Recognizing the Signs of Identity Theft

How to Protect Yourself

A recent report states that approximately 12 million people in the U.S., alone, have been victims of criminals practicing identity theft.

Who May Be Affected

Identity theft is a form of fraud that can affect any person with a Social Security Number, or for that matter, anyone who used to have a SSN, such as those who have died. It is even possible for newborns to be victims of identity theft, too. Within a matter of days following the birth of a child, the parents generally sign documentation for their bouncing baby to get a SSN, and within weeks, it is issued.

At this point, not only do the parents have the number, so does the hospital, doctor’s offices, insurance companies, the IRS, and the Social Security Administration.

Fast forward a few years, and the child’s school has it; their church groups and sporting teams may have it. In a few more years, the child will get their driver’s license, their first job, and possibly go to college. All of these entities have the SSN, too. Now, think about all of the people who have access to this information, and that is the number of people who have access to that child’s identity.

As this child grows into adulthood, he or she will apply for credit cards, mortgages, and get new jobs, and in every instance, the Social Security Number is used. As this person reaches the end of their life and eventually pass away, their SSN is still usable by identity thieves for 4 months to almost a year.

Warning Signs of a Stolen Identity

In many cases, people only find out that they are a victim of identity theft when they get denied for credit.

You might find yourself in this situation, too. You might be ready to purchase your first home or a new car and find out that your credit is denied due to open accounts that you never opened, nor authorized. It happens every day.

Some people even learn that they are a victim of identity theft when they try to find work and are denied a potential job due to their credit history.

Many companies use credit history as a way to determine if a potential employee is financially responsible, but in the case of an identity theft victim, it might be impossible to tell because those charges weren’t made by them. The employer, however, doesn’t necessarily care, and they reject the applicant.

It is also possible for victims of identity theft to be denied admission to school due to their credit history, or even denied the ability to get a loan for college, because there are already accounts in a person’s name. Sometimes parents of children who are applying for financial aid are also found to be identity theft victims because they are denied after applying for a loan to pay the child’s tuition.

People also find out that they are victims of identity theft when they start getting calls from debt collectors about services or goods that they never purchased. In a worst case scenario, these victims can even get arrested or sued due to the actions of the identity thief.

The Warning Signs of Identity Theft in Children

Most parents don’t realize that their children are victims of identity theft until they get a warning sign. For instance, if a person gets a call that their three-year-old bought a new BMW and has defaulted on the vehicle loan, that’s a sign that the child is a victim.

Other parents might not find out that their child is an identity theft victim until the cops come to the door enquiring about crimes done by a two-year-old.

Not outlandish enough? There have also been situations where a parent goes to register their child for school, only to find out there is another child at the school with not only the same name, but also the same SSN. This often happens when a child or family is not a citizen of the U.S. There have been studies that people who are victims of identity theft used for illegal immigrants might have 30 or more illegal people in the country with their SSN.

The Effect of Identity Theft on a Person’s Life

The effect of the loss of money on an identity theft victim is bad enough, but there is also a loss of time, too. Research shows that it can take as much as 600 hours to completely rectify, which is the equivalent of about a month of time.

However, there are also studies that show up to 25 percent of victims of identity theft never fully restore their identity, and they must deal with the consequences for the rest of their lives. This is especially scary when a child’s identity is stolen, as they can struggle every step of the way. For all victims of identity theft, their financial life could be ruined, their marriages and relationships strained, their jobs lost, and they must deal with more emotional distress than anyone should have to deal with.

The Most Common Ways to Steal an Identity

There are a number of ways that an identity thief uses to steal an identity. Criminals might steal identity by going through the garbage, stealing mail, or even breaking into a person’s house and going through their personal files.

The internet is another method for stealing someone’s identity. Criminals can hack into databases, for instance, and these contain Social Security Numbers.

There are also studies that show that as many as 70 percent of all instances of identity theft occurs from the inside, which means the thief has access the personal information of the victim. For instance, a human resources manager of a company has access to all of this information, as does their assistant. There is really no stopping them from taking the information from an employee file, including the Social Security Number, and using it for their own personal gain.

The Potential for Identity Theft in Everyday Life

We often put ourselves in situations where we don’t even realize we are putting ourselves in danger. For instance, anytime you use your credit card at a grocery store or gas station, you are giving your information to someone who could steal it at any time. Credit card numbers are easily copied, and they can even be encrypted onto a dummy card, and used just as a real credit card.

Tax scams are also a method that criminals use to get steal the identity of victims. The IRS is taking this very seriously and partnering with other entities to create a more secure system. Currently, the IRS is collecting information on these scams that they can use to provide better protection of taxpayers. All taxpayers have certain rights, and none of us should be afraid to provide money or personal information to others over the phone. In other words, a simple phone call should not be enough to ruin someone’s life.

The IRS and the Dirty Dozen

The IRS also has an annual “Dirty Dozen” list, where it ranks modern tax scams and reminds taxpayers of the importance to use caution when filing taxes in order to protect themselves.

It should be no surprise that identity theft tops the “Dirty Dozen” list. This is, of course, a response to the rising instances of identity theft across the country. The IRS is working on a strategy focused on detecting, preventing, and ultimately resolving all identity theft cases as quickly as possible. On top of this, the IRS has increased the number of internal reviews it is doing, and has been focused on spotting false tax returns before refunds are sent, which will help identity theft victims of refund schemes.

Phishing is another scam that is found on the “Dirty Dozen” list. This scam is done through either a fake website or email that seems legitimate. The goal of the scam is to lure a victim to a certain website, and then trick them into providing financial and personal information. When the victim puts the information into the website, the criminal is free to take it.

Another tax scam is the preparer fraud. It is estimated that about 60 percent of people use the services of a tax professional to prepare their tax return. Though the vast majority of these preparers do their job with honesty, there are some out there each year that will steal the personal information of their customers.

A final tax scam is the false form 1099 scams. In this case, a criminal will file a return, such as a 1099, in order to justify a claim for a false refund that has also been filed. In this case, an individual will make these claims based on the false theory that the government maintains hidden accounts for citizens, and that a taxpayer can get access to one of these accounts by filing a 1099 with the IRS.

Protecting Yourself From Scams

Here are some tried and true methods for protecting yourself from these scams:

  • Protect Your Info: Make sure to secure any personal information that arrives by mail. Do this by getting, buying, installing a locking mailbox, locking the information in a filing cabinet, or store them in a safe.
  • Shred Non-Important Paperwork: Talk with your accountant to find out what documents you need, and which you don’t. Shred those you don’t in a cross-cut shredder.
  • Go Paperless When You Can: You should also opt to go paperless when you can. The fewer papers you have, the fewer chances someone has to steal your identity.
  • File Taxes Early: If possible, try to file your taxes as early as possible. The earlier a person files, the easier it is to stop any attempt to file if someone filing taxes using your information. Also, make sure that you are only using the services of a trusted, local accountant that you like and know.
  • Protect Your Computer: The OS on your computer should constantly be updated with the latest patches. You should also have a comprehensive software for security that provides firewall, antivirus, antispam, and antiphishing capabilities.
  • Stay Updated: Keep your eyes open to anything suspicious with your accounts or your computer. You could be the newest victim of identity theft.