Identity theft consistently lands on the top three list of consumer complaints to the Federal Trade Commission and for good reason. Thanks to the Internet, it’s become easier than ever before to steal a person’s identity and thus the keys to their castle. And while Generation Xers, baby boomers and the elderly are the prime targets, millennials, with fewer assets and less credit history, aren’t immune either. In fact, because of their oversharing and often trusting nature, young adults are becoming a growing target for identity theft and fraud.
“Identity thieves often target those who are not concerned with identity theft or cannot protect themselves,” says Henry Bagdasarian, founder of Identity Management Institute. “Identity theft affects an average of 10 million people per year and sooner or later students and millennials will face challenges securing a loan or renting an apartment if their identities are stolen and go undetected for a long period of time.”
What Is Identity Theft?
Identity theft occurs when someone steals your personal information to use for criminal purposes. This may include pretending to be you to use or open accounts, file fake tax returns or conduct other activities falsely in your name.
When it comes to identity theft most people think of the traditional kind where a bad guy steals your social security card and opens up a credit card in your name. While that scam is still alive and kicking, identity theft covers a whole bunch of new scams as well.
“Identity fraud could be used when a credit or debit card number gets compromised. It could be where the information you provide to a doctor gets used for medical billing fraud, new account fraud or to commit tax identity fraud,” says John Breyault, vice president of public policy, telecommunications & fraud at the National Consumers League. “Millennials need to be aware identity fraud encompasses a wide range of different kinds of fraud and misuses of their personal information.”
For millennials or anyone for that matter, one of the best defenses is playing offense. And in order to do that, you first have to understand the type of scams you are up against. After all identify theft has been one of the top consumer complaints for the last fifteen years, according to the FTC but in 2015 imposter scams were the third most recorded complaint.
Different types of identity theft and fraud
There are many ways for scammers to steal your information. Identity theft can happen in your day-to-day dealings or during specific occasions like tax time or going to the doctor. Online identity theft has also become increasingly prevalent as more and more information is stored and shared on the Internet. Following is a list of common types of identity theft and fraud, including where they’re likely to happen and what’s involved:
Traditional identity theft: This happens when a third party gets ahold of your identifying information such as your social security card, birthdate, address, and telephone number. Armed with that information, they open up credit cards in your name, apply for medical benefits, get a driver’s license and even intercept your tax refund. While thieves have been tricking people online to get their hands on identifying information, they still adopt old school methods like sifting through your garbage or mailbox.
“Identity thieves like to create profiles on you whether getting information via social media or information laying around your home that goes into your garbage,” says Paige Hanson, chief of identity theft education at LifeLock, an identity theft company. “When it comes to online versus offline identity theft can happen to anyone, anywhere at any time.”
Medical fraud: At most doctors’ offices around the country new patients are required to fill out a litany of paperwork asking for all sorts of information including their social security number. That identifying information may be necessary to bill your health insurance provider, but if it falls into the wrong hands, it can also result in medical fraud whereby a thief uses your name or health insurance information to see a doctor, get prescription drugs or even file claims with your insurance provider.
Tax refund fraud: Common from the beginning of the year until tax bills are due in April, tax refund fraud occurs when an identity thief gets ahold of your social security number and other sensitive information and files a fake tax return in your name and takes off with the refund you were supposed to get. The victim often has no clue until he or she goes to file their legitimate tax return.
Imposter scam: This scam is growing in popularity thanks to the era of social media and oversharing. With this scam, the bad guys’ gets ahold of enough information to trick you or family and friends into handing over money or personal information that can be used to further their nefarious causes. Something as innocuous as putting on Facebook that you are traveling next week can be used in an imposter scam, says Breyault. All the scammer needs to know is you are going to Mexico next week and he or she can send a message to a family member on Facebook pretending to be you in trouble needing money wired over.
SIM swapping: This crop of smartphones have a big resale value attached to them making it a tantalizing area for the scammers to tap. In a SIM swap scheme, the scammer gets ahold of enough of your personal information to convince a clerk at a smartphone store that you lost your phone or damaged the SIM card and that it needs to be replaced. The fraudster will pick out one or more phones and your actual phone will be shut off immediately. The new phone is charged to your account and the fraudster usually turns around and sells it on the black market. “Because the phones have a black market value someone can make $200 a phone,” says Garient Evans, vice president of client services at identity theft company ID Analytics.
How to Stop Identity Theft
When it comes to identity theft, bad guys often prey on the easy targets which means the people who don’t have their guard up or don’t think it can happen to them. After all, the less suspicious and the more trusting you are the less likely you are to pour over your credit card and bank account statements each month or do research before clicking on a link in an email or text. Being diligent and staying on top of your behavior online can go a long way in spotting a breach early on and hopefully preventing it altogether.
“Identity theft can happen online and offline, which is why it is important to closely guard all personal information, no matter how it is stored,” says John Danaher, president of TransUnion Consumer Interactive. “Millennials should regularly monitor their credit reports to check for new lines of credit that may have been opened by an identity thief using stolen information.”
In the offline world, experts say you have to be stingy with who you share your social security and other personal information with, shred all documents including the envelope and make sure to keep identifying information to a minimum when you are out and about. After all, if you carry your social security card and driver’s license in your wallet and you lose it, that’s a treasure trove of information for the bad guys.
