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5 ID Theft Scams and Attacks You Need to Know about in 2023

Identity theft, which involves someone using another individual's personal information for financial gain, is an increasingly pervasive problem in the United States and around the world. According to the US Federal Trade Commission (FTC), consumer identity theft complaints reached more than 1.4 million in 2021, up 3.3 percent from the year prior. In addition, fraud complaints rose 19 percent year-over-year to more than 5.8 million, while losses from those reported instances exceeded $6.1 billion.

With the business world becoming increasingly digital and consumers able to make online purchases with almost every retailer, there's a wealth of sources through which scammers can illegally obtain someone's personal information. The biggest threat to consumers is new account openings with financial institutions as it can be difficult for banks and credit unions to detect bad actors.

"Financial institutions are seeing these types of scams show up for new digital account openings," notes Lou Senko, chief availability officer for Q2 holdings. "Since the financial institution doesn't have an existing relationship (behavior profile) of the prospective new user, it becomes difficult to detect. There are several tools available to detect and block automation, non-human actors, and behavioral analysis matches for existing users. Still, a new, previously unknown user is more difficult to identify."

While there are several technology solutions to help protect your information online, it's even more critical to exercise caution when giving out such information and to be mindful of possible scams. With that in mind, here's a look at five of the most common identity theft and fraud scams for 2023.

1. Student Loan Forgiveness Scams

Just as they did with COVID-19 pandemic relief programs, scammers are taking advantage of the federal student loan forgiveness program. In August 2022, President Biden announced that eligible borrowers could have as much as $20,000 in student loan debt forgiven. While this announcement was greeted with enthusiasm by those burdened by large loans and high interest rates, the FBI immediately warned borrowers to be on the lookout for potential scams.

Using fraudulent urgent messages threatening fines or other punishment, scammers contact these borrowers via phone or email and may direct them to fake application sites that collect their bank account information and Social Security number. In many cases, these scammers will also charge an expensive application fee. It's important for consumers to know, however, that the U.S. Department of Education doesn't contact individuals by phone and that there is no charge to apply for student loan debt forgiveness.

2. SIM Swapping and Other Phone Scams

SIM swapping is a somewhat newer but increasingly common scam in which a criminal steals another person's mobile number and assigns it to a new SIM card in their own phone. With access to your SIM card, the scammer can possibly access all of your logged-in accounts or reset passwords using links or codes sent to their device.

Non-SMS multifactor authentication is the best form of security for SIM swapping. Apps with this security feature require two pieces of identity verification. If you feel you've been targeted in a SIM swapping scheme, you can also ask your mobile operator to temporarily freeze number porting.

Other common phone scams include robocalls and phone calls in which scammers impersonate authority figures, relatives, or representatives from well-known companies and use scare tactics in an attempt to get your personal information. You should also be wary of potential scams when downloading apps or scanning QR codes.

3. Credential Stuffing

Credential stuffing is a complex type of identity theft scheme in which scammers track down usernames for specific apps and cross-reference them against other less-secure apps while attempting to guess the account holder's password. In December, PayPal reported that nearly 35,000 of its users had their personal information (names, addresses, Social Security numbers, etc.) stolen through credential stuffing. While the online payment company didn't detect any unauthorized transactions from affected accounts, it is offering those account holders two free years of ID monitoring from Equifax.

While credential stuffing is far from a sophisticated scam and has a low success rate, individuals can still take steps to protect themselves. Having unique usernames and passwords for each of your apps is the best defense.

4. Romance Scams

Consumers should also exercise caution when speaking with strangers on social media platforms and dating apps. Romance scams, in which thieves create fake profiles to engage with others for the purpose of financial theft, have been increasing steadily in recent years. The FTC reported that individuals lost nearly $550 million via romance scams in 2021, which is six times more than the reported losses in 2017.

5. Cryptocurrency Scams

Because it is unregulated, the cryptocurrency space has become a major source of fraud and ID theft for scammers. In a report published in June 2022, the FTC reported that total losses from cryptocurrency scams exceeded $1 billion since the start of 2021. Scammers often impersonate celebrities or well-known crypto websites and message targets with the promise of fake prizes or fraudulent contests.

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