identity theft

Identity theft also widely referred to as identity fraud is the expression used to classify any illicit situation where an individual’s data is obtained and utilized for any wrong purpose such as fraud, deception for the furtherance of the economic position of the criminal, and identity thief. The IRS explains the term as it relates to tax-identity to mean when someone’s personal information, especially the social security has been compromised and is being used to file for a fraudulent refund of a tax return. The IRS goes further to advise victims to ensure that they should continue to pay their taxes even if it involves filing a paper return.

The instances of Identity theft in the United States have reached an alarmingly high rate, as it has been recorded that it has affected 1 out of every 20 Americans and this has resulted in losses of over $17 billion as of 2019 with the numbers increasing at rocket speed in 2020. Once gotten, the identity thief may utilize the information obtained to make transactions such as tax filing, credit application, medical insurance services. These acts can damage an individual’s financial credibility and cause huge financial losses.

The Different Kinds of Identity Theft

There are a great many varieties of Identity theft including account takeover fraud, debit or credit card fraud, driver’s license, and mail identity theft, internet shopping frauds, social security number fraud, child identity fraud, tax identity fraud amongst others. However, they may all be grouped into four broad categories:

  • The unsanctioned use of a debit or credit card by an identity thief who obtains the credit card information illegally and uses it to make purchases
  • Accounts taken over by fraudsters who have obtained access to an individual’s account, begin to make changes and make use of the account for transactions and movement of funds. The accounts usually at risk include savings accounts and checking accounts. However any account linked to a credit card, electronic devices and investments may still be penetrated.
  • Using an individual’s details to create credit or loan accounts that are connected to the victim’s identity and assists to destroy the victim’s financial worthiness.
  • Government identification, job, or tax fraud: the identity of the individual is used in this case to obtain benefits from the government, file fraudulent tax returns, create a false identification, etc. This form of identity theft gained traction and became the criminal’s favorite in 2020 possibly due to the rise in covid-19 benefits. 

How Identity Theft Occurs

There are several ways criminals utilize in carrying out their identity theft, some of which are reproduced here to assist potential victims in avoiding these dangers that accompany identity theft.

  • Eavesdropping on the conversation or a transaction of the victim, this is to gain some personal details such as credit card number.
  • When individuals receive bank information in their mailbox and do not adequately discard the said document after use, criminals may obtain this information and use them for their illicit activities.
  • The use of spam emails requesting personal details in return for large benefits which are usually unfulfilled but allows access through technology to scoop large personal information from your devices.
  • The use of public internet devices also gives identity thieves an inroad into the individual’s personal space.
  • The occurrence of a data breach in government agencies leads to data availability in favor of the criminal.
  • Credit or Debit cards that are missing or have been stolen may be an enticing avenue for criminals to obtain a person’s identity information.

How to Know When You Have Been a Victim of Identity Theft

Potentially everyone who carries out some form of an online transaction can fall victim to the hands of the perpetrators of these criminal actions, however, children and senior citizens are at even greater risk. Below are some of the ways to know if a person has fallen victim to identity theft:

  • When an individual receives a denial to their application for a loan, it is enough reason to arouse the suspicion that the individual’s identity has been stolen
  • When a bill for an item not purchased is received, such circumstance is synonymous with identity theft fraud
  • There could also be debt collection calls for accounts that were not created by the victim which is a sure sign that a person’s identity has been stolen
  • Information from the IRS indicating a tax return which was filed suspiciously 
  • Notification of identical social security number
  • Unrequested receipt of a mail tax transcript 
  • Notice of the creation of an online account using the details of a victim
  • Receipt of an assigned Employer Identification Number when the victim didn’t request for any.

These are among the obvious tell-tale signs that a person’s identity has been stolen. Yet they could be prevented.

Avoiding being a victim of Identity Theft

Individuals may avoid falling victim to identity thieves by doing the following:

  • The use of security software that is consistently updated is advised  
  • Personal information should be treated securely and should not be left indiscriminately 
  • The use of really difficult passwords should be encouraged
  • Personal information should only be shared on secured and encrypted websites; individuals should be on the lookout for HTTPS websites
  • The use of two-factor or multi-factor authentication should be vastly encouraged.
  • Files should be backed up securely 
  • Keep your Social Security Number very secure
  • Be on the lookout for unauthorized transactions 
  • When making use of public wifi, the firewall should be enabled and updated to protect the device.

What to do if you become a victim of Identity theft

When an individual has fallen victim to the criminals, they may quickly act to forestall any losses by doing the following:

  • Individuals may report the ID theft and obtain an ID theft report by creating an account online. This will help in fixing the problem and guiding you through the process. Reports may be made to the local police, the FTC, and also a fraud alert can be requested.
  • For Tax-related identity theft, individuals may report to IRS and follow the laid down process by the IRS
  • For data breaches and the process of reporting, the IRS also provides the process
  • For a person assigned an unsolicited Employment Identification Number, it is important to ascertain why an EIN was assigned to you in the first place.