In reality, identity theft is usually much simpler and easier to perpetrate than this popularized scenario first suggests. With the prevalence of the internet and social media making it commonplace, even expected, for us to share personal details online, the threat of identity theft has rapidly increased.

In 2013, the FTC received 290,056 reports of identity theft. Ten years later, this number totals over a million, coupled with losses of $10 billion. Even when identity theft reports were substantially lower than in 2023, it was still the most common fraud perpetrated against American citizens.

So, if many people have a different idea about identity theft, what does it actually entail? And, more importantly, how can you prevent yourself, your family, and your friends from falling victim to it? In this article, we'll answer both those questions so you can keep yourself safe in the age of identity theft.

What is Identity Theft?

In general terms, identity theft occurs when someone uses your information for their own gain. A fraudster will likely use some kind of malicious tactic to get this information, but in other cases, they may use publicly available details. This is partly the reason why identity theft reports are so high - in practice, a huge number of scenarios constitute identity theft.

Although most cases do result in financial losses, it's worth noting that what the fraudster 'gains' is not always your money. For example, an identity thief might use your name and social security number to obtain a bank loan. Although you'll be liable to the bank for repayment, and your credit score will be impacted, your money hasn't technically been stolen.

As a result of this varied nature, identity theft is hard to prove, incredibly stressful and isolating, and will likely affect your everyday life long after the crime has been committed. This leaves us with an important question...

What Are the Most Common Types of Identity Theft?

While each identity theft case is unique, they usually fall into five common categories. These are:

Financial Identity Theft

This is the most common type of identity theft. It involves a fraudster using stolen bank account and credit card details to make purchases, withdraw funds, or open new accounts. This is done for financial gain, and victims face damaged credit scores, significant debt, and, of course, financial losses.

Criminal Identity Theft

In this scenario, a criminal provides someone else's personal information to law enforcement during an arrest or investigation. This can lead to wrongful criminal records, arrest warrants, or legal issues for the victim, who is likely to remain unaware of the identity theft until, if ever, they encounter legal trouble themselves.

Medical Identity Theft

When perpetrating medical identity theft, the fraudster will use someone else's identity to receive medical care, prescriptions, or insurance benefits. This can lead to the victim having inaccurate medical records, being wrongfully billed, struggling to get insurance or access essential care, and can even cause life-threatening situations if incorrect medical histories are recorded under the victim's name.

Child Identity Theft

Many fraudsters are aware that parents typically don't check their child's credit, as there’s little reason to do so. This is why the theft of a child's Social Security number or personal information to open accounts, apply for loans, or engage in other financial activities can go undetected for years. The lack of immediate consequences makes children a prime target for identity thieves.

Synthetic Identity Theft

Finally, this form of identity theft involves criminals combining real and fake information to create a new, synthetic identity. For example, they might use a legitimate Social Security number but pair it with a false name and date of birth. This synthetic identity is then used for illegal purposes and is incredibly difficult to trace back to a real person.

Many identity theft cases also involve other crimes, like mail fraud or credit card fraud. Surprisingly, this does have its benefits, as fraudsters' ways of gaining and using your information usually follow similar patterns, making it much easier to spot the warning signs.

How Identity Thieves Gain Access to Your Information 

Generally, identity thieves obtain your information physically or digitally. The following tactics are divided into these categories.

Physical Tactics

Dumpster Diving - When you're finished with receipts, old ID cards, and broken electronic devices, the logical course of action is to throw them out. However, all of these items contain important personal information, turning your dumpster into a gold mine for fraudsters. Though looking through trash is less common in the digital age, don't let this fool you into thinking dumpster diving never happens.

Mail Theft - Bills, letters from your bank, place of work or school, and even cards from loved ones all contain information that is invaluable to identity thieves. On many occasions, all they have to do to gain access to these things is look through an unsecured mailbox or intercept them during delivery.

