14 Hidden Dangers of Identity Theft That Can Ruin Your Life

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Gaetano DiNardi

Head of Content at Aura

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    How Bad Is Identity Theft? Worse Than You Thought.

    Identity theft is everywhere. We see news stories almost daily describing new ways that criminals can steal your personal information along with warnings of massive data breaches that make your sensitive information available to hackers on the Dark Web. 

    According to the Federal Trade Commission (FTC), 2021 was the worst year of all time for identity theft [*]. More than 5.7 million Americans were victims of identity theft and fraud, suffering losses in the billions.

    But financial losses aren’t the only serious danger of identity theft. 

    When criminals gain access to your personally identifiable information (PII) — full name, Social Security number (SSN), birthday, etc. — they can do serious damage to your career, reputation, credit history, and even leave you with a criminal record. 

    Depending on the severity of the attack, the effects of identity theft can last for days or years. It happened to me, and took me months to recover. I suffered an account takeover attack which resulted in a significant financial loss.

    In this guide, we’ll cover the most critical dangers of identity theft, how criminals target you and steal your information, and how you can protect yourself and your family.

    The 14 Hidden Dangers of Identity Theft

    If someone steals the cash out of your hand, it’s a one-time loss. But when criminals steal your identity, it can take weeks, months, or even years to fully recover. 

    Even after you think you’ve recovered, statistics show there’s a 30% chance you’ll become a repeat victim of identity theft and fraud [*]. 

    So, how can identity theft impact your life? Here are the most common dangers of identity theft:

    1. Fraudsters can open new accounts, credit cards, and loans in your name.
    2. You can lose your health care benefits (i.e., medical identity theft).
    3. Hackers can “own” your email and other accounts (account takeovers).
    4. You’ll have to repair your credit score.
    5. You could lose your home due to mortgage and deed fraud. 
    6. Criminals can steal your tax refund.
    7. Hackers can post embarrassing posts on your social media accounts. 
    8. You could spend large amounts  of time and money recovering your identity.
    9. You could experience psychological harm and emotional distress.
    10. You could become a victim of repeat identity theft and fraud.
    11. Scammers can commit crimes in your name.
    12. Your personal data could circulate on the Dark Web forever.
    13. You could start receiving many more spam calls and emails.
    14. Your children or elderly parents could have their identities stolen.

    1. Fraudsters can open new accounts, credit cards, and loans

    When most people think of the dangers of identity theft, the first thing that comes to mind is financial fraud. And for good reason.

    Once a criminal has access to your PII or stolen credit card numbers, they can:

    • Create duplicate credit cards using your credit card numbers. 
    • Use your bank account numbers to make withdrawals.
    • Open fraudulent loans or lines of credit under your name. 
    • Apply for credit at other companies or banks using your information.
    • Use your SSN to create a “synthetic identity” — and then use it to commit fraud.
    • Empty your bank account.
    • Commit check fraud and other bank scams in your name.

    Luckily, most credit card companies, banks, and debit card issuers won’t come after you for the money that an identity thief spends in your name — as long as you report the fraud quickly, and actively work to shut down the scammer. 

    But that doesn’t stop a thief from draining your savings, racking up debt, and damaging your credit score (which can take inordinate amounts of time and effort to repair).  

    Pro tip: Sign up for a credit monitoring service that alerts you as soon as a scammer tries to use your credit or financial information. For example, Aura will send you fraud alerts up to 4X faster than any competitor.

    Aura credit monitoring with 4X faster fraud alerts
    [Source: Aura credit monitoring with 4X faster fraud alerts]

    2. You can lose your health care benefits (i.e, medical identity theft)

    If there’s one thing many identity thieves want more than your financial information, it’s your Protected Health Information (PHI), such as your health insurance information, medical records, and Medicare number

    PHI is worth upwards of $1000 on the Dark Web — that’s more than 200X as valuable as stolen credit card information. 

