Identity Fraud: 9 Consumer Scams (and How to Stop Them)
Remote work e-commerce activities and advanced breaching capabilities that are at an all-time high There is an unstoppable storm in the making. Identity fraud won’t disappear anytime in the near future.
Check out the nine most common kinds of fraud involving your identity, their warning signs, as well as some management tips. So, you can lessen the chances of becoming a victim to these frauds.
What Is Identity Fraud?
Identity fraud occurs when someone is able to use stolen personal data to deceive people, companies or businesses typically for the purpose of gaining financial gain or pursuing criminal purposes. Unauthorized use of sensitive information, such as credit cards and bank accounts as well as passports, can create serious difficulties for the victim. This can affect their credit score, finances, reputation and assets.
Based on the Federal Trade Commission (FTC), consumers filed more than 2.1 million fraud complaints in 2020. The total loss was $3.3 billion, which is nearly twice the $1.8 billion lost due to fraud in the year 2019.
The lockdowns that caused the closing of brick-and-mortar shops and an increase in online shopping has led to millions of shoppers coming online. This includes many older customers and others who aren’t cybersecurity technologically proficient as digital natives. The issue of identity fraud is increasing.
What Is the Difference Between Identity Theft and Identity Fraud?
Identity theft happens the theft of the personal details of another such as their passport, credit card or property titles.
Identity fraud occurs when someone uses the identity of someone else to make money. They can do this via fraud or buying goods with stolen data.
The two terms are connected, since identity theft usually leads into identity fraud. The criminal usually has a plan to commit fraud in the event that they steal personal information from their victims.
There are many ways thieves can take your identity, ranging from traditional methods like the common theft of your wallet to cold calls , to obtaining your personal information through fraud or data breaches.
9 Types of Identity Fraud to Watch Out For in 2022
If thieves gain access to your personal information, they may cause diverse types of harm. They may impact the credit rating of your finances, reputation of your business and even your livelihood. You could even be facing criminal charges and even court when fraudsters use your personal information to commit illegal acts.
Here are nine forms of identity fraud you need to be aware of in 2022:
Account Takeover Fraud
Account takeover fraud occurs when someone has access to your accounts without your permission. Once inside, a criminal has the right to conduct transactions and withdraw money from the account. 28 percent of customers say they’d stop doing business at a store in the event that their online account is damaged in this manner.
Online Shopping Fraud
Shopify said that just 13.6 percent of sales were from online purchases in the year 2019. The effects of the pandemic resulted in an increase in online shopping. By 2024, online shopping will make up nearly 22% of all retail sales. As this increases, there are more opportunities for fraudsters.
Fraudsters employ fake websites, fake gift cards, messages and emails that resemble phishing to trick people into divulging their credit card details. One of the most common examples is the delivery scam that is fake. Criminals post messages on delivery issues disguised as reliable couriers — such as UPS and FedEx -in an attempt to fool people into clicking on an untrue link or sharing their information.
Card Identity Fraud
One of the most obvious forms that fraud can be committed is when someone makes use of your credit or debit cards without authorization. This could include a pickpocket in a subway or a family or friend member who has their hands in your purse. Once they have access to the necessary details, they will be able to buy items under your name or conduct large transactions from your account.
Seniors are more at threat of identity fraud because they aren’t as tech-savvy and reside alone, leaving them vulnerable to scams. Based on the FTC, consumers aged 80 and above lose the most money due to fraudulent activities than any other age group.
One type of fraud involving identity is known as the grandparent scam’, in which criminals pose as the grandchild of a victim on a phone call to an elderly person. The fraudsters will attempt to get the victim to commit making a payment or sharing card information in order to solve an urgent issue.
Social Security Number Identity Theft
The Social Security number (SSN) is the primary identification number for you. If you lose that, you’re at risk of losing everything. There were more than 147 million SSNs that were exposed in the event that hackers hacked Equifax in the year 2017 and created anxiety. If attackers gain an access point to your SSN it is possible for them to access your bank accounts, credit lines, taxes, tax refunds, medical treatment and much more.
However, it’s not an incident to compromise your data to forfeit your SSN. Criminals can get what they want from you by grabbing your wallet, searching through your trash or sending fake emails, or perhaps hearing you over the phone.
Medical Identity Theft
Identity theft in the medical field occurs when someone uses your personal information, for example, an SSN or Medicare numbers or SSN to obtain medical treatment or to file claims. If you’re a victim of identity theft it is possible to be charged for medical care and prescriptions that you haven’t received.
In the month of January 2022, the Florida hospital was warned about identity theft for medical patients due to a breach of data. The breach affected 1.3 million records of staff and patients.