On the Internet, millennials have to be particularly careful about how and what they communicate, who they become friends with on social media and how they surf the Internet when they are in public. According to Bagdasarian some of the best practices online include keeping the number of online accounts to a minimum, creating strong passwords that are regularly changed, keeping the amount of information you share online to a limit and being wary of online identities unless you confirm it is someone you actually know.
Tips for using public Wi-Fi hotspots
One of the biggest risks for millennials comes when they use their devices on free Wi-Fi hotspots, says Hanson of LifeLock. Found everywhere from coffee shops to airports, they give millennials a cheap and easy way to get online but they can also be a way for scammers to capture your sensitive data. Because of that Hanson says it’s OK to check the weather on a free Wi-Fi spot but it’s not safe enough to log on to Facebook or check a bank account.
“When you are checking bank accounts or logging on to social media wait until you are on a secure Internet which most of the time is at home or at your workplace,” says Hanson.
Unfortunately, millennials aren’t doing that good of a job of it when it comes to their online habits which make them vulnerable to identity theft. TransUnion found in a recent survey 67 percent of millennials said they don’t use a password to lock their phone, 86 percent store bank account information on their phones, and 84 percent check their financial accounts on public Wi-Fi.
At the end of the day, millennials may not be the prime target for identity theft but they can become a victim. In order to avoid becoming a statistic and undertaking the sometimes lengthy process of getting your identity back, it pays to apply a dose of skepticism when it comes to handing over your personal information. “Before you really trust where you are giving information, there is no harm in double checking with a friend if you get a Facebook double request and there’s really no harm when filling out forms checking to make sure they really need that information,” says Hanson. “In the end, it is your personal information and things can’t easily be changed once the information is out there.”
And in the event that your identity is stolen, be sure you know how to handle it. After contacting your banks and other affected institutions, be sure to freeze your credit report so potential creditors aren’t given false information.
Identity Theft Protection for College Students
College students typically do not have that much established credit nor are they the most savvy when it comes to keeping a lid on their personal information, both of which puts them at increased risk for identity theft.
Consider this: According to Javelin Strategy & Research’s 2015 Identify Fraud Study, students are the least concerned about fraud, yet they are the most severely impacted by it. What’s more, Javelin found students are the least likely to detect fraud on their own, with 22% getting notified they were a victim of identity fraud by either a debt collector or when they are denied credit. That is three times higher than the average fraud victim.
“Identity theft is especially high among first-time college students,” says Ryan Naraine, Head of Global Research and Analysis Team, North America, Kaspersky Lab, the security company. “They are a prime target because it isn’t something they are monitoring.”
For many college students, going to school not only marks the first time they are away from their family but also the first time they are in charge of handling their own finances and that includes credit and debit cards. At the same time, this generation grew up with social media and the Internet and won’t think twice about sharing their information.
In fact, it’s not a stretch for college students to take a picture of their first-ever credit card and post it on Instagram. While that student is just showing off, it is the ideal situation for fraudsters, who now simply by looking at an Instagram page, have the credit card number and expiration date. College students are also known to post pictures of their college I.D. or badge, which also includes identifying data. Even seemingly innocent posts on Facebook can be used to glean information that can result in a stolen identity.
Another reason college students are at a high risk for identity fraud: using shared computer networks to do their personal and private financial business. “College students are always on shared Wi-Fi networks and shared college computers that may already be infected,” says Ryan. If the computer is infected, that means it will be that much easier for hackers to steal usernames, passwords and account numbers – not to mention, getting the holy grail of identity theft: social security numbers.
For college students, preventing themselves from becoming another identity theft statistic doesn’t require a complete overhaul of their lives and social network dealings. But it does require being smart about what they share and how they access their accounts online.
Tips for using shared Wi-Fi networks
Take for starters the shared networks at colleges and universities across the nation. While it’s ok to use them to do research and homework, college students shouldn’t be using them to check their bank accounts, follow up on a scholarship application or fill out anything that requires personal information, such as their social security number, bank account information, password and even birth date.
Even if it’s a legitimate website, Robert Beatty, Vice President of Technology for security firm CUJO, says students should refrain from doing it if it’s on a shared network or Wi-Fi. “Because it is open, anyone can stumble upon it,” says Beatty. Rule of thumb: Any website where students are required to provide sensitive data should be accessed on the college student’s personal computer on a private network and not on a campus computer with shared Wi-Fi. Experts say it is also important for college students to make sure their PCs have security software installed and that it is kept up-to-date in terms of patches. That will go a long way in keeping the bad guys out.
Limit what you share on social media
While social networks are an important part of college students’ lives, in order to protect themselves from identity theft, they have to limit the type of information they share. Social engineering scams are becoming increasingly popular and happen when an unwitting consumer gets an email purportedly from their friend. The email will use information someone shared on social media to get them to click on a link and give up personal information.
In another variant, identity thieves will use information on social networks to figure out a person’s password and security questions. With that in hand, they can open up accounts or steal money from existing ones. It’s ok to share on social networks, but college students have to make sure they aren’t sharing anything that can clue in thieves.
Because college students are often in the dark about identity fraud until it’s too late, one of the ways to minimize the impact is to teach them to stay on top of their accounts, whether that’s a checking account tied to a debit card or a credit card. After all, if someone gets ahold of their information, it could show up in the form of unusual purchases or withdrawals from the account. “All of these accounts have an app,” says Ryan. “They have to get in the habit of checking for anything suspicious.”