One of the most popular television shows of the last ten years was Mad Men. The show’s main character was an advertising executive named, Donald Draper. However, Donald Draper was not really Donald Draper. He was actually Dick Whitman. How did Dick Whitman become Donald Draper? Well, essentially, Dick Whitman stole Donald Draper’s identity.
According to a United States Department of Justice study, in 2017 the direct and indirect cost related to identity theft was estimated at $16.7 Billion. In 2014 approximately 17.6 million people, or about 7% of the US population, were affected by Identity Theft. The Consumer Sentinel Network, maintained by the Federal Trade Commission (FTC), reported that of the 2.7 million identity theft and fraud reports received in 2017, 1.1 Million were fraud related costing consumers almost $905 Million. 51.9% of fraud cases reported in 2017 were related to identity theft.
What constitutes, Identity Theft and how are people managing to lose their identities? Referring back to our friends at the Consumer Sentinel Network identity theft constitutes “online shopping and payment account fraud, email and social media fraud, medical services fraud, and insurance and securities fraud. Other types of identity theft include credit cards, opening of new accounts (29.5%), tax fraud including employment tax (17.6%), phone or utilities fraud (7.4%), bank fraud involving loans or leases, checking and savings accounts, deposit accounts, debit cards and securities accounts (10.8%), and government documents or benefits fraud (3.2%).
In 2017 there were 7920 data breaches affecting over 1 Billion records that had led to identity theft according to The Identity Theft Resource Center. A data breach involves the unauthorized access of consumer data on computer systems. There have been numerous cases reported over the last several years. Retailers such as Target, Michaels, Home Depot and Barnes & Noble have fallen victim to data breaches that exposed their customers credit card information.
Looking back to 2012, $4 Billion in fraudulent tax returns were reported by the Internal Revenue Service (IRS) affecting 770,000 tax payers. Fraudsters are able to procure social security numbers and names of unsuspecting tax payers either through the dark web, phishing tactics, malware or their own hack into the IRS back in 2016. 700,000 taxpayer identities were exposed to hackers through the “Get Transcript” program on the IRS website. The hackers used personal information gathered through online resources to answer personal identity questions that allowed them access to the secure IRS site. Oftentimes, the identity theft was not uncovered until the victim went to file their own tax return, which the IRS rejected because it was a duplicate filing. The hassle to the honest tax paying public is they now must prove who they are, and file additional paperwork and identification when filing their government required tax return.
In 2014 medical related identity theft cases rose 22% to an estimated 2.3 Million cases. While prescription drug purchases are the most common identity theft related fraud, there have also been widespread reported cases involving surgeries, medical devices and equipment, insurance claims and the acquisition of government benefits such as Medicare or Medicaid. While the obvious affect of personal costs to a victim is evident, there is more at stake. Medical related identity theft fraud can affect a victim’s medical treatment history causing mix ups in diagnoses and electronic health records.
Obviously, much of what we discuss in identity theft relates back to financial fraud. With the rate of stolen credit card information from hacking and skimmers it is fairly common to receive the notice that your credit card was hacked, and you are now responsible for fighting fraudulent charges. Oftentimes, banks will even notify you of the fraud prior to you even noticing on your own. Because of the Fair Credit Billing Act your money is for the most part protected. However, there is still the hassle of having to notify the bank, work with the bank, cancel stolen cards, get replacement cards, notify any autopay vendors and update your information, etc. It is a time-consuming process.
At this point preventing identity theft is pretty much impossible. Chances are, your information is already out there, and it is just a matter of time before you become a victim. However, there are a few things you can do to protect yourself, which may limit your vulnerability to identity theft.
If you are entering your debit card personal identification number (PIN) at the grocery store or ATM, watch out for “shoulder surfers”. Purchase and use a paper shredder for sensitive documents. If not depositing your trash directly in your local transfer station or waste management facility, break up the documents into different trash receptacles or make them available for pickup on different days. If disposing of an old computer, break it apart, smash the hard drive, and again deposit the contents into different trash receptacles or spread out the pickup over different days. Mail your payments via a secure mailbox and receive your mail via a locked mailbox that only you can access. Use 2 factor authentication for email and bank account access. Analyze your credit report annually and check your online bank account often enough to confirm all transactions are valid. These are just a few suggestions that may help protect your personal information.
While we sometimes wish we were someone else, we often do not wish that someone else was us. Most of us work hard to provide for our families, create our “personal brand” and overall be responsible contributing members of society. Identity theft can strip all that away from us and cause us headaches that last for years to come.