4 Most Common Types of Identity Theft and How to Protect Against Them

Identity theft is the use of another person’s personal information, such as their name, address and Social Security Number (SSN) for personal gain. Identity theft can create many problems for those affected, including a decline in credit scores and finances. Those affected by identity theft may feel anxiety about their future financial prospects because it can affect their ability to meet their financial or personal goals. 

According to the U.S. Federal Trade Commission, there were more than 1.4 million reports of identity theft in 2021 and 2.1 million fraud reports in 2020. Although these numbers can be scary, they shouldn’t be cause for alarm. There are plenty of techniques you can use to help protect yourself. 

Let’s take a look at some of the most common types of identity theft and how you can protect yourself from them.

Most Common Types of Identity Theft

There are numerous types of fraud and identity theft, including mail identity theft, account takeover fraud and driver’s license identity theft. However, the most common types of identity theft are financial, tax-related, synthetic and child identity theft. 

1. Financial Identity Theft

Financial identity theft happens when an individual uses your personal data, such as your credit card, for financial benefit. This type of identity theft can take many forms, including when a fraudster:

• Uses your credit card to buy things
• Steals funds from your bank account
• Uses your SSN to open new accounts

To protect yourself against this type of theft, it’s important to keep an eye on your bills, credit card statements and banking accounts for suspicious activity. Early detection of financial identity is key to minimizing damage. If there is an unexplained charge, it’s vital to contact your credit card company or financial institution immediately.

2. Tax-Related Identity Theft

Tax-related identity theft is the second-most common type of identity theft. This type of identity theft happens when an individual uses your SSN to complete job-related paperwork or files a fake tax return with your SSN to claim your refund.

Some signs that you’ve become a victim of tax-related identity theft include being asked to verify your tax return or having your e-file tax return rejected. Other signs you’ve become a victim of this type of theft include receiving information from an employer that you’ve never worked for and receiving a refund in your name that you shouldn’t have received.

There are a number of steps you can take to protect yourself against this type of identity theft, including:

• Using antivirus protection and security software on your computer
• Making strong passwords, especially for financial and tax software accounts
• Avoiding carrying your Social Security card with you unless necessary and keeping it in a secure place at all other times
• Not clicking links in emails or text messages from unknown sources — these could be phishing attempts

3. Synthetic Identity Theft

Synthetic identity theft is one of the fastest-growing types of identity theft in the United States, and it involves using real people’s information to create a fake identity. An individual may use your birthdate, SSN and address to create a fake identity that is then used to commit financial crimes such as applying for fraudulent loans or credit cards. 

To prevent this type of identity theft, keep watch for certain signs such as phone calls about new credit accounts that you didn’t open and mail with your address but a different name. Keeping an eye on your credit reports for suspicious activity and alerting your financial institution or credit card can help you with addressing this type of theft as quickly as possible. 

4. Child Identity Theft

Child identity theft involves using a minor’s identity to buy a house, get a driver’s license, or open a new line of credit. It’s often easier to target a child than an adult for identity theft because an adult often already has a credit report and financial accounts. Children, however, do not have an established credit history and are therefore clean slates. 

Unfortunately, this type of theft is often committed within a family and it isn’t noticed until much later when the child has grown up and tries to take out a student loan or apply for a credit card. At this point, it is too late to address the issue that’s been escalating for quite some time. 

To protect against this theft, it’s vital to periodically check if your child has a credit report under their name through the three major credit bureaus: Experian, Equifax and TransUnion. If you find a credit report under your child’s name, you can place a freeze on the report to minimize the risk of further theft.

Take Advantage of Our Identity Theft Program

Want the peace of mind that comes with knowing your financial institution will help you with identity theft protection? 

A Benefits Plus® checking account with 7 17 Credit Union gives you access to our Identity Theft and Security Center Program featuring Restoration Rescue^®. This complimentary identity theft restoration service provides licensed attorneys who specialize in identity theft restoration to help resolve your situation.