TL;DR
Identity theft — the unauthorized use of your personal, financial, or medical information — can devastate your credit, finances, and even your freedom. Criminals exploit methods ranging from mail theft and phishing to data breaches and public Wi-Fi. Recognizing the 10 key warning signs early, such as unfamiliar accounts, unexpected bills, or Internal Revenue Service (IRS) filing conflicts, is critical to limiting damage. Proactive habits like using multi-factor authentication (MFA), shredding documents, and monitoring your credit can significantly reduce your risk. If you suspect theft, act immediately: freeze accounts, file reports with the Federal Trade Commission (FTC) and IRS, and begin the recovery process.
What is identity theft?
When someone uses your financial or personal information without authorization from you, this is identity theft. This can include your basic information, such as full name and birthday as well as more detailed data like your address, social security number (SSN), credit card information, medical accounts, and bank account details. With this information, a criminal can:
- Wrack up your credit card bills.
- Drain your bank account.
- Open new credit cards or accounts in your name.
- Steal your tax refund.
- Seek medical care as you.
- Apply for a government benefit or document.
- Impersonate you in criminal proceedings.
In 2020, there were nearly 1.5 million reports of identity theft to the FTC. Financial losses from identity theft are expected to rise again in 2021, reaching over $721 billion.
How does identity theft happen?
There are several methods that criminals use to steal your identity, ranging from low-tech means like digging through your trash to find bills and bank statements or stealing your mail to more high-tech means. The pandemic saw a surge in identity theft, potentially due to people spending more and more time in digital environments and putting more potentially sensitive information online. These are some common forms of cybercrime resulting in identity theft:
- Skimming: This involves stealing credit or debit card information, often by tampering with an automated teller machine (ATM) or electronic card reader.
- Phishing: This is using a scam email to trick people into giving more information, such as logins and passwords. The emails often appear to come from valid sources and use attachments or links to gain credentials.
- Fake websites: Online shopping scams often set up websites that look like trusted retailers to steal information, money, and potentially infect victims with malware.
- Phone scams: Scammers can offer either prizes or the threat of punishment to get victims to give out personal information. They can also spoof caller ID to make it look like the number is coming from a trusted source.
- Data breaches: Cyberattacks or unsafe security practices by companies can cause personal information to either be stolen by hackers or leaked unintentionally.
- Confidence fraud: Scammers deceive victims by impersonating another person or entity, such as the Internal Revenue Service (IRS), or build "relationships" online to convince someone to give them money and personal information.
- Public Wi-Fi: Public Wi-Fi networks are commonly insecure and therefore vulnerable to hackers, allowing cybercriminals to steal personal credentials.
Identity theft can also be done by a family member or friend stealing your information to use it without permission. Children can be victims of this, as parents use their information to open credit card accounts and commit identity fraud.
What are the dangers and long-term impact of identity theft?
It can take years to recover from identity theft. It often happens quickly and becomes invasive before you know it. The damage can be significant, and the impact can be far-reaching, including the following:
| Impact Area | Consequence |
|---|---|
| Credit | Significantly damaging your credit |
| Loans | Disqualifying you from loans |
| Government funds | Stalling or stealing your tax refund, unemployment funds, or stimulus checks |
| Employment | Costing you your job or keeping you from getting one when your credit is run |
| Finances | Draining your bank account |
| Healthcare | Rejected medical claims |
| Legal | Wrongful arrest |
How does identity theft affect victims long-term?
Victims of identity theft often have to spend a massive amount of time locked in arguments with financial institutions. They have to bear the burden of proof that their identity was indeed stolen. Nearly half of people surveyed who had their identity stolen during the pandemic reported not being able to pay their regular bills, PCMag reports.
How to know if your identity has been stolen
There are many warning signs of identity theft that can indicate that your information is being used without permission and fraudulently. The quicker you can catch on to identity theft, the better. Then, you can minimize and contain the damage. Here are 10 signs that could indicate your identity has been stolen:
| Warning Sign | What It Means |
|---|---|
| Withdrawals or purchases you did not make on your bank statements | Hackers that gain access to bank information or your debit card can steal money and make fraudulent purchases. |
| Unfamiliar accounts or loans on your credit report | This can be a sign that someone has your information and is using it to set up accounts or take out loans in your name. |
| Unexplained denial of credit | If an identity thief has stolen your information and damaged your credit without your knowledge, you might be denied a bank loan or credit card when you should not have been. |
| Unexpected bills for services or accounts you do not have | Identity thieves often set up bills in the names of their victims. Unfamiliar bills can be signs of stolen identity. |
| Drop in your credit score | This can be an indicator that someone is incurring debt on your behalf, as they are opening credit accounts and not paying them, causing your credit to take a hit. |
| Job opportunity that is withdrawn or falls through | Prospective employers often run a credit check before hiring. If you are the victim of identity theft, this can produce a red flag. |
| Collections calls for overdue accounts you do not recognize | Identity thieves often have all of your personal information, using your home address and phone number to set up fraudulent accounts that they are not paying on. This can cause bill collectors to come calling. |
| IRS saying you have already filed a tax return | Identity theft often results in stealing your social security number (SSN), which fraudsters can then use to file for, and steal, your tax return. |
| Your health insurance company saying you have reached your benefit limit | Identity theft can involve stealing your medical account information, which thieves can then use to gain medical care, causing your benefits to become maxed out. |
| Missing mail | Theft from mailboxes is still a method of gaining personal information for identity theft. If you realize you are not getting mail when you are expecting it, this can be a warning sign that someone is trying to steal your identity. |
How can you protect yourself from identity theft?
