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How to detect the signs of identity theft?

It turns out that Dwight Schrute of The Office was right. Identity theft is no joke, and millions of families experience it every year. In 2021, 42 million American consumers were victims of identity fraud, resulting in a total loss of $52 billion[1]†

Fortunately, detecting identity theft early can greatly reduce the damage from exposing your information. Here’s what you need to know about detecting signs of identity theft, plus some of the best ways to prevent it.

How does identity theft happen?

Identity theft refers to any incident where a third party steals and uses your personal information for financial gain. While there are numerous ways thieves can get their hands on your information, they generally fall into one of two categories:

Traditional Identity Theft: These tactics involve stealing your data physically or digitally without contacting you directly. If you’ve ever been a victim, you may never find out how the thief got your information. Identity Theft Scams: This approach involves contacting you directly and tricking you into revealing sensitive information. As a result, you need to know when the thief stole from you and what details they have.

Traditional strategies include stealing documents from your mailbox, trash or wallet, taking advantage of data leaks, and attaching skimmers to electronic card readers that record your payment details when you swipe.

Identity theft scams often involve contacting you by phone, email or social media and getting scammed. They may try to convince you to give up your information by promising you a prize, threatening you with arrest, or pretending to be an attractive person and showing romantic interest in you.

🛑 This is far from a comprehensive list of ways thieves can steal your information. It’s impossible to learn all the permutations of fraud, but it’s worth checking out the most common ones to better spot the pattern.

Early Signs of Identity Theft

Identity theft can take a long time to be noticed if you don’t proactively look for it. Unfortunately, every day the problem goes undetected, the more likely the damage is significant and it will take longer to fix the problem.

As a result, you need to learn the most common signs of identity theft in order to detect the problem as early as possible. Here are some of the major red flags.

Unauthorized Account Activity

One of the ways people often discover identity theft is by finding transactions they don’t recognize on their credit card or bank account statements. That’s a sign that someone has accessed your account and is using it to make unauthorized purchases or withdraw money.

⚠️ The amounts will not necessarily be significant in the beginning. Thieves often start with smaller purchases to test the accuracy of their information and confirm that they can complete transactions with your account.

Unknown accounts in credit reports

Another way people often discover that they have suffered from identity theft is by finding strange accounts in their credit reports. That’s because one of the most popular ways thieves take advantage of your personal information is to create credit accounts in your name.

For example, they can steal your information by searching your trash and finding one of your credit card statements, then use it to request a new card. They would then get the most out of the account and disappear, leaving you to settle the bill.

Missing bills

Whether you receive your monthly bills by email or post, identity thieves who have access to your bills can redirect your correspondence to an address they have access to. If you haven’t received a copy of one or more bills in the past few months, it could indicate that someone is trying to steal your identity.

If thieves get their hands on your accounts, they can use the information in them to commit identity theft. Alternatively, they can try to hide their own activities while collecting charges from the compromised account.

Unknown bills or correspondence

I don’t consider this an “early” sign of identity theft, but it’s worth mentioning nonetheless. If you get bills for expenses you don’t recognize, unexpected calls from collection agencies, or letters about unknown activities, it’s very likely that someone has stolen your identity.

Keep in mind that there are many ways this can manifest itself, including some that you may not expect. For example, thieves can use your information to claim unemployment benefits, get health care services billed to you, or open utility services.

Unfortunately, this often means that the problem has progressed significantly. Therefore, you should never ignore a letter or bill that you do not recognize because you believe it is simply a mistake or mix-up.

Inability to file your tax return

One of the increasingly common ways identity thieves take advantage of stolen information is by filing fraudulent tax returns and stealing refunds. Many people find out about this when they file their returns and get rejected because someone has already filed one using their Social Security number.

Alternatively, you may receive unexpected correspondence from the Internal Revenue Service (IRS). That could be a letter asking about a potentially fraudulent return, a tax statement you didn’t ask for, or a notification that someone has created an online account with the IRS in your name.

📗 Learn more: Filing your tax return can be intimidating, especially if it’s your first time. If you need help, check out our comprehensive guide: Filing your tax return for the first time? Here’s what to do!

