5 Warning Signs You Need to Know to Protect Against Identity Theft
Identity theft is, unfortunately, a common and growing problem that occurs when a criminal uses another individual's personal or financial information for monetary gain and other purposes. The Federal Trade Commission (FTC) received 4.8 million reports of fraud and identity theft in 2020, a 45 percent increase from the year prior. This was due in large part to scams associated with COVID-19-related federal stimulus payments.
The Aite Group, in its U.S. Identity Theft: The Stark Reality report, states nearly half of all Americans were victims of financial identity theft in 2020, losing a combined $712.4 billion. It projects even more losses for Americans in 2021. There are several things you can do to protect yourself against identity theft. If you are a victim of this crime, it's critical to immediately contact law enforcement, the IRS, and any relevant credit agencies. Below are five warning signs that you may have been a victim of identity theft.
Unknown or Missing Bills
Scammers often use another person's information to open credit cards in their name and rack up charges they have no intention of paying. They might also use personal information to sign up for cell phone service or upgrade services on their own accounts. If you receive a bill for a credit card, cell phone, or other services you don't recognize, contact the service provider immediately and let them know of the fraudulent activity.
Missing bills are another potential sign of identity theft. If they have the appropriate information, identity thieves can change your mailing address and direct bills elsewhere to give them more time to run up fraudulent charges unnoticed. Be sure to keep track of your bills and payment dates. You also can set up an online banking account to track charges.
Denial of Credit or Unfamiliar Loan on Credit Report
If you've been denied credit despite regularly making bill payments and maintaining a good credit score, there's a good possibility you've been a victim of identity theft. Scammers will typically run up as many charges as possible on existing cards, or create new cards and max those out without intention of making payments. Obviously, this reflects poorly on your credit score and can result in financial institutions rejecting your application for a loan or new credit card.
You should review your credit reports regularly and, while doing so, look for any suspicious or unfamiliar activity. While "hard" inquiries from prospective lenders can negatively affect your score, "soft" inquiries have no impact on your credit. Each of the three primary credit bureaus (Equifax, TransUnion, and Experian) allow you to access your credit report free of charge once per year. To do so, visit annualcreditreport.com.
Collections Agency Calls
Unless you discover you have been a victim of identity theft on your own and notify the appropriate parties, you may find out via a call from a collections agency. Calls from these bill collectors may come from unrecognizable numbers and, while you might be inclined to ignore them, it can be helpful to answer so you can take necessary actions to halt fraudulent charges and restore your credit.
It's important to consider, however, that many scammers pose as debt collectors to seize your personal information for malicious use. Legitimate debt collectors will first send out a formal letter in the mail and, if they call, will let you know the company they work for and provide their contact information. Scammers, on the other hand, might ask to be paid via money transfer or prepaid credit cards. They also will use fear tactics to get you to pay them. For example, a supposed debt collector who threatens you with jail time or another penalty that would be a violation of your rights is a warning that the person may not be legitimate.
Bills for Strange Medical Procedures
Scammers don't just leverage your personal information to set up credit cards or take out loans, they also can use it when receiving emergency treatment at a hospital, or file fraudulent insurance claims following medical procedures. This can negatively impact your eligibility for medical benefits and future treatment, as your health records might show inaccurate information. Report any unknown medical bills or statements of benefits to your healthcare and health insurance providers.
Unfamiliar Login Alerts
Phishing is one of the most common ways scammers can steal your personal information online. It refers to fraudulent texts or emails that often contain links to download malware, which finds and sends personal information to remote computers. Scammers can sell this information on the dark web or use it themselves to hack into your email and other personal online accounts.
Many websites send notifications that you have logged into your account on a new device. Change your password and look for other signs of identity theft if this occurs.
The Best Solution
The best way to protect yourself against all types of identity theft is to have a formal plan in place that not only monitors your various credit and identity components, but which also includes full restoration services, done by professional licensed investigators and attorneys. Since we all have too much of our personal information out in the cloud these days, it is not possible for us to actually prevent identity theft, as we cannot control breaches that occur at entities outside of our control. A comprehensive ID theft protection and restoration plan can be purchased for approx.. $1-1.50/day.