Identity theft is all over the news – and most likely you know someone who has been a victim (or you've been a victim yourself). But do you really understand the basics of what identity theft is and how it could impact you? Let's set the record straight on eight common myths about identity theft.
Myth 1: Identity theft is the same thing as credit card fraud.
Although stealing credit card information is a major problem, there are also many other forms of identity theft. As the term would suggest, identity theft is the stealing of any personally identifiable information for financial gain. This can be credit cards but it can also be things like tax returns and medical records.
In fact, according to recent Federal Trade Commission (FTC) data, government documents and benefits fraud totaled more than credit card fraud, bank fraud and loan fraud combined.
Myth 2: Identity theft only happens to adults.
You might think this myth sounds correct — after all, kids don't file taxes and most don't have credit cards. However, children are actually 35 times more likely than adults to be victims of identity theft. The fact that young children don't have credit gives criminals a longer time period between using the stolen information and the crime being discovered.
Social Security numbers are a common piece of personal information stolen from school or medical records. Information shared online can also make it easy for criminals to steal children's identities.
Myth 3: Identity theft primarily happens online.
Cybercrime (theft via social media, online banking, email spamming, etc.) continues to be a growing problem, but that doesn't mean you can let your guard down in other areas. A 2014 FTC report found that 40 percent of fraud complaints stated they were initially contacted by telephone.
One common scam involves someone claiming to be an employee of the Internal Revenue Service (IRS) calling to demand money that you owe to the IRS. Your caller ID might show that the call is from the IRS, and the person might give you a badge number or some other form of identification to "prove" he or she is an employee. Don't be fooled: The IRS will always send you a bill in the mail if you owe money and never require you to pay over the phone.
Some criminals still employ a more old-fashioned way of stealing your information, too – they might look over your shoulder as you enter your PIN at the ATM or grab your restaurant receipt off the table after you leave to get your credit card number, name and signature.
Myth 4: I'm too smart to fall for an email scam.
We've all heard about the scams: an African prince needs your help to get money out of the country via your bank account, your relative has been kidnapped and the criminals are demanding ransom money. And you think, "Who actually falls for these?" But not all scams are so ridiculous.
Some criminals have become quite adept at creating emails that look like they are from Amazon®, PayPal® or even banks. The emails will claim that your account information needs to be verified, or that you need to confirm your identity because of an unauthorized transaction. When you click the link, you'll be taken to a site that looks legitimate — but it's not. If you aren't sure about whether you can trust the email, go to the site directly (instead of clicking on the link) or call the organization directly and see if the email is valid.
Myth 5: You'll know right away if your identity is stolen.
The average number of days it takes to detect fraud in general is 34 days. The average is higher for non-card fraud (57 days) than card fraud (22 days). In that time, criminals can easily use the data they have stolen to max out existing accounts, create new accounts in your name and go on spending sprees.
Myth 6: Personal information like my birthdate is useless to criminals.
A lot of information that you share freely, such as your date of birth, phone number, ZIP code and email address, are very valuable to criminals. Think of how many accounts require you to verify your identity by entering in your birthday or your ZIP code before making a transaction.
Alone, your ZIP code might not be of much value all by itself, but criminals will take that information and post it on underground sites where they buy, sell and trade bunches of personal information. From those sites, criminals can purchase enough of your personal information to use it for fraud.
Myth 7: Your finances are the only thing affected by identity theft.
Although many criminals will use your identity to rack up charges on accounts and then try and make you pay, there are other areas in which criminals can use your identity. For example, someone claiming to be you (by using your name, address, etc. on a forged driver's license) is pulled over for a traffic violation and agrees to appear in court. When he or she doesn't show up, a warrant is issued — in your name — for an arrest.
One area of identity theft that has become more prevalent is medical identity theft. Data from stolen medical files is used to buy drugs or file false claims with insurance companies.
Myth 8: There is nothing you can do to protect yourself against identity theft.
As far as credit fraud, you can be vigilant about checking your credit card transactions weekly — glancing at your statement once a month gives the criminals plenty of time to do damage. You will also want to be sure to get your annual free credit report from annualcreditreport.com so that you can spot anything suspicious.
Be more aware of the personal information you are sharing – even with places you assume to be safe, such as your doctor's office or your employer. Give only the information you are required to share about yourself. This also applies to social media sites — take advantage of privacy settings and do not share things like your phone number or email address.