    With your PHI, criminals can commit medical identity theft and use up your healthcare benefits, receive treatments under your name, or illegally acquire prescription drugs. Even worse, they can alter or misrepresent your medical history — causing you to receive wrong or even potentially dangerous treatments. 

    According to the Medical Identity Fraud Alliance, 20% of identity theft victims end up dealing with medical identity theft [*]. 

    3. Hackers can “own” your email and other accounts (account takeovers)

    Identity thieves know that your inbox is the key that unlocks many of your other online accounts. 

    If your passwords are weak enough, hackers can use cyber attacks that will crack passwords in a matter of minutes or even seconds. Or, they might try a password that got leaked in a data breach (this is why you shouldn’t reuse passwords).

    Once they hack your email, scammers can request password reset emails and take over your other accounts (like your social media or banking accounts). 

    They could also use your email address to send spam messages and malicious links to people in your network. Or, they might even search for sensitive information and photos which they can use to blackmail you. 

    But what about security questions? 

    It’s true that many password resets require you to answer security questions. The problem is that many of the answers can be easily found by browsing your online footprint and seeing what you share on social media.  

    Aura online account protection
    [Source: Aura online identity protection]

    4. You’ll have to repair your credit score

    When identity thieves steal your PII, they can wreak havoc on the criteria that determines your credit score. 

    This includes your:

    • Payment history. This is the most heavily-weighted factor in determining your credit score (35%). If you miss payments for more than 30 days because a fraudster opened accounts you don’t know about, it can drop your credit score by 100 points or more [*].
    • Credit utilization. This makes up an additional 30% of your credit score and includes your overall debt and credit utilization. If identity thieves take out new credit cards in your name and max them out, they’ll seriously damage your utilization score. 
    • Length of credit history. This factor is worth 15% of your credit score and refers to the age of your accounts. If scammers start opening lots of new accounts, it hurts your credit score. 

    A damaged credit score can prevent you from qualifying for mortgages, personal loans, and even prevent you from getting certain jobs. 

    To repair your credit score after identity theft, contact your bank and any lenders to cancel fraudulent accounts and dispute charges. Then, get in touch with the three credit bureaus — Experian, Equifax, and TransUnion — to fix any fraudulent charges, penalties, or hard inquiries. 

    5. You could lose your home due to mortgage and deed fraud 

    Identity thieves can even illegally transfer the ownership of your home to their name and sell it, rent it out, or steal the equity you’ve built up. 

    Deed fraud — also known as title fraud, title theft, or house stealing — is a growing problem for older and vacation home owners. It’s especially common for elderly people who may have even been tricked into signing over their title. 

    Aura’s identity theft protection includes home title monitoring, which will alert you if anyone tries to change your title without your permission.

    6. Criminals can steal your tax refund

    Tax identity theft is one of the most dangerous and damaging types of identity theft. 

    If a criminal steals your Social Security number, name, and birthdate, they can file for taxes under your name. 

    Scammers will report bogus income and claim fraudulent benefits to get a massive refund. Then, when you go to file your taxes, your legitimate return gets flagged as fraudulent. In 2020, the Internal Revenue Service (IRS) flagged 5.2 million tax returns as fraudulent.  

    Not only does this damage your standing with the IRS, but it can also impact your eligibility for funds from the Social Security Administration (SSA). 

    Related: Stolen Tax Refund Check? Here’s How To Get Your Money Back

    7. Hackers can post embarrassing posts on your social media accounts 

    If hackers get access to your email or online accounts, they can use them to run other scams. 

    Social media identity theft is especially common on sites like Snapchat, Facebook, and Instagram. Cybercriminals use your identity to phish for credentials from your friends and family. They might even ruin your reputation by posting obscene or profane content.

    Scammers could even look for sensitive photos and videos in your account and use them to extort you. This type of identity theft can be emotionally devastating. Be sure to always protect your social media accounts with strong passwords and multi-factor authentication. 

