How to Protect Your Data From Identity Theft Rings

A couple making sure they have identity protection

Ariel Skelley / Getty Images 

You probably don’t realize it, but there is at least one identity theft ring in your state operating right now. These rings contribute to victimizing more than 10 million people each year.

One recent report showed 11 men and women arrested for stealing the identities of victims and then opening credit cards in their names without their knowledge. There were more than 70 victims. Most of these were opened in the victims’ names, and then the charges were made by “authorized buyers” that were on the account. Law enforcement found throughout their investigation that most of the victims had refinanced or applied for credit, and an employee of the financial institution was often to blame.

In another instance, 45 people became victims of an identity theft scam that centered around loans. The criminals had obtained information on the victims, including their dates of birth, names, Social Security numbers, and more. These people simply gathered information from their victims, and then went online and took out a loan in someone else’s name. Then, they opened a bank account in their own name and wired the money to that account.

Consumers have to:

  • Protect themselves from an account takeover by constantly monitoring their accounts, protecting passwords, and refuting unauthorized charges.
  • Protect themselves by locking down credit with either an identity theft prevention service or credit freeze.
  • Protect their mobile and desktop devices with antispyware, antivirus, antiphishing, and firewalls.

Until we have smart systems in place, identity theft will continue to affect us.

It Is Critical to Protect Your Data on Your Digital Devices

When your devices are hacked or lost, your data will become exposed. Not only is this difficult to deal with, but you could also become a victim of identity theft, too. This means you could waste a lot of time trying to rectify things, you could also lose a lot of money. McAfee recently did a study where it found that people, on average, have approximately $35,000 worth of data on their digital devices when you consider documents, pictures, music, movies, apps, and more. This further demonstrates why you must protect your data.

Other studies show that when someone becomes a victim of identity theft, it can take up to 600 hours of their time to rectify, so when you have a number of breaches, you might waste several months or even years of time dealing with the repercussions. There are also studies that show that up to 25 percent of people who have become victims of identity theft never can fully restore their identity. These are the people who deal with identity theft for the rest of their lives.

For many, the consequences of identity theft mean they could lose their job, ruin their finances, wreck their marriage, or cause emotional distress. It is like a plague that keeps recurring.

What are some effective ways to protect yourself?

  • Use encryption when storing data on your devices. Things like credit card numbers, passwords, driver’s license numbers, and tax statements can all be used to steal an identity.
  • Use caution before posting information online. Remember, what you post stays there forever. Additionally, hackers are very smart when it comes to digging up information, and can use something as simple as the name of your dog or sister to get information about you.
  • Create strong passwords. The first line of defense against hackers is to create passwords that they cannot guess. Make them around 10 characters in length, use both upper and lower case letters, and add symbols and numbers.

Reviewing Your Credit Card Statements, Financial Statements, and Credit Reports

At a minimum, you should review your credit report every three to six months. If you have chosen to get identity theft protection, which might include credit monitoring, you may be able to review your reports at least twice a year. If you have access to unlimited credit reports, it is best to do this bi-monthly.

Credit cards do offer a small amount of protection, as they have a zero liability policy as long as you refute the charge within 60 days. With a debit card, however, the money that has been stolen is difficult to recover.

Federal laws limit a person’s liability to $50 when credit card fraud occurs, as long as they dispute the charge within that 60-day time frame. If you let it pass, your liability could be the entire balance of the card. With a debit card, however, you might not even realize it has been compromised until the card is declined or a check bounces. Plus, even if you do recover the funds, the thief still has all of your information, and he or she can simply start all over again…unless you cancel your account, of course.

To maintain this $50 liability, any victim of debit card fraud must notify their bank within two days of the transaction. After that, you would be liable for up to $500. 

All of this falls under the rules in Federal Regulation E. Basically, this says that liability for unauthorized charges is determined based on the following:

  1. The consumer must give timely notice. If you do not notify your bank within two business days after seeing the loss or theft, your liability cannot exceed $50.
  2. If the consumer does not give timely notice, within two business days, the liability will not exceed $500.

Protecting Yourself From New Account Fraud

You can protect yourself from new account fraud by following the advice found in these posts. This includes taking measures that protect your computers, mobile devices, and identities, such as fraud alerts and credit freezes.

You also have to consider purchasing identity theft protection, which will monitor your credit for checks or inquiries that are made by lenders before (or after) opening a new account. Make sure that the chosen provider also takes time to monitor the internet for information that identity thieves might use to open an account in your name.

Without this look into your credit activity, you won’t know if a new account has been opened until it’s too late.

Protecting Yourself From Account Takeover Fraud

Victims of account takeover often realize it when they discover that there are unauthorized charges on their monthly financial statements, or they notice that funds have been depleted from their accounts. So, you must check your credit card and financial statements frequently and monitor all of your credit reports. Follow the advice here, including protecting both your identity and your computers, such as fraud alerts and credit freezes. Also, you should consider investing in an identity theft protection service.

Protecting Yourself From Debit or Credit Card Fraud

Debit and credit card fraud is a form of account takeover, so you must take steps to protect yourself by doing things such as reviewing online statements and refuting any unauthorized charges as soon as possible. Also, do the following:

  • Avoid using a debit card when making everyday purchases.
  • Use credit cards if you can and check the charges frequently.
  • Refute any unauthorized charges immediately. Remember, you only have two days with debit cards.
  • Follow the tips given on this site for protecting yourself when shopping online and protecting your computer and mobile devices.

Protecting Yourself From Affinity Fraud

The SEC, or Securities and Exchange Commission, offers the following recommendations for protecting yourself from affinity fraud:

  • Look into everything, no matter how much you trust the one who brings any investment opportunity to you. Never make any investment made solely on the recommendation of a person from an organization, ethnic or religious group that you belong to. Instead, make sure to take the time to investigate each opportunity fully, and check how truthful each statement you are told about an investment truly is. Keep in mind that the person who is telling you about the investment might have been fooled into believing this is a great investment when it really isn’t.
  • Don’t fall for any investment that sounds too good to be true or that offers a guaranteed return. Remember, if it seems too good to be true, it is likely, not true at all. Also, be leery of any investment that claims to be risk-free. It is extremely rare to find a risk-free investment. The greater the return, the riskier an investment is, so the promise of high and fast profits with no risk is a classic sign of fraud.
  • Be very skeptical of any investment that is not given to you in writing. Fraudsters will often avoid putting any investment information in writing, but legitimate investment opportunities are always in writing. Also, avoid investments if someone tells you they do not have time to reduce the investment in writing. You should also be suspicious if someone tells you that you should keep the opportunity confidential.
  • Do not feel pressured or rushed to buy an investment. Instead, take time to think about it and investigate the investment. Just because a person you know made money, or even claims to have made some with the investment, it doesn’t mean that you also will. You should also be skeptical of investments that claim they are ‘once-in-a-lifetime’ opportunity. This is particularly the case when the recommendation is based on confidential or ‘inside’ information.

The bad guys are using the internet more than ever to target potential victims through spam emails. If you get an email from someone you do not know that contains an investment opportunity, pass it up and forward the email to the SEC at

Most people do not have the resources, time, or knowledge to protect their identity from scammers. It is impossible to prevent identity theft or fraud, which is why you must take steps to protect yourself.