This Is How Criminals Steal Your Identity
Identity theft is a terrifying experience. In a matter of minutes, a thief can break into your email, medical files, credit cards, and bank accounts.
There’s a new victim of identity theft every 6 seconds in the U.S. [*] — a rate that’s doubled in just the last few years. Unfortunately, that means there's a good chance identity theft will happen to you or someone you know.
With stats like this, it might feel impossible to prevent identity theft. But once you understand the types of identity theft criminals use, you can start to build up your defenses.
Here, we’ll cover the 15 most common types of identity theft and how to protect yourself from each one.
How Bad Is Identity Theft in 2022?
Identity theft is when a criminal collects and uses your personal data to commit fraud and other crimes.
For example, a thief could buy your Social Security number on the Dark Web for as little as $2. With it, they can apply for a new credit card or open loans in your name, and leave you with the bill.
In 2021, identity thieves stole $5.9 billion from Americans, with victims losing an average of $500 [*].
And the problem is only growing. Reports of identity theft grew 25% from 2020 to 2021 alone, making it the number one complaint received by the Federal Trade Commission (FTC).
So, how are criminals targeting you for identity theft?
The Top 15 Types of Identity Theft To Be Aware Of
- Financial identity theft and fraud
- Medical identity theft
- Child identity theft
- Elder fraud and estate identity theft
- “Friendly” or familial identity theft
- Employment identity theft
- Criminal identity theft
- Tax identity theft
- Unemployment and government benefits identity theft
- Synthetic identity theft
- Identity cloning
- Account takeovers (social media, email, etc.)
- Social Security number identity theft
- Biometric ID theft
- Crypto account takeovers
1. Financial Identity Theft and Fraud
Financial identity theft is when criminals illegally access your bank and credit card accounts or defraud you in another way.
Once a criminal has access to enough of your personally identifiable information (PII) — such as your account numbers or credit card number — they can do all sort of financial damage, such as:
- New account fraud. This is when criminals open new banking, credit, or debit card accounts in your name. They use your good credit history to run up fraudulent charges.
- Mortgage fraud. With enough of your information, a thief can steal your home equity through a fraudulent line of credit (HELOC) or a reverse mortgage scam.
- Loan fraud. Criminals will also use your financial information to take out fraudulent loans or lines of credit in your name
- Credit card fraud. Even if a criminal doesn’t have your physical credit card, they can make fraudulent purchases online. Or, they can create a “cloned” version using your credit card information.
Financial fraud from identity theft can seriously damage your credit score and sometimes take years to recover from.
- Unexpected or strange charges on your credit card
- Hard inquiries to your credit report you don’t recognize
- Your credit card numbers have been stolen
- Calls from debt collectors about purchases you didn’t make
- An unexplained drop in your credit score
- Being locked out of your online bank account
What to do: Credit monitoring is the best way to protect yourself from financial fraud and help prevent credit card fraud. You can access a free annual credit report from the three credit bureaus (Experian, Equifax, and TransUnion) at AnnualCreditReport.com.
For extra protection, consider a credit monitoring service that will monitor your accounts for you and alert you of fraud. Aura automatically tracks all credit and bank account purchases, new accounts, and activity on your credit report. We'll alert you of suspicious activity up to 4X faster than the competition.
In the case of all forms of identity theft, you should file a report with the FTC at IdentityTheft.gov as well as with your local law enforcement.
2. Medical Identity Theft
Medical identity theft is when criminals use your personal information to receive medical services under your name, illegally buy prescription drugs, or use your health insurance benefits.
For example, a thief could pose as you and use your stolen health plan information to get treatments or even surgery. You won’t know about it until a bill comes in the mail. Even worse, the fake treatments become part of your permanent medical records. This could cause you to get misdiagnosed or miss out on urgent medical care.
Medical identity theft is one of the most costly types of identity theft out there. Two-thirds of victims report losing over $13,500 [*].
- Strange medical bills for procedures or treatments you didn’t have
- Unexpected medical equipment showing up at your home
- Mistakes or unexpected entries in your medical record
- Receiving a change-of-address notification from your insurance provider
- Being denied insurance claims because your benefits are used up
What to do: Keep your medical and health insurance information secure. Treat these in the same way you would your SSN. Whenever you get a bill, thoroughly review the explanation of benefits (EOB) for strange entries.