Shoulder Surfing - How many times have you taken a peek at the game someone's playing on their phone or overheard an argument on public transport? While many of us avert our eyes and ears, sometimes it's impossible not to. If it's that easy to gain personal information even when we don't mean to, it's far easier for fraudsters with that exact intention. This is why shoulder surfing, observing individuals in public places to gather personal information by watching them enter passwords, PINs, or other sensitive data, is a common tactic in identity theft.

Digital Tactics

Hacking - Unlike the cybercrimes in The Matrix, Tron, and Die Hard, hacking can be as simple as tricking you into clicking a malicious link or logging into your accounts with a stolen password. Hackers might exploit unpatched security flaws in devices and apps you use every day, or even lead you to believe that software that records the buttons you press on your keyboard is a trusted anti-virus. Once inside, everything stored on your device is theirs.

Pretexting - A form of phishing that involves a fraudster impersonating an official individual, pretexting is referred to as "spear phishing." A fraudster will craft highly personalized messages, often posing as a trustworthy authority figure such as a bank representative, company executive, or government official, to deceive you into divulging sensitive information. Unlike generic phishing, which targets a broad audience, spear phishing targets specific individuals or entities, making these messages much more convincing.

Browsing Social Media - Sometimes, fraudsters don't need to create malicious code or act like your estate manager. Sometimes, all they need to do is log onto Instagram or Facebook and scroll through your profile. A photo of your new car says a lot about your financial status and can be used to craft spear-phishing scams. Or, a seemingly harmless post about how much you're enjoying your vacation signals that your home is unoccupied and your trash can unsecured.

How to Prevent and Avoid Identity Theft

With the above tactics in mind, you now know which areas of your physical and digital life you need to protect. Prevention should start well before any fraudster pinpoints you as a potential target, so employ the following tips in your daily life as soon as possible to ensure you're protected against identity theft.

1. Lock your trashcan. A generic padlock with a key stored inside your home will do just fine.
2. Shred or deface mail that you intend to throw away. Redact your name, address, and other important information with a Sharpie or magic marker.
3. Get a privacy screen for your phone and laptop. These make it much harder for people around you to see what you're doing on your device.
4. Avoid using ATMs or paying by card when people are behind you. If you must do so, then be sure to cover your PIN or signature.
5. Check for updates to your device software and apps. Developers often patch any potential security vulnerabilities in new updates.
6. Change your passwords regularly. If you find it hard to remember new passwords, use an encrypted password manager. Never write your passwords down physically in a notebook or on a Post-it note.
7. Check the data privacy and protection policies of the sites and organizations you use. Remember that you can and should submit data removal requests to any companies you no longer deal with.
8. Update your email inbox's spam filters. Many providers, like Gmail, already have stringent settings. Others, such as Outlook, will warn you with pop-ups when they believe a sender is suspicious.
9. Be wary of unsolicited contact from those claiming to be in positions of authority over you. If you intend to keep the conversation going, remain calm, trust your instincts, and don't provide any information that the individual should reasonably already have access to.
10. Always double-check claims made over the phone, by text message, or online chat. Any genuine individual will be happy for you to verify their position and the information they've provided.
11. Update your social media privacy settings. Make sure your profile is only visible to people you've allowed to friend or follow you. Don't accept friend or message requests for your personal profile from anyone you don't know.
12. Block and report suspicious social media accounts.

In Conclusion...

Identity theft is a lot more common and can be a lot more subtle than many people expect. Though financial gain is the primary motive for many fraudsters, the objectives behind these crimes can be varied and unexpected.

However, despite its prevalence, you can protect yourself and your loved ones from identity theft in several ways. A proactive approach to securing your details is best, so stay vigilant, monitor your financial transactions and online accounts, and don't hesitate to report any suspicious activity to the FTC.