The best way to avoid the headache and financial loss from identity theft is to protect yourself from it in the first place. There are several ways to help keep your identity and personal information safe.
- Shred any document that has your personal information on it.
- Use multi-factor authentication (MFA) for login credentials, and keep your passwords strong and secure. Consider a password manager.
- Do not respond to suspicious emails or click on links or attachments. When logging into a website, ensure it is the legitimate one first
- Use best practice cybersecurity policies and security software.
- Regularly check your credit report, credit card statements, and bank accounts for suspicious activity.
- Do not overshare on social media or over digital platforms.
- Consider a credit or identity monitoring service.
- File your tax return early to beat fraudsters from doing it.
- Keep your phone locked and personal papers locked safely away.
- Do not share your login credentials or passwords with anyone, and protect them from prying eyes.
What should you do if you spot signs of identity theft?
If you think you have been a victim of identity theft, take quick action to limit the damage and recover your identity. Follow these steps:
- If you have identity theft insurance, file a claim immediately, and start to notify companies that you have been breached.
- Contact your bank and credit card companies to freeze your accounts and notify them of any fraudulent charges.
- File a report with the Federal Trade Commission (FTC) and your local police.
- Change all your passwords and credentials immediately, tighten up your security practices, and keep an eye on all of your bills.
- Sign up for a credit monitoring service.
- Report fraud to the IRS, and start the identity recovery process with them.
Recovering your identity after it has been stolen can take some work, but it is possible with these tips.
Frequently asked questions
What types of personal information do identity thieves typically target?
Identity thieves seek a wide range of personal data, including full names, birthdays, addresses, Social Security numbers, credit card details, medical accounts, and bank account information. Armed with these details, criminals can open fraudulent accounts, drain funds, obtain medical care under a victim's name, and even impersonate victims in legal proceedings.
How can I tell if someone has stolen my identity before major damage occurs?
Watch for early warning signs such as unfamiliar accounts or loans appearing on your credit report, unexpected bills for services you never signed up for, a sudden unexplained drop in your credit score, and debt collection calls for accounts you don't recognize. Catching these indicators early gives you the best chance to minimize and contain the damage.
Can identity theft happen through everyday activities like checking mail or using public Wi-Fi?
Yes. Criminals employ both low-tech and high-tech methods — from physically stealing mail out of mailboxes to intercepting data transmitted over unsecured public Wi-Fi networks. No single channel is exclusively risky; thieves adapt their approach to whatever vulnerability is available.
What immediate steps should I take if I suspect my identity has been stolen?
Speed is critical. Begin by freezing your financial accounts and alerting your bank and credit card companies to any fraudulent charges, then formally document the theft by filing reports with both the FTC and local police. Simultaneously, reset all credentials, enroll in credit monitoring, and contact the IRS to protect your tax identity and begin the official recovery process.
Can identity theft affect my employment or medical benefits?
Yes. A damaged credit score resulting from identity theft can cost you a job opportunity, since prospective employers often run credit checks before hiring. Additionally, a thief using your medical account information can exhaust your health insurance benefit limits, leaving you without coverage.
Is identity theft only committed by strangers, or can it happen closer to home?
Not all identity theft comes from anonymous cybercriminals. Trusted individuals — including family members — can misuse personal information, and children are particularly vulnerable when a parent exploits their clean credit history to open fraudulent accounts.
References
Consumer Sentinel Network Data Book 2020. (February 2021). Federal Trade Commission (FTC).
Facts + Statistics: Identity Theft and Cybercrime. (2021). Insurance Information Institute (III).
The Pandemic Made Life Even Worse for Identity-Theft Victims. (May 2021). PCMag.
Report to Help Fight Fraud. Federal Trade Commission (FTC).