Biometric ID Theft
Unfortunately, we live in a day and age when the use of passwords as well as Two-factor authentication don’t suffice to keep our accounts and identities secure. cybersecurity technologically Biometric authentication takes this one step further, as it confirms the identity of the user through fingerprints, facial recognition, or voice.
However, criminals won’t give up easily, considering that identity theft using biometrics is becoming a bigger problem due to the editing of videos as well as artificial intelligence. In 2020, a risk factor group employed deep fake technology to trick the Hong Kong bank manager into believing that he was speaking to a director of a company that he knew. The manager was convinced and was able to transfer 35 million.
This technology’s capabilities are the cause for concern. The GitHub project known as MockingBird claims that it can clone an individual voice in less than five seconds. It then allows users to produce speech using the voice clone in real-time. Although there isn’t much information about the project, the possibility alone is a serious risk in the form of thefts that you can’t ignore.
5 Signs of Identity Fraud
Being aware of what to look for is only half the battle of the fight against fraud. Here are five indicators to look out for:
Unfamiliar Transactions on Financial Accounts
If you see unusual or unusual transactions in your banking or credit statement, it could be an indication that you are being targeted by identity theft. A small mistake should be investigated because fraudsters typically check accounts with small amounts prior to making larger transfers.
New Bills or Missing Bills
An identity theft thief might alter the address of the victim to conceal crucial information. If you find that some bills aren’t being delivered, it is important to check with the service providers to verify that there is no shady activity taking place. Criminals could also make use of your identity to create new accounts, and you must be aware for any bill that are issued under your name.
Lost Cell Phone or Utility Service
If a burglar upgrades a phone contract under the name of you, they can switch to the latest phone they have. The phone service may be suspended for a variety of legitimate reasons, but it is best to notify the service provider. This is the same in the event of any interruptions to other utilities such as electricity, gas and water.
Contact From Debt Collectors
If you get mail from a collection agency or have bailiffs show up at your doorstep this isn’t a good moment. However, it’s even worse when you’re innocent. If you’ve experienced this there’s a good chance it’s fraud. If this is the case you must call the three main credit reporting agencies: Experian, Equifax and TransUnion. It is possible to explain the situation and then dispute the matter.
Denied Claims for Medical Care or Tax Returns
If you file an application for medical treatment or taxes in the U.S., it’s a procedure you’ll want to finish without an issue. If your claim is denied and you are not able to prove it, it could cause an immense amount of financial stress and anxiety. The tax claim or medical fraud scams can be extremely damaging in this regard, resulting in people being denied the funds or health care they require.
How to Prevent Identity Fraud
In an age where we aren’t thinking about buying things on the internet, it’s easy to overlook that each when we disclose your personal details online, we are taking the risk of being hacked. Let’s take a look at five ways to prevent fraud that can help ensure your identity is secure.
Take Care on New Online Stores
Fraudsters create duplicate websites of famous brands. It is easy to spot fake sites because they contain typos, design flaws and problems with their functionality. A reputable website must have the word “HTTPS” in the URL, as well as the small padlock icon within the address bar.
However there are many scam websites that look good. are out there. This is why it’s recommended to stick with well-known brands and retailers with strong social proof when you shop online. If you go to a less-known retailer, it might lack the security even if it’s legitimate; however, the store owner might not offer the same security features that a larger company.
Use a Password Manager
Do not reuse passwords or keep their information on paper. Instead, utilize an app for managing passwords to generate and store long unique, unique codes for each account. A more intricate password can provide better protection against potential hackers.
Set Up Alerts
Today, nearly every business bank, lender or institution will send you a text message when you have a new transaction in your account. Make sure you are able to enable notifications via text or email so that you are aware of when there’s a transaction or withdrawal, or deposit.
Monitor Your Credit and Accounts
Be habitual about looking over your credit report as well as financial statements from every account, medical treatment and bills. If you follow the proper guidelines for checking your financial situation you will be able to spot any suspicious problems before they escalate into a crisis.
Freeze Your Credit
You can also freeze (and remove) your credit at no cost by contacting three major credit bureaus. By doing this, you will be able to stop any new credit file in your name.
We All Must Do Our Part to Prevent Identity Fraud
With all users buying and sharing data online the internet can be an excellent source of identity criminals.
SIEM is a tool which helps businesses identify cybersecurity threats before major destruction or disruption happens. Although this program is widely used in the field of security management, it’s not widespread across online stores.
While businesses need to step up to protect their customers, individuals must be proactive and accept more responsibility for protecting their identity and personal information until 2022.