What Is Identity Theft and What Are the Most Common Types?

Here’s another word for identity theft: You’ve been scammed!

Receiving emails that lead to your account being hacked or answering phone calls and giving any sensitive info only to find your credit card was used by an unknown user are examples of real-life identity theft scenarios.

Put simply, identity theft is the use of someone’s personal info to commit fraud and gain financial benefits.

Let’s begin!

What Is Identity Theft?

Identity theft is a crime that involves the illegal OBTAINING AND USE of personal or financial information of another person for unauthorized transactions or purchases.

Personal information that can EASILY be stolen include the following:

• Your Social Security Number
• Your Bank Account Number
• Your Credit Card Information
• Email address
• Medical records
• Ic number

Think of it this way: an identity thief STEALS information with the intention to COMMIT FRAUD.

Ultimately, prepare to have your credit report filled with suspicious activities.

The crime is common enough as it is committed through MANY UNIQUE DIFFERENT WAYS… more especially now through the advent of TECHNOLOGY.

What Are Some Types of Identity Theft?

I’ll walk you through 8 different types of identity theft in this section.

#1 Financial Identity Theft

Financial identity theft occurs when identity thieves USE another person’s identity or personal information for FINANCE PURPOSES:

• Credit
• Benefits
• Goods and Services

It is the MOST COMMON TYPE OF IDENTITY THEFT… and moreover, it exists in two forms:

Existing Account Takeover Identity Theft

This type of identity theft is common because CRIMINALS CAN EASILY ACCESS EXISTING ACCOUNTS.

If you have an existing Social Security number, a credit card number, a driver’s license, or any information that could be of interest to identity thieves, then you’re susceptible to ID theft and fraud.

This type of account takeover fraud usually happens this way:

• Criminals STEAL something from you such as your credit card information
• They then make small credit or debit charges so their fraud goes unnoticed
• This goes on until they can ensure their own safety
• A HUGE charge will suddenly be reflected on your records

There is, however, an upside to this type of identity theft: you can DETECT it.

For as long as you have identity theft protection systems in place, you can PROTECT and REGULARLY check your consumer and credit report.

New Account Identity Theft

Criminals also look for ways to start NEW ACCOUNTS under your name. Compared to the former, this fraud is HARDER to detect.

Thieves can sift through your TRASH or PUBLIC RECORDS to open NEW bank accounts and secure NEW credit card numbers under your name.

Again, this will lower your credit score and leave you in DEBT.

Identity theft protection is particularly hard to secure for this because:

• You probably won’t receive any BILLING STATEMENT
• You will only know about your CREDIT REPORT if you regularly check and request for it
• New accounts may ONLY use your credit details and have bogus personal information such as name and address for a stronger fraud

The Solution?

Sign up for a CREDIT MONITORING SERVICE so you can get credit reports from the major credit bureaus regularly. It would be best to do this the moment you are eligible to avail of one.

#2 Social Security Identity Theft

Social Security numbers are among the MOST WIDELY USED identification channels used for official purposes. If you’re a citizen receiving any income, then it’s imperative you HAVE one.

As such, this is one of the most common types of identity theft for TWO MAIN REASONS:

• EVERYONE who earns money has one, and
• A person with access to a social security number can reap its BENEFITS

What Can An Identity Thief Do With Your Social Security Number?

There are quite A LOT and you’ll learn more about them further in this article!

In the meantime, allow me to inform you briefly so you can be warier about this type of identity fraud… these thieves can:

• Apply for credit cards and loans
• Not pay outstanding balances
• Receive medical and disability benefits, among others
• Get a job under your name
• Tax you more than what you’re supposed to pay
• Lower your credit score

What Social Security theft really steals from you is your privilege to RECEIVE BENEFITS further into your career.

The Solution?

Constantly check your CREDIT REPORTS for credit monitoring.

If you happen to see an entry or employer you DON’T RECOGNIZE, then I highly suggest that you look into it as soon as possible.

#3 Tax Identity Theft

Tax identity theft involves an imposter using your personal information to file a FAKE state or federal tax return with the main purpose of COLLECTING A REFUND under your name.

The information these thieves will look for includes your BASIC INFORMATION, most especially your social security number.

To make sure you won’t fall for these types of identity theft, here are some scams to keep an eye out for:

• Phishing emails from the  Internal Revenue Service or relevant financial institutions. Before clicking on a link, make sure the SENDER and SITE DOMAIN is official.
• Otherwise, those links are surely bogus websites or suspicious malware that extract your personal information from your computer.
• Phone calls or text messages that seek to INFORM you of your balances or even THREATEN you with legal action. The IRS will never do this outside of their official mailing system.

How Do You Know If You’re a VICTIM to Tax Identity Theft?

