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:
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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:
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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.