As ID Theft Hits Record High, Learn How to Combat the Main Scams

Nadav Shemer
How to Combat ID Theft
Identity theft incidents have soared in recent years as cybercriminals have developed new, innovative ways to target victims.

Americans submitted more than 650 thousand complaints about identity theft and identity fraud in 2019, an all-time record and 46 percent more than the previous year, according to the Federal Trade Commission.

What is Identity Theft and Who Does it Affect?

ID theft or ID fraud occurs when someone uses your personal information – such as your name, address, date of birth, driver’s licence number, Social Security number, and/or medical information – to steal money. Thieves can use your stolen identity to commit fraud in any number of ways, including opening accounts in your name, intercepting tax refunds, or making purchases on your cards.

People of all ages can fall victim to the various types of identity theft, including social security identity theft. In 2019, 52% of victims were aged 40 or under, 36% were aged 41-60, and 12% were 60 or over, according to the FTC Consumer Sentinel Network Data Book 2019.

However, the severity of ID theft incidents increases with the age of the victims. On average, people aged 80 and over suffer $1,600 in losses per incident, compared to $600 for 60 to 69-year-olds and $379 for 30 to 39-year-olds.

Consumers in some states report identity theft far more frequently than in others. 

  • Nevada (or more specifically Las Vegas) has the highest incidence of ID theft, at 905 per 100,000 people.
  • Florida, Delaware, Maryland, and Georgia round out the top 5 states for ID theft.
  • At the other end of the scale, the ratio in South Dakota is only 366 per 100,000 residents.
  • Rounding out the bottom 5 are North Dakota, Iowa, Oklahoma, and Nebraska.

Main Types of Identity Theft

Cybercriminals continually come up with new ways to steal people’s data – and new uses for that data. Here are the 7 types of identity theft (according to the FTC’s definition), ranked in order of frequency:

1. Credit Card Fraud 

Frequency: (43% of all ID theft)

Subtypes: New accounts, existing accounts

Credit card fraud is the most common type of ID theft because it is so easy to commit. Thieves can get your credit card information using high-tech hacking or low-tech dumpster diving. All the thief needs is your credit card number, expiration date, and the 3-digit code on the back. Next thing you know: you’re being billed for charges you didn’t make.

2. Loan or Lease Fraud

Frequency: (19% of all ID theft)

Subtypes: Apartment or house rented, auto loan/lease, business/person loan, federal student loan, non-federal student loan, real estate loan

Loan fraud is the fastest-growing type of identity theft, with incidents more than doubling in 2019. Federal student loan fraud is the fastest growing sub-type, up 188% year on year. Loan fraud occurs when a criminal uses a person’s stolen identity to apply for a loan and has the funds deposited in their own bank account. Loan fraud damages the victim’s credit score. In the case of federal student loans fraud, the victim may find themselves unable to apply for a loan for themselves (because you can only apply once).

3. Phone or Utilities Fraud

Frequency: (14% of all ID theft)

Subtypes: Landline telephone, mobile telephone, utilities

Phone/utilities fraud is one of the oldest tricks in the ID theft playbook. It involves using a person’s stolen identity to open a new phone or utilities account or obtain benefits from an old one. For example, criminals have been known to pose as someone else in order to upgrade to a new iPhone – leaving the victim with the bill. 

4. Bank Fraud

Frequency: (10% of all ID theft)

Subtypes: Debit cards, electronic funds transfer, or ACH, new accounts, existing accounts

If an identity thief takes over your bank account, the consequences could be very serious. Not only could they clean out your accounts, but they could use information from your bank account to commit more fraud – such as opening new accounts in your name. Many banks reimburse for stolen funds, but it can take many months to get your affairs back in order.

5. Employment or Tax-Related Fraud

Frequency: (7% of all ID theft)

Subtypes: Employment or wage-related fraud, tax fraud

The good news is employment and tax-related fraud are on the way down. The bad news is almost 50 thousand Americans were targeted last year – and that statistic is only based on people who bothered to report identity theft. Because the IRS only allows one tax return per Social Security number, you will be blocked from filing if a cybercriminal gets there first. Click here to read our guide to identity protection during tax season. 

6. Government Documents or Benefits Fraud

Frequency: (4% of all ID theft)

Subtypes: Issue/forgery of: driver’s license, government benefits, government documents, passport

This is a rare type of identity fraud, probably because it is difficult to do. Benefits fraud is the use of someone else’s identity to on an application to obtain a government benefit. Document fraud involves the manufacturing, counterfeiting, alteration, sale, and/or use of identity documents and other fraudulent documents for criminal activity.

7. Other Identity Theft

Frequency: (3% of all ID theft)

Subtypes: Email or social media, evading the law, insurance, medical services, online shopping or payment account, securities accounts, other

New types of identity theft are popping up all the time as criminals look for new and innovative ways to steal money. Each of the methods mentioned above create thousands of victims each year. 

Protecting Yourself from ID Theft

An entire book could be written on how to protect yourself from identity thieves, but the golden rule is: Never reveal sensitive information to anyone (e.g. a person, company, or website) you don’t trust.

Here are a few basic principles of identity protection:

  • Don’t give sensitive details (e.g. credit card number, Social Security number) on the phone, unless it’s to a company you know can be trusted.
  • Don’t enter sensitive details into a website unless it’s a company you know can be trusted and you see the SSL encryption symbol in the address bar.
  • During a transaction, keep your card in eye’s sight and make sure the store clerk or waiter returns it to you immediately.
  • Check your bills, bank accounts, and credit accounts regularly and report any questionable charges or activity immediately.
  • Always put documents containing personal information through the shredder before disposing of them.

The best way to protect yourself is to sign up for an ID theft monitoring and protection service to receive alerts on suspicious use of your identity. Check out our list of the best identity theft protection services to make sure your identity is never jeopardized. 

Nadav Shemer
Nadav Shemer specializes in business, tech, and energy, with a background in financial journalism, hi-tech and startups. He enjoys writing about the latest innovations in financial services and products.