    8. You'll spend time and money recovering your identity

    By some reports, it can take six months and 40 hours of work to recover from identity theft [*].

    As you try to clear your name and secure your accounts, you’ll have to:

    • Call your bank, lenders, and any other creditors.
    • Call all companies that were impacted by the fraud. 
    • Secure every online account you have. 
    • Replace your stolen wallet, driver’s license, and Social Security card.
    • Cancel all your bank accounts and cards, and get replacements. 
    • Deal with criminal charges that were made under your name. 
    • Remove malware and viruses from your devices.
    • And so much more…

    At every step of the way, you’ll also need to prove your identity and show that it was stolen. 

    It can be exhausting. But if you don’t change or fix every compromised piece of your PII, identity thieves will always have a way in. 

    Every Aura customer gets access to a team of White Glove Fraud Resolution specialists. These professionals are available 24/7 to walk you through the steps of identity theft recovery. When needed, they’ll even facilitate three-way calls with you and your bank or other agencies to expedite the recovery process. 

    Aura White Glove Fraud Resolution specialists
    [Source: Aura White Glove Fraud Resolution specialists]

    9. You could experience psychological harm and emotional distress 

    Identity theft is typically a traumatic experience. Criminals have no regard for your emotional well-being and can cause you serious fear, worry, and stress as they pull off their scams and leave you with the arduous task of repairing the damage.

    In a recent study conducted by the Identity Theft Resource Center (ITRC), researchers found that, in the wake of identity theft, 77% of participants reported increased stress levels while 55% also experienced fatigue or decreased energy. 

    Many participants also reported trust issues with their friends, families, and work colleagues. 

    10. You could become a victim of repeat identity theft and fraud

    If your identity has been stolen once, you’re at a higher risk of it being stolen again. 

    The ITRC reported that 30% of victims of identity theft are repeat victims. And over 20% of them lost more than $21,000 throughout multiple attacks. 

    This is what makes identity theft so dangerous. As more of your data becomes available to criminals and hackers online and on the Dark Web, it gets harder to keep it private and secure. Plus, it’s not always possible to change your Social Security number — even after you’ve been the victim of identity theft. 

    Related: Aura vs. LifeLock: Which service is right for you?

    11. Scammers can commit crimes in your name

    If someone uses your identity to commit crimes (even cybercrimes), you might face legal action — even though you didn’t commit the act. 

    Criminal identity theft can be hard to track and even harder to fix — especially if a criminal used your ID during a traffic violation. 

    All Aura identity theft protection customers get access to criminal and court record monitoring. This way, you’ll know right away if your identity has been used during a crime.

    12. Your personal data could circulate on the Dark Web forever

    The number of data breaches increased 68% from 2020 to 2021 [*] with no signs of slowing down. 

    This means that any company that stores your information — from banks and credit card issuers to shopping sites, medical companies, and more — can be vulnerable to identity thieves. 

    Once your PII is leaked, it often ends up for sale on the Dark Web for as little as $1. 

    Unfortunately, that information is there forever. The only thing you can do is find out which accounts are compromised and update all your passwords and logins. 

    Pro tip: See which of your accounts are compromised using Aura’s free Identity Guard Dark Web scanner.

    Aura Identity Guard Dark Web scanner

    13. You could start receiving many more spam calls and emails

    Stolen data — especially emails and phone numbers — are sold to scammers and even unscrupulous advertisers and telemarketers. Once your identity is stolen or your accounts are compromised, you’ll start to get more and more spam emails, robocalls, and scam messages.

    14. Your children or elderly parents could have their identities stolen

    Finally, identity theft doesn’t just happen to you. Children and the elderly are common targets because they’re less likely to monitor their credit and more likely to fall for scams and social engineering attacks. 

    Child identity theft is a growing problem, with 1.25 million victims of child identity fraud last year alone [*].  

