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How Does Online Identity Theft Happen?
June 2024
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How Does Online Identity Theft Happen?

Not everyone will experience online identity theft. But hundreds of thousands of Americans do—it’s one of the fastest growing crimes in America. The fact is, these days, there are scammers looking to steal your online identity, any way they can, 24/7.

So how does identity theft happen online?

First, let’s go over what identity theft is, how it happens and how to protect yourself against it.

What is online identity theft?

In short, online identity theft is the illicit acquisition and fraudulent use of someone’s personal identifying information.

It can happen to anyone. It can happen to you if you open a malware-laden email, give away too much personal information on social media, your banking information slips into the wrong hands, or simply because dark web hackers figure out how to get past government security walls and steal your sensitive information.

Furthermore, it takes time to fix identity theft—to say the least: As much as 6 to 18 months

But there are some proactive measures you can take. First, let’s go over a few different types of online identity theft.

What are the most common types of online identity theft?

There are many different types of online identity theft, the most common being:

  • Mail fraud. This may sound old-fashioned, but it still goes on. Fraudsters can go through your trash and find forms with your Social Security number, banking information, etc. on them. They can then use those to pose as you and do all manner of mischief to your financial and personal lives.
  • Phone scams. Fraudulent callers identify themselves as part of a government or private agency and request your Social Security number over the phone. As a best practice, it’s never a good idea to give your social security number out over the phone unless you know exactly to whom you’re speaking.
  • Credit card readers. Financial identity theft is the most common type of online identity theft, and “skimming” credit cards is on the rise. Scammers install a device on a credit card reader that copies information from your debit or credit card’s magnetic strip.
  • Email fraud. If you open virus-laden emails you become a victim of phishing. These emails contain links that either install malware on your device as soon as they’re clicked or lead you to what looks like a legitimate financial or government website requesting sensitive personal information.
  • Social media harvesting. Many people inadvertently give up sensitive private information on social media sites. It’s normal, really: Social media sites let you state where you live, where you go to school, and where you’ve been recently; they allow you to post pictures of yourself that may have your neighborhood in the background and identifying information of all sorts can make its way into photos, location stamps, and comments. Fraudsters piece this information together to figure out who you are and steal your sensitive personal information. And that’s just for starters.

How to protect yourself from online identity theft?

By now, you’re wondering exactly how to protect yourself from online identity theft. Let’s go over a few proactive steps you can take to improve your identity theft protection.

Review your banking information regularly

Most identity thieves are out for money. As such, it’s your financial information they’re usually targeting.

If your bank has an online banking portal, sign up for it and monitor all transactions. If anything seems suspicious, notify a banker right away. You can flag fraud, put a freeze on your credit or debit cards, and do any number of things to protect your banking information.

Monitor your credit

If you’ve applied for a loan and didn’t get it despite meeting the servicer’s credit requirements, get a credit check. Online identity thieves can use your personal banking information to apply for loans in your name. And if they do so after racking up credit, your credit score can take a hit.

If you get communication about loans you don’t remember applying for, get in touch with the three major credit bureaus and have them take those off your credit report. You can also freeze access to your credit report.

Observe multi-authentication log-in protocols

You’ll want to be as thoroughly password protected as possible. With that in mind, try to:

  • Change usernames and passwords frequently
  • Establish multi-factor authentication on all devices
  • Use a password manager (such as LastPass) so you don’t have to remember lots of unique passwords

Make no mistake about it: Cybercriminals are clever. You’ll need to stay a step ahead of them if you want to keep your personal information safe.

Do not give out personal information over the phone

The IRS and other government agencies will always contact you via mail. So anyone who says they’re a government representative that needs your social security information over the phone is a fraudster.

Fraudsters often pose as banks. They’ll call you and tell you that there are urgent problems with your account; they ask you to confirm your social security number and other sensitive information. Don’t do it. As a rule, don’t give your social security number out to anyone who calls you. Only give it out to trusted organizations who you call.

Avoid suspicious-looking emails

Phishing is widespread and common. Phishers send you an email or text saying they have urgent information from your financial institution, the government, and so on, and ask you to follow a link. These emails will often come from long, nonsensical email addresses If you’re wondering how to protect your data from being stolen, keep this in mind: Whatever you do, don’t click on that link.

How to protect yourself against becoming a victim of online identity theft

The adage is true: An ounce of prevention is worth a pound of cure. Make sure you change up and secure online usernames and passwords; monitor your credit and your banking information for strange activity; and don’t open suspicious emails or texts.

The best protection against online identity theft is a world-class monitoring service like IDShield, which gives you an extra layer of armor.

Frequently Asked Questions

How does your identity get stolen online?

Cyber thieves steal your identity in a number of ways. They may simply use a search engine to glean publicly available information about you. Other times they’ll run phone, email or mail scams.

How does identity theft happen on social media?

Identity theft happens on social media when users voluntarily populate their accounts with sensitive information such as their location, occupation and education information; identity thieves can even piece together a picture of you from what’s in the background of photos you upload. 

What is the most common way of identity theft?

Financial fraud is the most common type of identity theft. Thieves obtain your banking information by using scanners that record information about a credit card you used at a certain vendor. Other times, scammers will pose as representatives of your bank and ask for sensitive information such as your account number or Social Security number.

Can your identity be stolen online?

Yes, your identity can be stolen online as well as in person.