Imagine waking up one day to find that there is a bungalow 5,000 miles away, in your name, being foreclosed. Or getting a call from a debt collection agency nagging you to repay a $200,000 loan that you never took out.
Identity theft is real and is becoming a prevalent problem within the US.
Studies show that around 33% of US adults have experienced some form of identity theft. And the identity fraud tide is growing.
As more people continue to work from home, experts predict that 1 in every 4 people in the US will fall victim to this growing crime trend. But what’s the reason behind the ever-increasing identity theft cases? Keep reading to find out.
1. Chaos Caused by COVID-19
Along with the loss of millions of lives and the widespread economic turmoil, the COVID-19 era has been marked by a slew of financial frauds, including identity theft scams.
Data from the Federal Trade Commission (FTC) show that 58,733 identity theft complaints related to COVID-19 were filed in 2020. Unfortunately, opportunistic fraudsters are taking advantage of the ongoing global health crisis to defraud unsuspecting people and steal their personal information.
Hackers are using the stolen identities to collect treatments for fake COVID-19 treatments. Others are tricking Americans into donating to fake COVID-19 charities. According to a new report from the FTC, Americans have lost a whopping $145 million to COVID-19 related fraud.
2. Rapid Move to Online Shopping
The rapid move to online shopping has its fair share of benefits and drawbacks.
For instance, the pandemic has caused card-not-present (CNP) transactions to increase dramatically, accounting for 27% of all debit transactions. Unfortunately, this has led to a surge in CNP fraud, with Aide Group projecting a 16.4% increase in CNP fraud this year.
With so much stolen consumer data on the black market and given the difficulty merchants encounter when attempting to validate consumers’ information, CNP transactions provide the perfect opportunity for theft.
However, you can get the best protection from identity fraud by safeguarding your physical cards—credit cards and debit cards. For added protection, it’s advisable to enroll in a credit monitoring service that offers dark web monitoring.
3. Advent of New Marketplace Platforms
The advent of new, less monitored marketplace platforms has also contributed to the rise of identity theft cases. New marketplace platforms offering e-commerce functionalities have been popping up everywhere—making them easy targets for identity thieves.
From food delivery platforms to social networking sites to dating apps—the new marketplace platforms are changing the e-commerce game. And with many of these platforms supporting mobile commerce (M-commerce), fraudsters are having a field day, working their tactics around mobile applications and targeting unsuspecting users.
4. Identity Thieves are Becoming Smarter
Identity thieves have upped their game, staying ahead of the current world trends and changes rather than focusing on the old tactics.
For example, identity thieves are using the ongoing global COVID-19 health crisis to execute their fraudulent plans.
A typical case scenario is where the scammer contacts their victim via email and tells them the government requires them to take a COVID-19 test or vaccine and that the cure is available.
As part of the scam, the fraudster will ask for the victim’s personal and health insurance information, including date of birth, Medicare data, and social security number, failure to which they may have to bear the costs incurred.
The scammer will then use the provided information to create a synthetic identity, or perform other fraudulent activities in your name.
The Final Thoughts
Identity theft is a growing problem and one that you should be concerned about. While you’re unlikely to find a fail-safe way to prevent identity theft, there are things you can do to make it hard for scammers to get hold of your sensitive information.
These include safeguarding your social security number, checking your credit reports regularly, shredding documents containing personal information before disposing of them, and enabling two-step verification on all your devices and accounts.