Sources and Resources

• https://www.usa.gov/identity-theft
• https://www.investopedia.com/terms/i/identitytheft.asp
• https://www.ftc.gov/system/files/ftc_gov/pdf/CSN-Data-Book-2022.pdf
• https://www.experian.com/blogs/ask-experian/20-types-of-identity-theft-and-fraud/
• https://www.mcafee.com/learn/5-common-types-of-identity-theft/
• https://www.equifax.com/personal/education/identity-theft/articles/-/learn/how-does-identity-theft-happen/
• https://www.eset.com/uk/types-of-cyber-threats/identity-theft/
• https://ico.org.uk/for-the-public/identity-theft/
• https://www.experian.com/blogs/ask-experian/how-to-protect-yourself-from-identity-theft/
• https://www.nerdwallet.com/article/finance/how-to-prevent-identity-theft

The post Sure-Fire Ways to Avoid Becoming a Victim of Online Fraud or Identity Theft appeared first on MoneyThumb.

Thankfully, data protection laws mean companies are greatly restricted in what they can do with this data. However, if you make some of this information available, on social media for example, or if one of these companies suffers a data breach, you can turn into an easy target for scammers using advanced fraud tactics.

In 2021, the FTC reported that it had received over 2.8 million fraud reports, with consumers losing up to $5.8 billion. In this article, we’re going to explore what the most common types of online fraud are, as well as how you can best protect your identity when using the internet, so you don’t become part of these statistics.

The Basics of Online Fraud

 What is online fraud?

Fraud is any attempt to solicit money, goods, or gain from individuals or organizations by using deception. Online fraud then, is a fraud that is committed using various means of connecting with people on the internet.

Why do fraudsters use the internet?

 Arguably, with how simple it is for anyone to construct an entirely false identity online, as well as the sheer amount of information we share about ourselves publicly, the internet has made committing fraud easier than ever.

Why is your online identity valuable to fraudsters?

Sometimes, fraud will result in scammers gaining access to your online accounts or email address, which they will then use to scam others who trust you. This identity theft is a huge concern online because it can result in you losing important documents and data, as well as your reputation, and the (sometimes very large sums of) money needed to reclaim your identity.

The Warning Signs of Advanced Online Fraud

Below are some tactics that online fraudsters employ to get your details or money. Familiarising yourself with these warning signs will help you spot scams from the moment fraudsters make contact.

Creation of Urgency -Fraudsters need to push you into a corner, to get you to give them what they want as quickly as possible. Emotional manipulation and social engineering are frequently employed by scammers. Any legitimate business or contact will understand that you need to take your time if payment is concerned.

Too Good to be True - One of the early warning signs of fraud is being offered a prize or price that is irresistible. Fraudsters know that if they offer you something you want, you’ll be much more likely to fall into their trap. The same goes for an overwhelming amount of positive reviews on a site’s products or services. Remember, if something seems too good to be true, that’s probably because it is.

Cash in Gift Cards - Any cash transactions you make can often be traced and recalled by your bank. This is why fraudsters who are attempting to solicit payment from you will often ask you to send it to them in gift cards. As soon as someone asks you to send payment through gift cards, cease all communication.

Links in Emails - Many fraud attempts will originate in your email inbox. Any email that requires you to click on a link should be regarded with suspicion. It may seem harmless, but sometimes a single click can give away very personal information about yourself. Only open links or attachments from senders whom you trust, and block any that you don’t recognize.

What Are Some Advanced Fraud Tactics?

One of the easiest ways to protect yourself from online fraud is to familiarise yourself with the most common scams that individuals fall victim to. Below we’ve listed the 5 most reported frauds in the US, as well as how you can spot and stop them.

1. Imposter Scams

These fraud attempts involve a scammer taking on a false identity, chosen specifically to make you more likely to trust them and give them what they want. For example, a common imposter scam involves receiving a distressing phone call or email from a long-lost family member who has found themselves in an emergency, that will only be solved if you pay up.

You should be wary of any correspondence from people who you don’t immediately recognize. If this is truly someone close to you asking for help, they will be willing to wait while you double-check the information provided.

2. Job Opportunity Scams

These fraud attempts target those of us who are looking for employment, by advertising ‘dream’ jobs, usually on job boards and listing sites. By hosting a fake interview, the fraudsters gain a lot of valuable information on your identity that they can use against you in the future.

Be sure to scrutinize any information about the company and interviewer you are provided with, and be wary about any interview that is conducted remotely, over instant messenger, or through phone calls.

