trade Commission estimates that 9 million Americans suffer identity theft annually. It sounds like a big number, but it isn’t.

In 2022 alone consumers reported losing close to $9 billion to fraud. That was up more than 30 percent over 2021.

Fear is Contagious

Hysteria has been stoked by much-publicized data breaches. In reality, identity theft only touches a sliver of the U.S. population each year (about 3%). One-quarter of those cases are credit-card fraud and not full-blown identity theft, according to FTC figures. The credit-card fraud occurs when a thief uses your credit card to make purchases. More serious is when someone uses your information to open accounts or take loans in your name. That’s when you’ll have to fight to get your credit restored and your name cleared, an arduous process that can take months or years to complete.

Is Help on the Way?

In response to concerns over identity theft, numerous companies and financial institutions have stepped in with products that monitor your credit, reimburse you for lost wages or funds and guard your identity. Some employers also now offer ID theft insurance to help you reduce the amount of time and money spent resolving the crime, so check with your company’s benefits specialist about your eligibility.

What are the Top 3 Things You can do to Protect Yourself?

1. Use Strong, Unique Passwords for Each Account

One of the most effective ways consumers can protect themselves against identity theft is by using strong and unique passwords for each of their online accounts. This means avoiding common phrases or sequences that can be easily guessed and incorporating a mix of letters, numbers, and special characters. Additionally, it’s crucial to avoid using the same password across multiple accounts. If one account is compromised, this practice prevents hackers from gaining access to other accounts.

2. Monitor Financial Statements and Credit Reports Regularly

Regular monitoring of financial statements and credit reports is essential in detecting identity theft early. Consumers should frequently review their bank statements, credit card statements, and credit reports for any unauthorized transactions or changes. If anything suspicious is noticed, it should be reported immediately to the financial institution or credit bureau. Many credit card companies and banks offer free alerts for unusual activity, which can be a valuable tool in early detection.

3. Be Wary of Phishing Scams and Protect Personal Information

Being vigilant about phishing scams and safeguarding personal information is crucial in preventing identity theft. This involves being cautious about sharing sensitive information like Social Security numbers, bank account details, or passwords, especially online or over the phone. Consumers should be skeptical of unsolicited emails or calls asking for personal information and verify the authenticity of such requests by contacting the organization directly through official channels. Additionally, using antivirus software and keeping systems updated can help protect against malicious attacks designed to steal personal information.