    Identity thieves use your children’s clean SSNs and credit scores to take out fraudulent loans and credit cards. In some cases, the "criminal" is even another family member who uses their child's identity to open a credit card in their name. Most lenders don’t verify ages. So, you’ll only find out about the fraud years later when your children apply for student loans or drivers licenses.

    With Aura’s Family Plan, you can add up to five people to your account — including adults and children. This way, your whole family is protected against identity theft. 

    Aura family protection plan
    [Source: Aura Family Identity Theft Protection Plan]

    How Criminals Steal Your Identity

    For any of these dangers of identity theft to become a reality, criminals need access to your PII. So, how do they get it? 

    Identity thieves utilize a vast assortment of scam tactics designed to access your personal data, including: 

    • Stealing your wallet, ID, or mail that contains personal information.
    • Using a change-of-address scam to reroute sensitive mail to their address.
    • Sending phishing emails, texts, and calls to trick you into giving up your information. 
    • Buying your personal data off the Dark Web after a data breach. 
    • Hacking your email inbox or intercepting your data on an unsecure Wi-Fi network.
    • Convincing you to click on a link or download an attachment that installs malware. 
    • Using social engineering attacks like romance scams or baiting.
    • Shoulder surfing your credentials or log-ins while you’re in public. 

    Identity theft is the fastest growing crime in America — An identity is stolen every two seconds [*]. 

    Criminals are always finding new ways to attack you and steal your identity. So, what do you do if you’ve been the victim of identity theft?

    Are You the Victim of Identity Theft? Here’s What To Do

    Identity theft happens. But the faster you recognize the warning signs of identity theft, the faster you can shut down criminals and prevent fraud. 

    Here’s what to do if you’ve been the victim of identity theft:

    1. Contact your identity theft insurance provider (if applicable). They’ll walk you through the next steps and take care of much of the work involved in recovering from identity theft.
    2. Call your bank and credit card company. Alert them of the fraud so they can close accounts and freeze fraudulent transactions.
    3. Contact any company at which you know identity theft and fraud have occurred. Ask to talk to their fraud department and explain the situation.
    4. Place a fraud alert with any of the three major credit bureaus. You only have to contact one. They’re legally required to alert the other two about the fraud.
    5. Check your free credit report at AnnualCreditReport.com. Look for fraudulent accounts, hard inquiries, or debts you didn’t take out. 
    6. File an official identity theft report with the FTC. Head to identitytheft.gov and follow their instructions.
    7. Contact your local law enforcement and file a police report. This can be a requirement for fixing criminal identity theft and other effects of identity theft.
    8. Secure your online accounts. Update your passwords, set up a password manager, and enable two-factor authentication. You might also want to sign up for a VPN with malware and phishing protection.
    9. Replace any lost or stolen IDs. Get a replacement driver’s license, passport, and Social Security card. Store your new documents in a secure location.
    10. Sign up for identity theft protection. Aura monitors your online and financial accounts for signs of identity theft. We’ll alert you 4X faster than the competition about any signs of fraud. Plus, every member of an Aura plan is covered by a $1,000,000 insurance policy for eligible losses due to identity theft. 

    The dangers of identity theft are far-reaching. But with the right protection and support, you can prevent fraudsters from stealing your identity and ruining your reputation and credit. 

    Ready for ironclad identity theft protection? Try Aura 14-Days Free.

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    1. Financial identity theft and fraud
    2. Medical identity theft
    3. Child identity theft
    4. Elder fraud and estate identity theft
    5. “Friendly” or familial identity theft
    6. Employment identity theft
    7. Criminal identity theft
    8. Tax identity theft
    9. Unemployment and government benefits identity theft
    10. Synthetic identity theft
    11. Identity cloning
    12. Account takeovers (social media, email, etc.)
    13. Social Security number identity theft
    14. Biometric ID theft
    15. Crypto account takeovers