Common Identity Theft and Cyber Scams

Melissa Davidson
Reading Time: 5 minutes

The various types of identity theft scams and cyber crimes out there today are as wild as they are dangerous.

Crooks will use any opportunity available to access and use your personal information for their own benefit, including opening new lines of credit and utility accounts, draining your bank account, racking up your credit cards, stealing your social security and medical benefits, and collecting a false tax return. Not to mention the inordinate amount of heartbreak and emotional trauma, depletion of savings, damage to your credit score, and the long road to financial recovery that accompanies being a victim of these crimes.

Identity theft scams and cyber crimes do not happen in a bubble. In fact, identity fraud is on the rise, with over $16 billion stolen from 15.4 million U.S. consumers in 2016, compared to $15.3 billion and 13.1 million the year before. In the past six years, thieves have stolen over $107 billion.

To prevent yourself from becoming a victim, you should be aware of several common scams swirling in our society, and know how to detect and recover from identity theft and cyber scams:

Be On Guard Against Tax ID Theft

A thief uses your Social Security number to falsely file tax returns with the IRS or state.  They then collect the refund that was supposed to go to you. Identity theft tax fraud is the number one type of scam encountered by the IRS.

You don’t usually know you’ve been a victim until you get a letter in the mail from the IRS stating that a tax return has already filed using your SSN. Please note that the IRS will never contact you by phone or email.

Dealing with this type of fraud is complex and can take hundreds of hours to fix, which results in a delay in getting what’s owed to you. The victim is constantly wondering if the problem will ever be resolved or if their credit is damaged. Be sure to file a complaint with the FTC at, contact one of the three major credit bureaus to put a ‘fraud alert’ on your credit records, contact all of your financial institutions, and close accounts opened without your permission.

The reality is that during the first six weeks of the 2016 tax season alone, the IRS had identified fraudulent refunds on more than 42,000 tax returns, with nearly $227 million in claims. If it happens to this many people, it could absolutely happen to you.

Don’t Fall For the Romance Scam

Is all fair in love and war? Not when it comes to romance scammers who are merely online imposters out to break hearts and bank accounts. Here’s an example of how this happens:

A woman in her 50s is struggling in her marriage or is recently divorced, so she gets online and is happy to chat with someone who is interested in her. She feels a connection with him — a connection that ends up costing her over $2 million, or every cent she owned, according to the FBI.

Con artists know how to exploit vulnerable people, especially when potential victims post details about their personal lives on social media and dating sites. They aren’t protecting their privacy enough. Mostly, the scams involve grooming a victim for months, sending them gifts and love notes, even proposals of marriage. Predators usually concoct some crazy story about how they need money so they can come and visit or pay for an emergency of some kind. Soon enough, someone has spent their life savings on “helping” the perpetrator.

Trolling for victims online “is like throwing a fishing line,” said Special Agent Christine Beining, a veteran financial fraud investigator in the FBI’s Houston Division. Someone will eventually take the bait and can wind up broke.

The Growing Challenge of Medical Identity Theft

Medical ID theft happens when a thief acquires someone’s personal information, such as name, SSN, health insurance number, and/or address, for the purpose of illegally getting medical care, prescription drugs and insurance reimbursements.

It can happen in the blink of an eye or with a simple stolen purse off the front seat. This is exactly what happened to one victim who left her purse while she went inside to pay for gas. Someone stole it while she was briefly inside.

She took action to protect herself from identity theft by immediately filing a police report, canceling credit cards, applying for a new driver’s license and health insurance card, and checking her bank account multiple times. She thought the ordeal was over, but two years later she gets arrested for acquiring more than 1,700 prescription opioid painkillers through pharmacies in her area.

“I had my mugshot and fingerprints taken,” according to the victim. She suffered from psoriasis and broke out in a rash because she was so stressed. “The policeman looked at my hands and said, ‘That’s what drug users’ hands look like.” They just assumed she was guilty.

The thief had altered her driver’s license and used her stolen health insurance card to get a prescription for painkillers. It wasn’t until the pharmacist became suspicious and called the police that the jig was up.

Look Out for Card Skimming

Card skimming is a form of credit or debit card theft, and is another way to get completely blindsided when you find out your card is still in your possession, but all your money is gone from your bank account.

Thieves can grab your credit and debit card information with small devices called skimmers. These card readers take the data from the card’s magnetic strip attached to ATM machines so that every time someone swipes their card, data is stolen. The criminal then comes back to the machine to pick up the file containing the stolen information. The thief will clone a card and simply break into bank accounts to steal money. Once all your money is drained, you won’t be able to pay your bills, which could negatively affect your credit score.

Malware Based Phishing is Still a Threat

This refers to a scam that runs malicious software on a user’s PC. Malware-based phishing uses notifications and alerts to trick the victim into supplying personal information, such as email password, bank account details, and other sensitive information.

You may get an alert that your computer has a virus or needs a virus protection update, when that isn’t the case. This happens on global scale. In April 2017, over 300,000 computers were hacked by a virus called “WannaCry.” It affected over 50,000 companies in 150 countries by demanding ransoms. Hackers collected of $50,000 in payments. Luckily, a 22-year-old security researcher in the U.K. was able to stop the spread by locating a “kill switch.”

Cybercrime and identity theft takes on many, many different forms that can lead to not only annoyance, but financial ruin, compromised personal safety and even a destroyed reputation. Our digital lives make it tough to avoid exploitation by criminals. To stay safe online, read up on necessary steps to protect your personal information.

Looking for more ways to protect your credit cards? Visit our credit card resource center for more guides. Are there other errors on your credit report? Visit our dispute letter resource center for more information.

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