How does identity theft happen?
Preventing identity theft begins with the question, “How does identity theft happen?” Understanding how identity theft works can help consumers protect themselves from scams and other fraudulent scenarios. Of course, with rapidly developing technology and increasingly imaginative criminals, the causes of identity theft continue to evolve. Below, we’ve outlined common identity theft causes, but consider it a jumping-off point rather than an exhaustive catalogue.
Lost or Stolen Personal Documents
Although consumers store more and more information online (and large-scale data breaches can quickly affect thousands), studies indicate that a stolen wallet or purse remains one of the top explanations for how identity theft happens. A typical person’s wallet contains an abundance of sensitive personal details, such as credit cards, driver’s license, and sometimes even Social Security number, which identity thieves can use to charge purchases, open new lines of credit, obtain housing, and apply for loans.
Of course a wallet is just one of the physical resources an identity thief can leverage. Consider these as well:
- Digital devices: Smartphones, laptops, tablets, and wearables all put email, banking, and more right at the user’s—and would-be identity thief’s—fingertips. Neglecting regular software updates and not using a passcode leave you especially vulnerable.
- Mail: Do you use a secure, locked mailbox? You should, considering that both incoming and outgoing mail can include bank statements, checks, tax documents, and pre-approved credit offers.
- Trash: Identity thieves aren’t above dumpster diving, so shred sensitive documents, such as financial statements and health insurance claims, before throwing them out. Even prescription medicine leaflets are a liability.
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Insecure Online Data
The digital era has brought many conveniences, from making purchases without leaving home to viewing accounts and paying bills with the click of a mouse. While our increasingly paperless lives may lessen the risk of off-line causes of identity theft—such as stolen mail or trash—they also render us vulnerable in new ways. Here are a few examples:
- Unsafe connections: If you’re using the internet without a firewall and antivirus software, you could fall prey to hackers who might steal your personal information.
- Insecure websites: When shopping online, only trust reputed businesses with a secure (https) domain.
- Password security: Creating easy-to-guess passwords, applying the same password across multiple websites, and storing all passwords in one place leaves you vulnerable.
- Phishing: Phishing scams occur when a criminal poses as a legitimate entity, such as an auction site, IT administrator, or bank, and requests a target’s information via email or a fake website.
- Doxing: Doxing happens when a cyber criminal obtains a victim’s personal information and then threatens to publish it online unless the victim performs certain desired actions.
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Company-Wide Data Breaches
Among the leading causes of identity theft, data breaches stand out as they can rapidly impact a massive group of people. Consider the 2013 Target incident, where hackers gained access to the credit card information of millions of shoppers at the major national retailer. At the most fundamental level, a data breach occurs when secure information gets released—whether through a malicious act or by accident—to an unsafe environment. Aside from credit card numbers, a data breach may leak victims’ email addresses, passwords, Social Security numbers, and even those same personal identifiers of victims’ family members.
People fail to notice the telltale signs of identity theft for a variety of reasons. Perhaps identity theft feels like a vague threat, one that they won’t fall prey to
Identity thieves sometimes target the deceased, adding greater pain to the already difficult grieving process.
It may seem time-consuming to research and adopt best practices to prevent identity theft. However, identity theft prevention will ultimately save time in the long run.