Identity Theft and It's Consequences
The Federal Trade Commission (FTC) received more than 1.4 million reports of identity theft in 2021. Identity thieves usually have varying motives, and all are usually criminal. Unfortunately, the consequences of these criminal activities usually befall the person whose identity was stolen rather than the identity thieves.
What is Identity Theft?
Identity theft is when someone uses your personal identifying information without your permission, usually for fraudulent purposes. Personal identifying information can include any of the following details:
Your names.
Social Security Number.
Bank account numbers.
Credit card numbers.
Home address.
Passport number.
Driver's license number.
An identity thief's actions can impact your life in various ways. Here is an overview of four damages that an identity thief can do:
1. Financial Fraud
Financial fraud is the leading cause of identity theft – about 47% of Americans were victims of financial fraud in 2020. Most identity thieves will try to use your personal information to obtain money under false pretenses.
Credit card fraud is the most common type of financial fraud associated with identity theft. It occurs when someone uses your personal identifying information to open and use credit cards. Credit card fraud accounted for almost 400,000 of the 1.4 million identity theft reports in 2020.
Besides opening credit cards in your name, an identity thief can also use your information to commit bank fraud. For example, they can use counterfeit checks in your name, open fraudulent bank accounts, take out loans, or steal and use your personal ATM (that you opened yourself) to make unauthorized purchases.
2. Government Fraud
The government provides financial benefits and assistance to citizens under various circumstances. Government fraud is a broad subject – in this case, it is where an identity thief uses your personal identifying information to fabricate such circumstances and obtain money and other benefits from the government. The most common and significant cases of government fraud using stolen identity include making false claims, procurement fraud, and Medicare fraud.
3. Racking Up Utility Charges
Utility companies identify and bill their customers based on their personal identification information. Utility fraud is when someone else uses your personal information to open utility accounts and request utility services in your name, saddling you with the bills. Utility fraud usually involves common utilities such as gas, power, and water – cable TV is the most common type of utility fraud.
4. Criminal Activities
Some identity thieves can obtain IDs, driving licenses, and other official identification documents using your name and other personal identifying information. Essentially, the government recognizes them as you, so you will be on the hook for everything they do, including criminal activities. For example, a hit-and-run accident involving a car registered under your name through a fraudulent driver's license can lead the police to your door.
Take Control of Your Finances!
Financial fraud is the leading cause of identity theft, and it usually ruins the victims' credit scores and saddles them with huge debts. Fortunately, you can regain control of your identity and restore your credit score with the help of the National Financial Credit Group (FCG). Our goal is to help you understand and rebuild your credit. Call us on 1-800-431-0449 or reach out to learn more!