To understand the magnitude of the identity theft crisis in the United States, consider these three numbers: 50, 15 and 5. These numbers represent the annual financial cost of identity theft in America ($50 billion), the number of individuals directly affected by identity theft each year (15 million) and the average loss in each case of identity theft ($5,000). In fact, a Justice Department report released in December 2013 revealed that over 34 million Americans have experienced some type of identity theft, an astonishing 14 percent of all citizens over the age of 16.
Individual cases of identity theft pale in comparison to the potential for loss from mass data breaches in some of the nation's largest corporations. The year 2014 opened with the massive data hack at Target, in which 40 million debit and credit card numbers were compromised. Shortly after, the state of New York announced that the personal records of 22.8 million New Yorkers had been compromised. August 2014 was a bang-up month for cybertheft, with Community Health Systems and UPS both reporting massive data theft. In January 2015, health insurer Anthem announced that up to 18.8 million consumer records had been compromised. The problem continues to grow.
Common Identity Theft Scams
The most common types of identity theft fall into two categories: technological and non-technological. Non-technological identity theft schemes include dumpster diving and mail theft. Basically, criminals search through mailboxes and trash cans to steal credit card bills, bank statements or any documents that contain personal information. Social engineering, however, is the most common identity theft scam played against seniors. These scams involve calling older people and convincing them that there is a problem with their Medicare or Social Security payment and they need more information to restore benefits, thus convincing them to give up sensitive personal data.
Technological Identity Theft Schemes
There are many ways thieves use technology to steal personal information. Phishing is the most common type of identity theft that occurs on the internet. In some cases, the identity thief creates a website that closely mirrors a legitimate business's website and tampers with the domain name or host file to redirect visitors to the fake site. The victim believes they are on the website of a trusted business and is willing to enter their personal information, which the identity thieves steal.
Other common identity thief scams include disguising malware in an email. These emails appear to be from a respected company such as Norton and prompt the recipient to install an "antivirus" program that actually installs malware or a program that records keystrokes and the sites the victim visits on the internet in order to steal personal information and financial data.
How to Protect Yourself
There are several common-sense steps you can take to prevent identity theft. Enroll in paperless billing whenever possible with your credit cards, utilities, mortgages and bank accounts. This protects you against thieves who steal your physical documents. Also, be on guard against shoulder surfers, those people who get too close to you when you use an ATM or use your bank debit card to pay for a purchase in a store. Don't be afraid to ask someone to step back or offer to let him or her go first if the situation feels suspicious. Enroll in an identity theft protection service to alert you to technological schemes.
Today, the question is not "is identity theft common?" Nearly 1 in 5 individuals will be an identity theft victim. The question is how you can protect yourself from identity theft and get early notification to mitigate the damage of a stolen identity.