Identity theft and identity fraud are two terms often used interchangeably to describe the use of someone else’s personal information without their consent for criminal purposes, such as obtaining credit or financial gain. Typically, identity theft entails stealing someone’s private information for the purpose of impersonation, or identity fraud.

Because many of us store personal details and access accounts online, a lot of identity theft occurs over the internet. For the fraudster, conducting crimes online has the added benefit of never having to verify their identity in person.

However, a lot of identity theft also occurs offline. Family members and caregivers are often the culprits for identity theft against children and the elderly. Dumpster divers dig through discarded documents to discover details about those whom they defraud.

A range of crimes are classified under identity theft, including credit card fraud. But when most people think of ID theft, we associate it criminals opening up new lines of credit in the victim’s name using their Social Security (US) or Social Insurance (UK) number. Fraudsters might take out payday loans, apply for credit cards, and open new accounts using the victim’s identity.

The consequences are numerous and burdensome for victims. Their credit score will almost certainly be damaged at no fault of their own. Debtors seeking payment hound them through mail, phone, and even in person. Repairing the damage can take months.

To make matters worse, identity theft can go unnoticed for a long time, even years. This makes tracking down the culprit and assessing the crime much more difficult, which is why many people are turning to identity theft monitoring and protection services.

Am I at risk of identity theft?

Put simply, yes. Pretty much anyone can be a victim of identity theft.

Even if you are careful about protecting your information, you are not the only one holding it. Chances are, the government and businesses keep information about you stored in databases along with millions of other people. Your employer, insurers, tax preparer, credit bureaus, phone and internet service providers, tax officials, and many more all have access to your most valuable personal information.

And none of them are perfect. Data breaches of major databases pulled off by hackers are larger today than they’ve ever been, and alarmingly frequent. A criminal doesn’t need to hack your computer, break into your house, or scam you with a phishing email to find info that can be used for identity theft.

How do I prevent identity theft?

Vigilance is key to preventing identity theft. Keep a close eye on your bank account and credit card statements, and check your credit score at least once per year. Take steps to hide private information, both online and offline.

Credit reports

By law in the US, you have the right to get one free credit report every year. The official website is annualcreditreport.com. You should thoroughly scan and follow up on any activity or lines of credit that looks suspicious or unfamiliar.

A credit report is not the same as a credit score. A credit score is a number between 300 and 850 that represents your credit risk—how likely you are to pay bills on time. It is calculated using information in your credit report.

Bank account and credit card statements

It should go without saying that any unfamiliar activity on your credit card and bank statements is a bad sign. Report these to your bank immediately.

Don’t brush off small sums, either. Criminals will often hit credit and debit cards with a small charge of a few cents to check whether they are still active.

Keep your info safe

Keep your Social Security (or Social Insurance) card, birth certificate, bank account paperwork, insurance documents, tax forms, passports, and other critical documents in locked, hidden places. That’s places, with an s, because it’s also a bad idea to store all of this stuff in one location where a burglar could stumble upon it and take everything.

Thoroughly shred any paperwork with personal information on it before you throw it out.

Ask a trusted neighbor to collect your mail while you travel.

As for online information, always create strong, unique passwords for each of your accounts. Before entering any information on a website, make sure the site is HTTPS encrypted and that the domain (e.g. “comparitech.com”) matches the company name. Use a VPN if you plan on logging into any account or entering personal details on public wifi.

If you have important documents stored on your computer or smart phone, be sure to encrypt them. Check out these useful tools for encrypting files and folders, or encrypt your entire drive with a tool like Veracrypt. Don’t store the encryption key on the same device as the encrypted files.

Enable real-time antivirus such as Windows Defender or a third-party tool, and always keep your programs and operating system up to date.

Invest in identity theft protection

Several companies offer identity theft protection as a subscription-based service. These businesses monitor your credit, bank accounts, credit cards, and other finances for unusual activity. Many of them also monitor the internet and dark web for your information so you can take proactive steps to prevent ID theft ahead of time. Most offer some sort of insurance or compensation to help with legal fees.

While these services can be useful, they are not for everyone. You can accomplish much of what ID theft protection services offer on your own, so long as you’re disciplined about checking your credit report and accounts regularly. We recommend ID theft protection services most to people who have previously been victims of identity theft because they are at a higher risk of being defrauded again.

