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Identity theft has become an increasing threat to companies and their clients in recent years, impacting more organizations each day with severe legal ramifications, irreparable reputation damage, and large financial losses.
CEOs and owners can take measures to lessen this likelihood through proactive steps they can take themselves or hire outside help to minimize identity theft risk.
Businesses can protect themselves, their clients and their reputation by proactively lowering identity theft threats and creating a plan of action to address them.
In this blog, we will discuss identity theft as well as the types and strategies to prevent identity theft from taking place. So, keep reading this blog.
Identity Theft
What is Identity theft? Identity theft occurs when fraudsters gain control of an innocent individual's details, for instance, their name, date of birth, address or credit card details without their knowledge and use them to commit identity fraud by accessing their accounts to make purchases or open new ones in their name.
Identity theft is a crime that affects everyone. Still, businesses often fall prey to it as they usually possess more significant financial resources and customer data that could enable identity thieves.
Identity theft involves creating an alternate persona by forging documents under another's name such as driver's licenses and passports obtained using stolen personal data to create false evidence in someone's absence and gain entry.
It can have devastating repercussions for victims who become targets.
Victims can experience financial losses, damaged credit histories and criminal charges due to identity thieves' fraudulent activities.
Therefore, businesses need to recognize the signs of identity theft and take measures to safeguard customers and personal data.
Five Steps Explain How Identity Theft Works
Here, we have outlined the important steps for preventing identity theft:
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Gaining Access: Identity thieves may gain access to personal information by stealing wallets, mail or documents with personal data.
They could also employ tricks like phishing attacks, which involve sending emails that appear as legitimate companies asking for personal details via fake links.
- Leveraging Stolen Information: Once an identity thief gains access to someone's data, they may use it to open new bank accounts, credit cards and other forms of accounts in their name - using it for purchases, loans or even criminal activities like fraud and robbery.
- Concealing Identity Theft: Thieves can use other people's data to hide their true identities, such as using stolen driver's license numbers or other forms of IDs stolen from victims; alternatively, they could also employ false names and addresses to mask themselves from detection.
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Cashing Out: Once an identity thief has obtained someone else's data and used it to open accounts in their name, they can cash out by moving money from stolen accounts into other ones or taking out loans with stolen identities as the beneficiary.
Typically, this occurs by moving stolen money directly between accounts or taking out loans in someone else's name.
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Closing Accounts: Once identity thieves have cashed out or obtained loans using stolen information, they may close accounts to avoid detection and restart their scheme.
They could even use that stolen data to open more new ones in an ongoing cycle of crime.
Identity Theft Threat Types That Your Business Should Stay Away From
Here read out some types of identity theft:
Credit Card Fraud
One of the more prevalent types of identity theft, credit card fraud, involves the unauthorized use of someone else's credit card to purchase goods and services without their knowledge either through physical theft of card information or online acquisition through identity fraud schemes.
Victims can experience financial losses and damage to their credit scores as a result.
Tax Identity Theft
It occurs when someone fraudulently uses another's details to file their tax return and claim a refund without their knowledge, gain employment without paying taxes, and avoid the burden of filing returns themselves in future years.
Victims can experience significant financial loss as a result of tax identity theft and difficulty filing taxes themselves in future years.
Physical Identity Theft
It occurs when someone steals another individual's physical documents, such as their driver's license or passport, to access services and open accounts under their name - leading them to incur financial losses and damage their credit rating.
License Identity Theft
Driver's license identity theft involves unauthorized use of someone else's driver's license by physically taking or gathering information about it and using it illegally to gain access to services and open bank accounts under their name - potentially leading them down a path toward financial losses, damaged credit scores and legal trouble if criminal acts take place under someone's name.
Bank Identity Theft
When someone uses another person's bank account information fraudulently to gain access to funds or make purchases without their knowledge or otherwise commit bank fraud then withdraws those funds themselves or purchases in their name without authorization victims of Bank ID theft often experience substantial monetary and reputational loss as well as damage to their credit scores as a result.
Medical Identity Theft
Occurs when someone uses another's medical information to gain access to healthcare or obtain prescription drugs without authorization from that individual's consent, often by fraudulently creating new identities for themselves in their victim's name and using stolen identity details from previous theft attempts as credentials to access services or medications in his name or obtain them fraudulently in their place.
Victims can suffer significant financial loss as well as damage to their medical records as a result of this type of theft.
Synthetic Identity Theft
Synthetic identity theft occurs when someone uses both real and fake information to form a new persona to commit synthetic identity fraud to gain access to credit and services that would typically belong to someone else; victims often experience financial losses along with irreparable damage to their credit reports as a result of this crime.
Phishing Identity Theft
This occurs when someone pretends to be from an official company by sending emails or other communications purporting to solicit personal data such as passwords and credit card numbers for fraudulent use in accessing accounts or making purchases under someone's name.
