Identity Theft

5 Surprising Facts About Identity Theft

EPF Last Update: May 12, 2020

Identity theft shocks us all when it happens, but it should not be a surprise when there’s a new victim every two seconds!

That said, there are many things about identity theft that catch people off guard.

Five facts that might surprise you include:

New Borrowers are Still High Risk Victims

New borrowers have this false belief that identity theft will not affect them. The truth is that this crime happens to everyone; even minors get their identity stolen. It’s not hard to create fraudulent bank accounts and credit cards. With endless ways to cash out stolen funds, thieves are not picky about who they attack.

Since you are a new borrower, you will not have a FICO score to track. This makes it a little harder to know when your identity gets stolen. But, Credit Karma recently announced a new, free service for thin credit files. If you want to establish credit without becoming a victim of fraud, then this is an invaluable asset that’s well worth trying out.

Using a credit monitoring service from the start is a great idea. Not only does it help with building credit, but you will also be able to catch identity fraud right away!

Your email inbox might be the Entry Point

If your email gets breached, what will the intruder see?

Many are guilty of leaving pieces of sensitive information in their e-mail inbox. People do this without realizing, and many tidbits of private information add up over time. Sooner or later, there are enough pieces to piece together that the hacker can steal your identity.

An e-mail cleanup should be done at least every now and then. Either delete all your e-mails, or remove by searching specific keywords. You can scan your inbox for terms like “password” and “registration” for example, to get an idea of what you might want to delete.

In most cases, people fail to hide their mailing information, and their registration details. The latter might grant access to more credit card information once the third-party site gets breached. Either way, your inbox needs to stay clean to avoid giving criminals a dangerous advantage.

Victims Can Lose a Lot of Their Own Money

Identity theft victims face an average of $1,000 in identity restoration costs. On top of this cost is a big, hidden expense – the 100’s of hours you spend fixing your identity. It also ignores the big step back your credit score takes. So, do not ever think these problems just go away on their own without affecting the victim.

To put it simple, there is a lot at stake when someone becomes the victim of identity theft. It’s not uncommon to see a borrower pay off the bad debt, just to prevent other problems. This might patch the problem in the short-term, but more fraud will happen. Any case of identity theft needs a full resolve from day one, so every victim faces the same losses.

That said, the total loss of an identity theft case will vary depending on the situation. For example, you might lose $60,000 to identity fraud, but only be responsible for $5,000 of it because of your bank’s policy. You might have all your losses covered for you, or you could be 100% responsible for the illegitimate debts.

In 2012, the BJS claimed that 14% of victims faced an out-of-pocket loss. The report showed that approximately 18% of identity theft victims that pay out of pocket will incur a loss of $1,000 or more. While most victims never end up paying a large amount, there are a few cases where the victim loses a fortune.

Everyone is a Potential Identity Theft Victim

You do not need to have any open credit lines to have something to lose. The fraudsters can open up new accounts in your name. There is always another way for them to cash out, while holding you liable for the crime.

Just think about all the different things you do in a day. Many could support an identity theft situation. You get up and go for a coffee that’s paid for on your credit card, so you risk having your card info stolen. It just takes one rogue employee deciding to install a card skimmer into their machine, and your identity is gone. You even have to risk your credit card numbers when reserving a hotel room.

It’s important to open your eyes to the high level of risk surrounding identity theft. There are many ways to pull off this crime, at a profit, so criminals never fail to capitalize. You must be quick on your toes, and always working on your defense.

Old Credit Card Transactions Can Haunt You

Identity fraud is often done by stealing information from credit card owners. In most cases, the transaction gets done months or years before the fraud begins. This is especially true when looking at how criminals perform identity theft online. For example, a criminal might hack a store you shopped at a few years back, where your credit card info is still on file. If your card information is the same now, they can make a quick copy and cash in at your expense.

Customers can have their credit card information stolen through skimming devices. This was clear during Target’s security breach, which affected close to 70 million individuals. For some, the damage took forever to take effect. Yet, the old credit card uses were still disastrous, even years after the fact.

For this reason, it’s good to watch out for new payment processors that improve your card security. If your favorite store starts accepting PayPal or Google Wallet, you might prefer paying from your card to them. This eliminates the repeat risks you take when paying at many different online shops. As there are many digital wallets that work on point-of-sale systems, you can also find alternatives in real life.

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