Company data breaches

Unfortunately, even if you do everything you need to do to protect your identity, you are not the only party identity thieves who can target stealing your information. Your data is a hot item and companies keep as much of it as possible these days.

If a company experiences a breach of your data, you could be exposed through no fault of your own. Organizations are required by law to notify you of these incidents. If you receive a report that your information has been compromised, it is definitely a sign that you need to take action to prevent victimization.

How to check for identity theft

You should always do your best to prevent identity theft before it happens, but sometimes it’s unavoidable. Therefore, you should regularly check if you have been a victim of identity theft.

Given the signs of identity theft I mentioned above, some of the best ways to check for identity theft are:

Check your bank account and credit card statements for unknown activity Check your credit reports for trade lines you don’t recognize Check your correspondence to make sure nothing is missing or unexpected Watch for data breaches at companies that may have your data

It’s not a substitute for looking for signs of identity theft yourself, but identity theft monitoring services can make spotting potential red flags easier. After all, it is unlikely that you will be checking all of the above issues on a daily basis.

However, these services are usually not free and have limitations, including the inability to detect all the ways your identity could be compromised. As a result, while they can be helpful in some circumstances, they are not beneficial for everyone.

Prevent identity theft?

Unfortunately, nothing you do can guarantee that you will not become a victim of identity theft. Because of this, you should always be on the lookout for signs that someone has stolen your identity.

However, there are ways to significantly reduce the chances of someone getting their hands on your personal information. Here are some best practices you should consider.

Secure your online activities

With the world becoming more digital, it’s more important than ever that you learn to protect yourself while working online. Nothing is ever rock solid, but you can significantly boost your defenses by taking the following steps:

Use strong, unique passwords for every account and websiteEnable 2-step verification with your phone or an authentication appUse antivirus software and keep it up-to-dateLearn not to click on links that may be unsafeMonitor your social media data and privacy settingsAvoid public wifi or use a virtual private network

Again, it is impossible to exclude the risk of someone stealing your data online while taking advantage of all the internet offers. However, you can reduce your vulnerability with these precautions. If you haven’t in a while, spend some time brushing up on internet safety.

Practice good habits in the real world

Unfortunately, there are just as many opportunities for thieves to steal from you in person as there are online. Here are some ways you can minimize your vulnerability as much as possible:

Sign up for electronic statements of accountSecure your mailbox with a mailbox or drop-in mailboxBuy a paper shredder and shred documents before you throw them awayAvoid taking sensitive data on your personBuy a safe to store documents such as passports in your homeCheck for skimming devices or use mobile payment apps instead of cards

It is difficult to delete all physical copies of your sensitive information. After all, you need hard copies of things like your driver’s license and passport, and most people don’t want to get rid of their credit and debit cards. However, reducing your reliance on physical data will often help protect you from identity theft.

Cultivate a skeptical mindset

Taking steps to protect your personal information in the physical and digital worlds is essential to minimize your exposure to identity theft, but it is not enough. It does nothing to protect one of the most vulnerable points in your security: yourself.

As security against identity theft improves, thieves are increasingly cheating consumers directly instead of hacking into their accounts or digging through their trash for information.

Educating yourself on the tactics they use is helpful, but you will never be able to learn them all. There are already countless strategies and scammers are coming up with more every day.

As a result, your best defense against these scammers is to build a habit of being suspicious when someone wants to access your information. It should be an automatic reflex, even when you’re dealing with someone you know for sure is legit.

📗Learn More: As the old saying goes, an ounce of prevention is worth a pound of cure. Check out our favorite tips to prevent identity theft before it happens: 12 essential steps to prevent identity theft.

Take action if you see any signs of identity theft

If you’ve seen warning signs that someone has stolen your identity, take immediate action. Remember that identity theft issues usually take longer and cost more to resolve the longer they are left unaddressed.

For help with the recovery process, visit IdentityTheft.gov. It’s a federal resource that allows you to report the details of your incident to the appropriate authorities, then create a personalized recovery plan and guide you every step of the way.

This post How to detect the signs of identity theft? was original published at “https://finmasters.com/signs-of-identity-theft/”

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