Then, they use those details fraudulently themselves, resulting in financial losses and possible damage to their credit scores. Victims can experience serious ramifications resulting from this form of theft.
Account Takeover (ATO) Theft Of Identity
ATO fraud occurs when someone gains control of an existing account by changing or using stolen credentials to gain entry, making purchases or accessing services in their name without permission or incurring financial loss - often to their detriment and credit scores.
Victims can face financial damages and damage to their reputations from such activity.
Read More: Cyber Security: A Necessity or a Luxury? Debunking the Top 5 Myths with $1 Trillion at Stake
Eleven Strategies To Stop Identity Theft
Identity theft prevention may seem impossible, as monitoring services only notify of issues after something goes amiss.
But here are strategies to avoid Identity theft you can employ to make life harder for identity thieves.
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Credit Freeze: Freezing your credit at all three major bureaus Equifax, Experian, and TransUnion limits access to your records so that new credit files cannot be opened without first unfreezing.
This is completely free, and it provides added protection from identity thieves using your data for fraudulent account opening purposes.
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Keep Your Social Security Number Secure: Your Social Security number is your key to protecting personal data.
Protect it as best you can.
Whenever asked for it, inquire as to the purpose and protection measures being utilized before providing.
Don't carry around paperwork bearing this number without first shredding or securely storing it.
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Be Wary Of Phishing And Spoofing Attacks: Scammers may use calls from government entities or businesses and emails that appear legitimate to obtain your personal data.
Instead of responding directly, initiate contact from known entities, like their official websites, to initiate callbacks or return email requests yourself.
Be wary of attachments that contain malware.
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Create Solid Passwords And Include A Process For Authentication: Use a password manager to generate and store complex, unique passwords for each account; never reusing them and using authenticator apps can reduce risk.
Security questions should be used with others to keep accounts safe; quickly Googled information such as mother's maiden or pet's name should be easy too.
Be cautious about what information or clues about answering security questions could leak onto social media, reveal vital data, or provide clues that reveal key security questions answers.
- Utilize Alerts: Many financial institutions now provide alerts via text or email when transactions take place on your accounts, helping keep tabs on when credit cards are used, withdrawals made to financial accounts and deposits made into savings accounts - keeping track of when there's activity helps protect both you and your investments from surprises.
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Monitor Your Mail: Stolen mail can quickly lead to identity theft.
Consider having it held at home if you will be out for extended periods.
Invest in a lockable USPS mailbox.
Additionally, you could sign up for Informed Delivery through them, which gives you a preview of all mail coming your way so you can spot anything amiss quickly.
- Shred Your Credit And Investment Documents: Do your part by shredding any documents related to credit, banks, or investments that someone could find by digging through your garbage can, including junk mail that offers pre approved credit before throwing them away.
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Opt For A Digital Wallet: For safer online or in-store payments, digital wallets containing secure digital versions of credit and debit cards provide secure solutions for paying with tokenized and encrypted transactions at compatible checkout terminals.
Plus, they reduce health risks related to contactless transactions.
- Secure Mobile Devices: Utilize passwords on all electronic devices and prefer banking applications over mobile browsers when banking from mobile phones.
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Concurrently Review Your Credit Reports: Credit Report gives consumers access to their free credit reports every week from each major credit reporting bureau.
This allows you to check that accounts are reported properly and detect signs of fraud, such as accounts that you don't recognize, or suspicious activity, such as accounts you don't recognize being opened by credit reporting companies.
- Keep Track Of Financial And Medical Statements: Read financial statements carefully to verify every transaction is recognized, know due dates, be prepared to investigate unanticipated bills if necessary, and review "explanation of benefits" statements carefully to recognize services provided and defend against health care fraud.
How Can Identity Theft Be Reported
Identity theft should always be reported to the Federal Trade Commission to show businesses and creditors that you were victimized by someone using your details without your knowledge or consent.
You also have a legal right to place either a one or seven-year fraud alert on your credit report to remove fraudulent items, stop debt collectors from calling and stop debt collection services from reaching out.
Identity theft should always be reported if it involves you directly, such as knowing who committed the offense or finding that they used your name or information during any police interactions including pretending to be you when arrested.
Credit card companies or financial institutions might request you file such reports so they can investigate, remove fraudulent activity from accounts, or cover for the losses sustained from identity theft claims.
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Conclusion
Cyber security services inform you when your identifying data has been exposed in a data breach, stolen and used maliciously, or is at risk from misuse due to misuse by untrustworthy parties.
They can also assist victims of identity theft with cleaning up and recovering their identities potentially reimbursed at no additional costs from such activities.
If you feel you have done everything to protect your identity or don't have time, an identity theft protection service might be worth looking into.
Prices differ between services; some include additional ways of safeguarding privacy, while others offer additional services that fit within budget and offer specific coverage that matters. Cisin also allows businesses to tailor authentication methods to meet their business's individual needs, providing tailor-made solutions that protect against identity theft while safeguarding customer security.