📚 Related: What Can a Scammer Do With Your Medicare Number? →
3. Child Identity Theft
Children have become prime targets for identity theft in recent years. A 2021 study found that one in 50 children were victims of identity theft in the past year [*].
Child identity theft happens when someone fraudulently uses the identity of a minor. But what can a criminal do with a child’s identity?
For one, children have clean Social Security numbers (SSN). If a criminal steals your child’s identity, you’ll only find out years later when they apply for a driver’s license or student loan.
Sadly, 60% of child identity fraud victims know the perpetrator personally [*]. The thieves take advantage of their access to the child’s sensitive information and use it for personal gain.
- Your child already has a credit report
- Your child starts to receive credit card offers in the mail
- Your child gets a letter from the IRS claiming unpaid taxes
- Your child is denied government benefits
What to do: Teach your children early on to keep their personal information safe and not share it with anyone. You should also keep their SSN secure and not give it out to companies. For added protection, consider a Family Identity Theft protection plan.
4. Elder Fraud and Estate Identity Theft
Elder fraud is when criminals prey on senior citizens and steal their identities. While estate identity fraud — also known as "ghosting" — is when a thief uses the personal information of a deceased person. In both cases, the victim is less likely to be actively monitoring their credit and personal data.
In the case of elder fraud, most identity thieves directly target their victims over the phone, email, or mail. Once they find a mark, they keep the scheme going as long as possible.
- An elderly loved one changing their habits or reducing their spending
- Complaining about lost money on “investments” or insurance scams
- Unexplained charges on their credit card statements
- Missing money from their bank accounts or retirement savings
- Tax documents arriving for a family member who is deceased
- Debt collectors calling for someone who is deceased
What to do: Regularly monitor the finances and SSN of your elderly family members. With Aura, you can include up to 5 adults on a family identity theft plan. Each adult is also covered by a $1,000,000 insurance policy for eligible losses due to identity theft.
5. “Friendly” or Familial Identity Theft
Familial — or “friendly” — identity theft is when a family member or close friend uses your identity without your permission. You might not think so, but if your child or parent uses your credit card (or opens a new credit card in your name) without your permission, that’s fraud.
Some studies show that 30% of all identity theft perpetrators are family members [*]. But this number is most likely under-reported due to families not wanting to press charges.
- Missing physical credit cards
- Strange charges on your credit card or funds missing from your bank account
- Family members being added to your bank accounts without your consent (or other bank scams)
What to do: Try to resolve the matter yourself. Most families don’t want to take their issues to criminal court. But in order to resolve identity theft and fraud, you’ll have to file a police report against the thief – even if you’re related.
6. Employment Identity Theft
Some criminals use your identity to get a job — especially if they aren’t legally able to work in the U.S. or want to avoid background checks.
This might seem like a more harmless form of identity theft. But multiple employment records can cause issues with your credit, Social Security benefits, and taxes. Plus, if the other “you” gets in legal trouble, you might find yourself with a warrant out for your arrest.
- Tax forms (W-2 or 1099) for a job other than your own
- Your Social Security Statement shows more income than you earned
- You’re denied unemployment benefits due to wages you didn’t earn
- The IRS contacts you saying you may be the victim of employment ID theft
What to do: Monitor your SSN and tax forms for any unexpected changes. If someone files a fraudulent tax return using your identity, fill out an Identity Theft Affidavit and mail it with your tax return.
7. Criminal Identity Theft
Criminal identity theft is when someone gives law enforcement your credentials instead of their own. For example, if someone gets arrested and uses your stolen driver’s license or state ID card. As a result, you can be held responsible for a thief’s crimes.
- An unexpected warrant out for your arrest
- Receiving a requirement to show up in court for an offense you didn’t commit
- Harsh citations for minor traffic violations
What to do: Sign up for an identity theft protection service like Aura that will monitor your public records. This way, you’ll be alerted if anyone has committed crimes under your name.
If you’re the victim of criminal identity theft, file an FTC report at IdentityTheft.gov. Then, contact the law enforcement agency, court, or DMV where the offense is being dealt with. Make sure you ask for a letter of clearance once your innocence has been established.
8. Tax Identity Theft
Tax identity theft is when a fraudster files a falsified tax return under your name. Most likely, they’ll claim bogus income and try to receive a large refund from the IRS.