Best identity theft services

Several reputable companies offer identity theft protection services. Here are a few to consider:

  1. Identity Force – Although it’s on the expensive side, Identity Force offers comprehensive protection and monitoring of a wide range of info. It’s packed into an easy-to-use web dashboard. Identity Force monitors black markets for your information. You can customize alerts for charges, withdrawals, and transfers. Restoration experts will help you with the paperwork to cancel and replace cards. A $1 million insurance policy compensates you in the event of identity theft.
  2. Identity Guard – Comes in three tiers of protection starting with account and card monitoring, alerts, and victim assistance. Monitors the web and black market for misuse of your personal info. Will help cancel and replace lost or stolen cards. Includes a password manager. Higher tiers include credit reports and scores. The highest tier monitors address changes and public records.
  3. Trusted ID – Includes credit reports with the basic tier. Offers family plans and a free trial. Monitors the web and darknet for your information. Helps replace cards in the event of a lost or stolen wallet. Can help you set up fraud alerts on your credit report. $1 million insurance policy for out-of-pocket expenses related to identity theft. Removes your name from marketing databases to cut down on junk mail and phishing.
  4. LifeLock – Basic tier includes fraud alerts, lost wallet protection, 24/7 support, reduced junk mail, and a $1 million protection package. Higher tiers include court records scanning, data breach notifications, an annual credit report, and account activity alerts. Fictitious identity monitoring scans look for people building a fake identities based on your info. Top tier includes file sharing network scans, account takeover alerts,  investment account monitoring, and credit inquiry alerts.
  5. Intelius Identity Protect – Includes one free annual credit report from Transunion, web monitoring, bank account protection, and address and phone number monitoring. Includes a $1 million insurance policy to cover damages incurred from ID theft. Extensive public records monitoring. Restoration experts are available 24/7 to help cancel cards, contact police, and resolve fraud disputes.

What do I do if I’m a victim of identity theft?

If you’re a victim of identity theft or think you might be, follow these steps to get back on your feet.

Fraud alerts and credit freezes

If you’ve noticed fraudulent activity on your credit report, immediately place a fraud alert on your report. This lets the major credit bureaus—Equifax, Experian, and Transunion in the US—know that someone is misusing your information, making it more difficult for thieves to open new lines of credit in your name. Businesses must contact you to verify your identity before opening an account. You only need to contact one of the major credit bureaus to set up a fraud alert, and they must alert the other two by law.

Fraud alerts last 90 days.

Another more extreme option is the credit freeze. This prevents all creditors from accessing your credit file. Note, however, that this will prevent legitimate creditors from accessing your file, so don’t do this if you are legitimately trying to open any new lines of credit.

File an ID theft report

Once you’ve locked down your credit to prevent further damage, go the the FTC and file a complaint. You can fill in the details of what happened and print out an affidavit. Write down the report number or get a copy.

Next, file a police report. Bring the affidavit and FTC report number with you. Once you have both the affidavit and police report, you can start contacting debtors.

Contact debtors

Go through your credit report and contact any of the debtors that opened up new lines of credit that you don’t recognize. Bear in mind that debt is often sold by businesses to third party bill collectors, so some of the debtors listed won’t look familiar whether they are legitimate lines of credit or not.

Explained what happened and close your accounts. Each business is different, so ask what you need to do to get refunded if necessary. You can use the affidavit and police report from the previous step to help prove your case.

Always remember to ask for a return receipt and record any communications you have with debtors, and follow up in writing.

You might also need to contact the credit bureaus to resolve any errors on your credit report.

Identity theft statistics

The 2017 Equifax hack put 143 million Americans at a high risk of identity theft when it leaked a huge trove of private information including Social Security numbers. Even before that, identity theft was a serious problem in the US and across the globe.

16.7 million people were victims of identity theft in 2017, and more than 1 million of them were children. People who are active on social media face a higher risk of identity theft than those who are not. Most identity theft complaints are from people between the ages of 30 and 59.

On a positive note, consumers seem to be getting better at quickly identifying fraud attempts. 78 percent of victims detected fraud within a week’s time. By learning more about identity theft and raising awareness about how to prevent it, you can protect yourself and your family from this growing threat.