3. Shopping Scams

Fraudsters who use online shopping scams will create fake stores, filled with products at discounted prices, and often with a whole host of 5-star reviews. It can seem even more legitimate if you have visited a fake store through a social media ad. By purchasing from these fraudulent stores, you give away not only your money but incredibly important information such as your card details.

Use third-party sites such as Trustpilot to check independent reviews on any store you have concerns about. You should also make sure that the URL for the site begins with ‘HTTPS’, as these sites will encrypt any data you give to them. Finally, if you do choose to purchase from an online store you’re a little skeptical of, be sure to use a payment method with consumer protection.

4. Sweepstakes and Lottery Scams

Have you ever visited a site and received a pop-up telling you that you’ve won a new iPhone? Then you’ve come across this type of fraud before. By informing you that you’ve won a prize, these fraud attempts draw you in with the promise of something valuable. However, it turns out that you can only claim your prize by giving away your details, or even by paying a deposit.

You should ignore any prize for a competition that you have not entered. This goes for pop-ups on sites and emails. To add to this, any lottery that requires you to pay out for the prize is almost always illegitimate.

5. Technology Support Scams

These frauds originate with a pop-up, email, or call informing you that a virus or fault has been found on your device. The scammer may try and impersonate someone from your device’s manufacturer to come across as trustworthy. Then they’ll ask you to download some software that will allow them to fix the issue, but in reality, they will take control of your device and have access to everything stored on it.

Your device’s manufacturer will rarely if ever, reach out to you first if there is an issue with your device. If you do receive correspondence of this kind, do not give out any information, and instead reach out to your chosen tech support using official emails and phone numbers found on their website.

Determining Your Online Identity

To best protect yourself from fraud on the internet, you should know when and where you have and are currently sharing information about yourself online. Once you’ve got a hand on these sites, you’ll be far better equipped to protect your online identity.

Most websites will have access to your IP address, which can also give them your location, as well as details about the device and browser you’re using. To protect this information, a paid VPN is a useful tool.

Any site on which you have an account has access to your email, so it can be worth trawling through them and deleting your accounts on sites you no longer use. On top of this, there are services you can use that will identify which of your accounts may have been compromised. Once you know this, you can change your password.

As for social media, putting your accounts private or limiting the people who can view your profile will protect any personal information you decide to share. Moving back to basics, you should never share your address, current location, contact details, or place of work on your social media.

How to Protect Your Online Identity 

Protecting yourself from fraud attempts online isn’t a difficult or time-consuming undertaking. In fact, with a few simple tweaks in your behavior, you can ensure that online fraudsters will not be able to find out enough about you to initiate a scam.

1. Use different usernames and passwords for each account

If you use the same password across a range of websites, once fraudsters have access to this password, all of these accounts are compromised. It can get tricky to remember such a range of passwords, so be sure to utilize a password manager to keep them stored and safe. This trick also means it’ll be much harder for fraudsters to track you between sites.

2. Change passwords regularly

Even if you’re using different passwords for each site, one can still become compromised through data leaks. This is why it’s important to change your passwords for your most regularly used accounts at least every 3 months.

3. Use a different email for work and personal correspondence

Access to your email can give fraudsters a huge amount of information on your identity, as well as allow them to use your identity to scam those in your contacts list. A useful tactic to limit the sites that have access to your email is to use different addresses depending on what you’re signing up for. For any important correspondence, a separate email address with a strong password that is regularly changed will help protect your online identity.

4. Keep any device software up to date

Using out-of-date software opens your device up to attacks from those looking to commit fraud. Completing software updates as and when they become available will help protect your devices with the latest anti-virus from your device’s manufacturer.

5. Block suspicious emails or accounts

Any account or email address that you don’t recognize that reaches out to you should be regarded as suspicious. For the best protection, block these contacts and accounts straight away. Most email servers will have an automatic spam filter, but if one of these fraudulent emails does make its way into your inbox, avoid any links and block the sender.