Identity thieves can commit these tax refund scams. But it’s also common for “ghost” tax preparers to steal your identity or modify your return after you leave their office.
- Scammers calling you pretending to be from the IRS
- Receiving unfamiliar tax documents, forms, or transcripts
- Your tax preparer doesn’t sign your return or can’t explain discrepancies
- The IRS says you’ve already submitted your tax return for the year
What to do: If someone has filed taxes under your name, you’ll need to fill out an official IRS Identity Theft Affidavit and attach it to your tax return. Include any fraudulent documents you’ve received as well.
9. Unemployment and Government Benefits Identity Theft
Benefits programs like unemployment or the pandemic Paycheck Protection Program (PPP fraud) are hot targets for criminals.
A fraudster can use your identity to claim fraudulent unemployment benefits. Or, they might contact you claiming to be from a government agency to say you were paid too much and owe money in return.
Government benefits fraud was the number one type of identity theft in 2021, according to the FTC [*].
- You receive mail about an unemployment claim or stimulus check you didn’t request
- You’re denied benefits due to someone else already claiming them
- You receive an IRS form 1099-G showing unemployment benefits you weren’t expecting
- Your SSN was leaked onto the Dark Web after a data breach
What to do: As soon as you discover fraudulent claims, you need to report them to the state workforce agencies where the fraud took place. (The U.S. Department of Labor has a list of state fraud hotlines here.) You’ll also want to inform your employer of the situation.
10. Synthetic Identity Theft
Synthetic identity theft is when scammers combine your SSN with other information – both real and fake – to create a “new” fake identity. They then use this identity to build up a legitimate credit history and then vanish after maxing out their lines of credit, loans, and credit cards.
While it’s mostly banks that are impacted by this type of fraud, your SSN and credit report can be damaged along the way.
- New accounts on your credit report
- Mail or notifications from unfamiliar lenders
- Receiving documents with your SSN but not your name
- Your SSN is available to hackers on the Dark Web
- Any other sign of financial identity theft
What to do: If you suspect you’re a victim of synthetic identity theft, you should immediately freeze your credit with the three bureaus. This will stop scammers from doing further damage. Then, report the fraud to the FTC at IdentityTheft.gov and ReportFraud.ftc.gov.
11. Identity Cloning
Most identity thieves want your data for a one-time fraud. But with identity cloning, the thief establishes their own identity using your information over the long term. This allows them to seemingly erase their past — such as criminal convictions or bankruptcy — and avoid scrutiny.
Identity cloning is one of the most challenging types of identity theft to track, since the thief may be living an average, law-abiding life.
- Multiple addresses associated with your name
- Fraudulent charges and accounts on your credit report
- Earnings you didn’t make on your Social Security Statement
- Unfamiliar criminal charges under your name
What to do: Identity cloning can be a nuisance or a serious headache depending on what the criminal does under your name. As soon as you realize someone has cloned your identity, contact the FTC and local law enforcement. Often, criminals target someone they intimately know.
12. Account Takeovers (Social Media, Email, Etc.)
Account takeover fraud is when a thief steals your login credentials and changes the password so you can’t log back in. The thief will then drain the account’s assets or use your account to run scams.
For example, a criminal could run a Snapchat scam where they take over your account and contact your friends asking for money.
- You’re locked out of your accounts
- Strange emails about password resets or 2FA codes you didn’t request
- Friends and family asking about posts you didn’t make
- Log-in alerts from different IP addresses or devices
What to do: If you can still get into your accounts, change your passwords and security questions. Make sure you use a secure password and enable two-factor authentication (2FA) using an authenticator app like Google or Okta. You might also want to consider a password manager for keeping track of your sign-in information.
13. Social Security Number Identity Theft
Your Social Security number (SSN) is a golden ticket for identity thieves. It’s often the one piece of information that can unlock all other types of identity theft — from medical benefits to credit card fraud.
Unfortunately, while we all know the importance of keeping our SSN secure, they’re often targeted by hackers who commit data breaches. This means your SSN could be compromised without your knowledge.
- Suspicious activity on your Social Security Statement
- Unfamiliar loans or credit inquiries on your credit report
- Benefits taken out in your name
- Any other warning sign of identity theft
What to do: Unfortunately, changing your SSN isn’t always a possibility — even after identity theft. Instead, you’ll want to monitor your SSN using a service like Aura. Or, consider an SSN freeze or block to add an extra step before someone (including you) can use your number. Always keep your physical Social Security card safe and at home.
