By Ayesha Haider, BA, MBA, AFC Candidate
Despite the attention that identity theft has received over the past few years, many of us still view it as a minor crime that happens once in a blue moon. While we take measures to protect ourselves from burglary, theft and other more “threatening” crimes, many Americans lack the awareness or resources to protect themselves from having their identities stolen. The Identity Theft Resource Center reports that financial identity theft is the most common type of theft, followed by government and medical identity theft. Furthermore, a 2015 Gallup poll reported that while the incidence of credit card fraud in 2015 declined by 5% last year, the incidence of identity theft among Americans increased by 4% and that 16% of individuals interviewed had been victims of identity theft. Identity theft has been called the fastest growing white collar crime in America by the Office of the Inspector General and, with more than 1 in 10 Americans being targeted, it is crucial for you to learn how identity theft can affect you and your family.
- Your Credit Report/Score: The financial consequences of having your identity stolen are far-reaching and may have long-term implications. A thief can use your identity to apply for credit, open additional accounts and access a host of other financial resources. These activities can impact your credit report – a resource that is used by employers, insurance agencies, and potential lenders to assess your financial well-being.
- Access to Credit: Identity theft can have a long-term effect on your credit score if the thief obtains new loans or accounts under your name. Your credit score is used by banks and other institutions to assess your suitability for a loan and also to determine what interest rate to charge you. Frivolous activity on your account as a result of identity theft is likely to result in your being denied access to funds, or in your being charged a higher interest rate.
- Bank account: Given access to a few key pieces of personal information, an identity thief can obtain access to the funds in your checking, savings and investment accounts. Your funds can be used to purchase goods, obtain cell phones or utilities in your name, or the funds can be drained from your account.
- Terrorism: While the relationship between identity theft and terrorism may seem a bit far-fetched, the reality is that identity theft has played a major role in many terrorism incidents, including 9/11. Nefarious individuals can use your identity to create fake IDs that allow them to cross borders undetected, or purchase resources in your name that cannot be traced back to them.
Identity theft is slowly but surely becoming the most common white collar crime of our time. The above list addresses just a few of the ways that you and your family can be impacted by having your identity stolen. Be proactive in protecting yourself and your assets against identity theft by following these 10 simple steps.
For more ways to prevent becoming a victim of identity theft, join our March 15 webinar, Identity Theft: How to Reduce Your Risk with Dr. Barbara O’Neill and Carol Kando-Pineda, Counsel in the FTC’s Division of Consumer and Business Education division.