 Sources

https://www.ftc.gov/news-events/news/press-releases/2022/02/new-data-shows-ftc-received-28-million-fraud-reports-consumers-2021-0

https://www.experian.com/blogs/ask-experian/most-common-types-of-fraud/

https://www.arborfcu.org/blog/10-warning-signs-its-fraud

https://www.webroot.com/gb/en/resources/tips-articles/how-can-i-protect-myself-from-identity-theft-online

https://www.esafety.gov.au/young-people/protecting-your-identity

https://www.globalsign.com/en/blog/what-data-is-collected-about-you-online

https://www.pewresearch.org/internet/2015/05/20/americans-views-about-data-collection-and-security/

https://www.met.police.uk/advice/advice-and-information/fa/fraud/online-fraud/cyber-crime-fraud/

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To help you as a private lender to learn how crooks go about creating false loan applications and how to avoid falling for such a scam, take a look at this article from Identity Mind. The article even lists 8 Identity Verification Tests you can perform to prevent loan application fraud. For your convenience we have included those 8 tests below:

1. Identity Document Verification
2. Identity Data Validation
3. Bank Account Ownership
4. Out of Wallet Questions
5. Identity Risk Scoring
6. Out of Band Phone Identification
7. Social Media Analysis
8. Video Conversation

That article from Identity Mind goes into much greater detail, so if you are a private lender, do yourself a favor and read the article in its entirety. Identity fraud is a very serious offense and similar to identity theft. In fact, the two terms are pretty much interchangeable. The U.S. Department of Justice says both terms “refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.” Experian has an article that does a wonderful job of covering the 20 types of identity theft and fraud.

We hope that the information we have provided above can help you as a lender avoid unscrupulous people creating false loan applications directed at your lending business for the intent of obtaining a loan.

Before we close out this blog post, we'd like you to understand that MoneyThumb provides the best PDF financial file converters on the market. Using our tools can be an additional way to prevent identity fraud. For instance, our proprietary software can spot indiscretions and unusual loan application activity, such as a loan applicant listing an unrecognized bank. MoneyThumb has a version of our PDF financial file converters specifically designed for lenders. If you are a private lender, take a free test drive of our software today.

The post Avoiding Loan Application Fraud as a Private Lender appeared first on MoneyThumb.

To help our blog readers avoid Christmas scams, below we have listed what FightIdentityTheft.com has cleverly dubbed The Twelve Scams of Christmas. The following are 12 scams to look out for during the Christmas holidays:

Charitable phishing scams:

• beware of e-mails posing as legit charities. They will take your money and credit card info and the charity will never get your money.
• The e-mails asking for money may even have to charity logos, like the Red Cross or Salvation Army
• To assure that your charity of choice gets your donation, go to the source. Go directly to the charity’s website to give a donation
• Also, beware of phone and door solicitors asking for charity donations. If you are unsure if they are legit, tell them that you don’t give money over the phone or at your doorstep and then go directly to the source to give if you so wish.

Fake invoices from delivery services:

• This is sneaky business. You are sent an e-mail with a fake invoice or waybill attached. Then there are a few variations.

“the recipient may be asked to confirm or cancel an order, they may be told that the parcel service was unable to deliver a package due to having an incorrect address, or the recipient may receive a customs notification about an international package.”

• In every case, the e-mail recipient is asked to give credit card info so that the account can be credited or to open the invoice or customs form so the package can be delivered.
• This kind of scam works because people believe they are receiving e-mails from Fed Ex, Ups or US Customs. Instead, they are delivered a Trojan package or some other threat that can lead to identity theft or computer hackers.
• To keep yourself safe, contact the company directly and never give out your credit card information via e-mail.

Social networking friend requests:

• Scammers send authentic-looking friend request e-mails. But they aren’t friends at all unless your friends want to infect your computer with malware.
• So, don’t clink any links, go directly to the social network site to accept new friends.
• You’ll also want to make sure that you have anti-virus software running on your computer.

