Identity Theft doubled from 2019 to 2020, according to the FTC. They received 1.4 million reports in 2020, many of them related to highjacked stimulus checks.
With the IRS issuing 156 million payments and the push for recurring payments until the pandemic is declared over, 2021 is likely to be even worse.
The Global Identity Theft Protection Services Market is expected to expand 13.06% due to the increasing cybercrime and identity theft.
Alarmingly, a 2021 Aite Group report indicated that nearly half of all consumers had experienced some type of identity theft already!
An April 7th, 2021 ITRC Analysis concludes that “The number of individuals impacted is up 564 percent (51 million in Q1 2021 versus eight million in Q4 2020).”
These statistics make it obvious that consumers must take control of their identities and put security in place to ensure they aren’t the next victims.
How to Prevent Identity Theft
Think of all the accounts you have and imagine having to secure each of them separately. At a minimum, you would need alerts to let you know when your accounts are compromised.
But that won’t prevent security breaches. And most people do not realize they’ve been victims until long after the damage is already done.
While there are many services available, most of them are not comprehensive. For example, some only monitor credit reports which would do nothing to avoid tax identity theft.
Other services provide insurance against losses, but no protection. The ideal solution needs to protect you and your devices plus your financial and personal information.
Fortunately, there are companies working on building out comprehensive solutions. For example, Aura is a digital wellness and security suite.
They are pulling together individual identity theft related services. And have set a goal of making their platform easy for non-technical people to use.
How to Tell if your Identity has been Stolen
You may already be the victim of identity theft and not realize it. Pay attention to anything unusual that happens. For example:
Are you carefully monitoring your credit card and bank statements to detect activities you did not generate?
Have you received mail in your name to your address that seems meant for someone else or about actions you have not taken yourself?
Do you check to make sure you receive all the mail, especially bills, you’re expecting?
Are you receiving surprise medical bills or notices that you maxed out your benefits?
Don’t just dismiss anomalies out of hand. Investigate to find out why they happened. And check your credit report often.
Types of Identity Theft
There isn’t just one kind of identity theft. There are a growing number of different types frequently discussed:
Medical identity theft – fraudulent claims for Medicare or health insurance
Financial identity theft – use of your identity to steal money or obtain credit in your name
Tax identity theft – thieves who steal tax refunds or incentive checks
Criminal identity theft — someone uses your identity when they are arrested
Child identity theft — using a child’s stolen Social Security number
Identity Cloning / Concealment — when someone impersonates you in real life
Synthetic Identity Theft – thief uses your Social Security number to create a false identity
With the increase in tax identity theft due to stimulus checks, it is important to know the signs. Read Tax Identity Theft: What It Is and How to Protect Against It.
Do You Need Identity Theft Fraud Insurance Coverage?
Many homeowners’ or renters’ policies offer Identity Fraud expense reimbursement coverage. Ask your agent whether you need a rider or endorsement to add this type of insurance.
You can also buy standalone identity theft fraud insurance. But make sure you know what kind of coverage you want and what each type of policy covers.
Note that coverage can vary greatly. Some cover financial losses, but may not assist in recovering from the damages done to your credit, legal issues, etc.
Others do not cover financial losses due to the theft. They only assist in recovering from identity theft which can take years.
What to Do if Your Identity is Stolen
But what do you do if you are victimized? First, file a report with law enforcement and contact the FTC through IdentityTheft.gov.
You have the right to:
Place fraud alerts
Obtain free copies of credit reports
Receive documents related to the theft
Get information and protection from debt collectors
Block and remove fraudulent information from your credit file
Freeze your credit file for free
These rights are laid out in more detail in Your Rights as an Identity Theft Victim.
Prevention is Much Less Painful than Identity Theft
It may be tempting to ignore the risks because acting seems overwhelming. But dealing with the aftermath can cause you years of headaches.
You will need to restore your credit and it can even land you in jail for something you did not do. While it may not be fun, setting up protection and alerts really is necessary.