14. Biometric ID Theft
If your password is hacked, you can change it. But if hackers collect your fingerprints or facial recognition data, you become particularly vulnerable. Biometric ID theft (also known as fingerprint identity theft) is when hackers steal the unique physical attributes you use to secure your bank account or device.
- Lost or stolen devices
- Notifications of a data breach from a company that stores your data
- Your sensitive information is available to hackers on the Dark Web
What to do: Look for data breach notifications from companies that are storing your biometric data. An identity theft protection service like Aura can also alert you if your accounts have been compromised or your data is available on the Dark Web.
If this is the case, set up an authenticator app like Google or Okta. This adds an extra layer of security for logging into bank accounts and other sensitive accounts.
15. Crypto Account Takeovers
Cryptocurrency account takeovers are one of the most common emerging cyber threats. Criminals target the lack of regulation and security breaches around crypto wallets and exchanges to steal billions in cryptocurrencies like Bitcoin and Ethereum. Crypto scammers stole a record $14 billion in 2021 [*].
- Unapproved transactions going out of your crypto wallet
- You can’t sign into your crypto accounts
- Notifications of crypto transactions you didn’t approve
What to do: If your wallet or exchange accounts have been hacked, create new ones and try to transfer your funds as soon as possible. You can also try quickly changing your passwords and enabling 2FA to lock-out the hacker. Reach out to the relevant exchanges to let them know what’s going on.
How Do Criminals Steal Your Data to Commit ID Theft?
Every type of identity theft relies on criminals getting access to your personally identifiable information (PII). So, how does that happen?
A few of the most common ways identity theft happens include:
- Purchasing your data on the Dark Web. Data breaches have leaked billions of pieces of data to identity thieves online.
- Tricking you with phishing phone calls, texts, and emails. Scammers will call, text, or email pretending to be an official agency like the IRS or FBI and ask you to “confirm” your details. Always verify who you’re talking to by contacting the agency directly.
- Using social media scams. A fraudster will target you on social media sites with phishing attacks or pose as a friend and ask for help with their account.
- Posting fake job listings. An identity thief will post fake job listings to sites like LinkedIn. But as part of the application process, they’ll ask for your SSN and other personal information.
- Hacking your Wi-Fi. Public Wi-Fi is notoriously unsafe to use. Hackers can use a man-in-the-middle attack to intercept any data you send, including passwords and usernames.
- “Formjacking” on sites you use. Criminals use cyber attacks against unsecured websites to steal any info you submit on a form. Make sure any site you submit personal information on is “secure”. This means they use https not http and have a padlock symbol near the URL.
- Installing Malware on your devices. Many scammers send links or attachments that hide malware or other viruses. These can steal your sensitive data from your devices or even read your keystrokes. Protect your devices with antivirus software and malware protection.
- Romance scams. Identity thieves use online dating sites to trick you into sending them personal information or money. For example, a military romance scam where fraudsters pose as active service members.
- Tech support fraud. Especially for older people, some scammers pretend to be tech support and get access to their devices. For example, the recent rise in Best Buy Geek Squad scams.
- Stealing your mail or wallet. Identity theft can also come from physical theft. If a criminal steals your wallet or mail, they can get access to your most sensitive information.
Did You Fall Victim To a Type of Identity Theft? Do This Now
If you’ve lost money or are the victim of identity theft, contact the FTC at IdentityTheft.gov and file a police report with local law enforcement. Then, you’ll have to start the process of disputing charges, fixing your records, and rebuilding your credit.
Recovering from identity theft can take months or even years. But Aura is designed to proactively protect you from identity theft and financial fraud.
With Aura, you get:
- Financial fraud protection. We’ll monitor your credit and bank accounts in near-real time and alert you of fraud 4X faster than the competition. Plus, you can instantly lock your Experian credit file with one click.
- Identity theft protection and online account security. We’ll tell you if an account has been compromised, monitor your SSN for fraud, and reduce the spam calls you receive.
- Device and Wi-Fi protection for all your devices. This includes a VPN with military-grade encryption and malware protection.
- Family identity theft monitoring for up to 5 people including children and adults.
- $1,000,000 in coverage for eligible losses due to identity theft. If the worst happens, we’ll be there to walk you through securing your identity and getting back on your feet.