Holiday e-cards:

• this is a great time of year for scammers to spread malware through e-cards. don’t open them if you don’t recognize the site the card is from.
• the cards often contain malware, pop-ups, and other unwanted advertising.
• Some cards look like they come from legitimate companies like Hallmark, so make sure it is from someone you know.
• Often fake e-mails have misspelled words in the subject line, come from unknown senders or have odd URLs. So, when in doubt, don’t open it.
• If you are sending e-cards, make sure you do so from a reputable site.

E-mail bank scams:

• Tracy Mooney (McAfee’s blogger) had this experience with bank scams.

“I received several emails telling me that my bank account was being tapped by an overseas IP address and that I should click on the link and log into my bank account or they would close my account. The funny thing was that I didn’t have an account with that bank!”

• Moral of the story: Don’t trust e-mails sent from your bank asking you to log into your account through the e-mail. Either go to their site directly or call them if there seems to be an immediate problem.

Job search related scams:

• Unemployment is at an all-time high. Scammers are taking advantage of people’s desperation. Be sure you if you are using the internet to look for work only use well-known sites such as Monster.com, Indeed.com, and GlassDoor.com.

Fraud on auction sites:

• Everyone loves a good deal. But is it too good to be true? If it seems to good to be true it probably is.
• If the price seems really too good, has a very short sale time and the same picture can be found on multiple auction sites it is probably a scam.
• Also, most auction sites have security and safety tips. Here’s Ebay’s.
• Check sellers’ reviews, they are there to help customers.

Password stealing scams:

“According to a holiday shopping study that McAfee had done, 53% of consumers use the same password for multiple websites and online services.”

• Password hacking is easy and sometimes silent
• Make sure you are using firewalls, secure networks, anti-virus, and anti-spyware software.
• Also, make sure that your computer runs updated regularly. (Put in instructions from the previous blog about how to set up updates to run automatically.
• Consider using a password manager to choose a different password for each account. Using the same password for every account is a recipe for disaster.

Holiday media scams:

• McAfee did a study and found that 49% of people did or would open a holiday-themed e-mail. This is a scammer’s dream!
• Don’t open an e-mail unless you know who it is from. Don’t open attachments unless you know who it is from. Just b/c the e-mail says it is some cute or touching holiday form of media doesn’t mean it is safe. Be smart and keep yourself safe this holiday season.
• Red flag raisers: attachments in the form of PowerPoint presentations, vague holiday-related subjects, misspelled words, or odd-looking URLs.
• Examples of headlines scammers use to get you to open their e-mails are things like “happy 2009” “happy 2009 to you “new hope and a new beginning”

Practice safe holiday online shopping:

• Use secure networks when doing online shopping.
• Don’t use your credit card or banking website when using open wifi and unsecured networks. Attackers can set up their own network near hotspots and you may end up connected to it. If you do then the attacker can see everything you do and even direct your computer to sites you may not want to go. 2 points: 1.only access your bank account and use your credit card on a computer that you know is on a secure network, 2. when you surf at a coffee shop or other wifi hotspot, make sure your anti-virus software and firewall are up to date and running.
• If you really must use free or unsecured wifi, use a VPN to encrypt your connection.
• Trust the site that you are making purchases from. When entering your credit card information there should be a closed lock in the address bar and there should be an ‘s’ after ‘https’ in the address bar. The ‘s’ is for secure.

Holiday terms search scams:

• What could be more festive than having a holiday screensaver and desktop? It won’t be so jolly if you end up with a malware-infected computer instead.
• (Not sure the advice to give to prevent this. The McAfee article suggests using their SiteAdvisor, but not sure if we want to recommend that.)

Laptop Theft

• People get desperate during the holidays. The FBI says that 1 in 10 laptops are stolen and only 3% are ever recovered.
• Make sure that you keep your laptop close by at all times. Don’t leave it visible in the car if you have to leave it in the car.
• You should also back up your files. We recommend using Mozy.

Bottom Line

Scammers and criminals are out in full force during the holidays. It is important now, just as always, to use caution when using the internet. If you are uncertain if a website or e-mail is safe then leave it be. It is better to be safe than sorry. Also, make sure that your anti-virus software is up and running and that your computer runs updates automatically.

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