Other than your routine credit report filings and the IRS reaching out to you beforehand, the only way to know about it is if your request for a tax return gets REJECTED.

This informs you that SOMEONE has already filed a return in your name.

Here’s what you can do when faced with this identity theft:

• Contact the IRS immediately and inquire about pertinent details
• Place a fraud alert and file a fraud claim
• Verify your identity
• Secure your channels for future tax returns

#4 Medical Identity Theft

It’s possible for someone to RECEIVE FREE MEDICAL CARE ILLEGALLY under your name after medical identity theft.

This type of identity theft is EXTREMELY DANGEROUS. Why? Simply because its repercussions go beyond your finances… here’s why:

• Identity thieves may use your HEALTH INSURANCE that you have been saving for yourself… yes, this financially affects you AND it reaps you off of your future benefits in case of an emergency.
• Even more pressing, doctors may update your medical records with FALSE INFORMATION only relevant to the thief! You wouldn’t want to ever be treated wrongly, nor do doctors want to treat you wrongly either.
• Life insurances may also become inaccessible to you for the sole reason that the PREMIUMS aren’t calculated based on your own medical history anymore.

Saving for medical insurance, only for your savings to be gone by medical identity theft is not only UNFAIR but also LIFE-THREATENING.

Now Regarding Your Medical Bills…

Remember to DISPUTE bogus bills that you receive.

• Did you receive such treatment?
• Are the details relevant to you?

These are questions you should ask yourself when going over your records. If any of the information seems questionable, DISPUTE the bill immediately.

Also, remember to ROUTINELY sign up for credit monitoring.

Find out the dips in your credit scores… you can sometimes relate these to UNPAID medical bills that have never reached your doorstep or email channels.

#5 Child Identity Theft

Children are sometimes given a Social Security number upon birth. They, too, are especially susceptible to child identity theft.

Imposters can use a child’s identity for personal gains:

• Employment
• Residence
• Loans
• Avoidance of arrest

These are all possible because with a child listed as a DEPENDENCY, chances for application success increase.

The worst cases for this type of identity theft include ACTUAL new applications for  Social Security numbers AND new accounts for more benefits… all of course, with the use of the child’s personal information.

Why Is This Type of Theft Appealing to Scammers?

There is a simple answer to this question: children simply do NOT have information or reports that could result in the REJECTION of new applications.

• A child will also not be interested in credit monitoring until they are right of age to apply for school, a car, or credit card loans
• By the time this happens, the child will ALREADY be indebted with low credit scores
• Personal information can also be EASILY STOLEN from school public databases or store AND social media accounts

As a parent, it may be possible for you to RECEIVE the following in the event of child identity theft:

• IRS notice for tax burden upon your child
• Notices of government benefits rejection
• Unknown bills from unknown accounts
• Credit card bills and bank statements under the name of your child

Adults can REGULARLY check for their credit reports, but children?

Parents would have to consciously file for REQUESTS from credit bureaus for their personal credit file.

#6 Criminal Identity Theft

Criminal identity theft occurs when a criminal gives false information to a police officer. Of course, with the intention to avoid an arrest or a summon.

You’ll be surprised by just how easy it is to do this:

• Imposters can often come up with fake paperwork (most commonly a driver’s license) to support their FAKE identity
• Such fake identities could include your own personal information
• Criminals usually bank on PUBLIC information from your social media accounts

These types of identity theft are also TRICKY. You’ll only realize you’re a VICTIM until you apply for a job that requires ample background check.

In short, criminal identity theft can get you in trouble for a crime you did NOT commit.

#7 Synthetic Identity Theft

Criminals commit synthetic identity theft when they COMBINE REAL AND FAKE information to create a new identity.

These ACCOUNTS are used to make fraudulent purchases AND receive benefits from various institutions. Furthermore, these types of identity theft often result in the following:

• Stealing money or loans from a credit card company based on a fake identity
• Credit card fraud losses in the United States

These frauds affect retailers and companies, yes. But as a consumer, this type of fraud makes it DIFFICULT to detect.

Simply, synthetic identity theft is an EVOLVED way identity thieves achieve their schemes.

Despite having used your Social Security number, a fake name and/or address will NOT have the finances appear on your credit report. This type of ID theft steals personal information that could also eventually result in employment identity theft.

Once again, identity theft protection proves to be important especially if you have YET to avail of a credit monitoring service.

#8 Estate Identity Theft

If not processed and closed properly, accounts tied to the deceased may still be used by imposters.

This type of identity theft leaves a GREATER IMPACT on the deceased’s family members, friends, relatives, or even former employees for credit reports. More so, it impacts subsequent inheritance.

