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6 Types of Identity Thefts That Are Impacting the Digital Market
Cyberattacks that lead to identity theft have increased by 45% in 2020, on the backdrop of the COVID-19 pandemic. According to the Federal Trade Commission (FTC), US citizens reported 4.8 million identity theft and credit card fraud cases last year, but the real number is higher since not all cases are reported.
Overall, the FTC considers that identity theft alone cost the US government and American citizens a total loss of $4.5 Bn.
Why are ID theft cases increasing and how can we protect ourselves in a world where everything is online?
The pandemic created the perfect environment for scammers and fraudsters. People forced to practice social distancing had to adapt to remote working and online shopping, which exposed a wide range of vulnerabilities.
Plus, the world is still running on negative emotions (anxiety, anger, fear of the unknown) which can be easily exploited.
Right now, the best method of prevention and protection is knowledge. When you know the modus operandi of someone who tries to steal your confidential information, it’s easier to stay away from risks and practice safe online browsing.
In this spirit, have a look at some of the best identity theft examples that are successful in today’s market.
We will also talk more in detail about the top six types of ID theft schemes of which to be aware:
#1: Account Takeover
This is one of the most common types of ID theft and it happens when a criminal takes over your existing account (email, social media, online banking, and so on). They do so by breaking your password and will use the account in the most nefarious ways possible:
Harass your contacts with messages
Steal all the sensitive information they can find
Empty your bank accounts
Make purchases in your name
File claims against your insurance policies
The list is a lot longer than this, but you get the idea. Luckily, you can easily protect your accounts by using a powerful password and two-factor authentication. It’s also recommended to regularly check your accounts so you’ll notice any unusual activity.
#2: New Accounts
Cybercriminals today are smart enough to know how to dig up personal information using data leaks (from companies you’ve entrusted with your data), social media accounts, and other clever methods.
Once they have enough information, one common ID theft tactic is to open new accounts in your name. These can vary from credit card applications to rental agreements and even loans.
The bad news is that you won’t know about these accounts until there’s enough debt accumulated to get the authorities involved. However, by then it’s already too late and you’ll be left to untangle the mess.
This scenario is scary because it puts the entire blame and responsibility on the victim. Still, you can keep track of your situation by performing regular checkups of your credit report from the three major credit bureaus in the US (Experian, Equifax, and TransUnion).
#3: Online Shopping Fraud
Given that a large majority of people switched to online shopping at the start of the pandemic, eCommerce is a gold mine for cybercriminals. Basically, ill-intended actors hack user accounts, change the delivery address, and make purchases using the saved credit card information.
They do so either by hacking into websites that don’t have a solid cybersecurity system in place or by targeting customers that shop online using unsecured WiFi networks (like the ones in coffee shops, airports, or while commuting).
To make sure your online shopping is secure, avoid saving your credit card information on e-commerce sites (even though it’s more convenient) and always use secure WiFi networks or a VPN solution with good encryption.
#4: Medical ID Fraud
In this scenario, someone will use your ID to receive medical services using your health insurance. This is bad for you for multiple reasons, but here’s the summary:
Your credit will get damaged if medical bills go unpaid (because you didn’t know about them)
You will be saddled with medical bills that were not for your benefit
Your medical records will be updated with inaccurate medical information (since two or more people use it) which means doctors will get the wrong medical history whenever you need treatment. This can be life-threatening.
There’s a chance you won’t be able to qualify for life insurance.
#5: Employment ID Theft
Another method that’s extremely lucrative for cybercriminals is to sell your Social Security number and data to people who can’t get employed because of a criminal record or poor credit.
The fraudster will use your data to get employed and earn an income, which will be reported under your name.
As a result, the IRS will want to collect taxes for the extra income and may even fine you for not reporting the income you didn’t know you were earning. Plus, an increased income may put you out of reach for benefits.
Again, it’s important to check your credit report. Study the soft inquiries section and check for any data you don’t recognize.
#6: Biometric ID Theft
Devices and accounts that use fingerprints, voice, and face recognition as an authentication method can help reduce the risk of ID theft. After all, this type of data shouldn’t be that easy to replicate or steal.
However, cybercriminals proved security specialists wrong when they started targeting companies that store biometric data. Also, some of these data can be replicated using modern AI-powered technologies (voice and face, for instance).
Giving that the world is headed towards a future where biometric data will be the new username and password, these forms of attack are quite alarming. Plus, someone who can spoof your voice can easily pass as you in a phone or voice chat conversation. Biometric ID theft is a whole new level of fraud and the consequences can be even more dire than we can imagine.
At the moment, cybersecurity is already considered a national threat. Therefore, we start to see involvement from governments and tech giants, but they are still at an early stage (talks and negotiations).
Sadly, this means individuals and businesses must increase their focus on cybersecurity and always be on guard.
This article does not necessarily reflect the opinions of the editors or the management of EconoTimes