To avoid estate identity theft, relatives should make sure that:

• An official death certificate is FILED AND ISSUED
• Appropriate accounts (banks, credit cards, jobs, etc.) are informed about the passing away of the deceased for their OFFICIAL CLOSING and TERMINATION
• Financial institutions are INFORMED about the management of the deceased’s finances
• Outstanding debts are ADDRESSED

I understand how this might be difficult for the families to process, but these are necessary actions one must take to avoid future debts and problems.

Common Questions Answered

How EXACTLY Can Thieves Manage to Steal My Information?

You’ll be quite surprised by just how CREATIVE fraudsters have evolved through the years.

TRADITIONALLY, these are some of the ways they can steal your identity:

• Sifting through TRASH BINS… yes, simply throwing your credit card statements in the trash CAN make you a prone victim to identity theft!
• Sifting through your MAILBOX… and yes, it is ALREADY a crime in itself to do this, but it’s also one way imposters can steal identities!
• Accessing HARD DRIVES from stolen or discarded computers… it’s really important for you to clear the memories of your devices before getting rid of them, and this is why.
• Through GOSSIPS and mere MONITORING… some fraudsters actually DO take time to observe habits physically in the office or places you frequent like malls.

Even worse? TECHNOLOGY has made stealing easier.

IN MODERN TIMES, these are some of the ways they can steal your identity:

• Accessing CORPORATE DATABASES… hacking through databases is a lot easier now, so don’t be surprised if you’re certain that you have NEVER disclosed your information anywhere.
• BUYING information from database managers (or hackers)… yes, fraudsters make a BUSINESS out of it too.
• Accessing UNPROTECTED cloud-based public records… if ever you DO need to provide some of this information publicly, MAKE SURE the sites that you trust are secured and private.
• Using information-gathering MALWARE or VIRUS… this should be straightforward as is. Fraudsters CAN resort to advanced hacking and everyone is susceptible to this type of scheme.
• Using deceptive EMAILS or TEXT MESSAGES… you may have received a couple of these already, and it’s actually amazing how REAL these messages could sound!
• Browsing through SOCIAL NETWORKING SITES… fraudsters bank on the details that you publicly put on your profiles. Be careful of what you post especially on Instagram, Snapchat, Facebook, and Twitter!

How Does Identity Theft AFFECT me?

The quick answer: identity theft can easily ruin your FINANCES, CREDIT SCORE, AND REPUTATION.

Finances and Credit Score

Finances should be straightforward enough. You LOSE MONEY simply because fraudsters pretend to be you for easy money acquisition.

You wouldn’t even know if you’re a victim of identity theft UNTIL you receive a call from your creditor. It might also be a reason why your bank loan applications keep on being rejected.

Reputation

Of course, this is all reflected in your REPUTATION.

• Running out of cash?
• Missing out on payment deadlines?
• Continuously taking out loans?

The point of the matter is that: NO ONE WILL CARE IF YOU ARE A VICTIM OR NOT.

For the people around you, what’s important is you also pay them back promptly AND completely.

What Do I Do If I’m an Identity Theft Victim?

I highly suggest you REPORT IT IMMEDIATELY.

A victim of identity theft should act on the following as fast as possible:

• File a police report. This will immediately alert the authorities that ANY fraudulent action using a specific account is NOT made by you. Often times, this precaution protects and insures you of future expenses in court should it matter.
• Get copies of the police report. You might need to present these to your insurance agencies, medical providers, credit bureaus, the Federal Trade Commission, etc.
• Likewise, file an identity theft complaint with the Federal Trade Commission
• Place a FREEZE OR FRAUD ALERT on your credit reports
• Contact your credit managers, your banks, concerned relatives, and any related personnel as well

Why Should I Monitor My Credit?

Monitor your credit to SPOT a potential identity theft.

There is NO such thing as monitoring your accounts too much. The way I see it, it’s ALWAYS better to review your personal information and credit scores regularly.

Why is that so?

• You should be the FIRST PERSON to know about your credit report… much more if said credit report is being used for fraudulent accounts
• The only way to improve your credit scores is to ACTUALLY know about your credit report

Credit monitoring increases the chances of you DETECTING inaccuracies and potential identity fraud on your credit reports free of charge.

Wrap Up

No one is safe from identity theft.

Yes, these frauds can easily affect your finances and tax return… but perhaps even more than LOWERING your credit reports, you should be wary because of the other dangers associated with such frauds. Most notably:

• Medical identity theft endangers your future medical insurances AND access to medical services you are aptly eligible for.
• You shouldn’t also be too complacent as thieves have EVOLVED into synthetic identity theft.
• Learn more about what you can do to prevent identity theft happing to you

So again, no credit report is safe… more importantly, NO ONE is safe from identity theft.

Let us know your thoughts in the comments section below!