Five Identity Theft Myths Debunked: What to Know to Protect Yourself
What you don’t know could make you a good target for identity theft. In fact, did you know that you are 500 times more likely to have your identity stolen than your purse? Yet, we cling to our purse (or wallet) as if our lives depend on it.
As consumers, we need to protect ourselves from becoming the victims of identity thieves by holding ourselves as accountable as we can. Sometimes it’s not possible to avoid becoming the victim, as is the case with huge, global security breaches, for example. Other times, common identity theft myths keep consumers from protecting themselves properly. To avoid becoming a victim , let’s identify some of the most common identity theft myths.
Table of Contents
Myth 1: Identity Theft is a Victimless Crime
Identity theft is not just a financial crime. People’s lives are changed as a result of these actions. A thief behind a computer screen can steal your identity. That act potentially leaves a victim in their wake. Once an identity thief obtains your Social Security Number and other personal information, that person can file fraudulent tax returns, access medical treatment and prescription drugs, and open lines of credit in your name, to name a few crimes.
Victims then spend hours and sometimes years trying to clear their good name and rebuild their credit. According to the Identity Theft Resource Center, a victim will spend an average of $1495 and 600 hours trying to fix what’s been done to them, their credit scores, and their savings accounts.
A proper fraud investigation results in getting your money back, but until there’s a resolution, you might not be able to make mortgage and car payments, for example. Defaults or late payments on loans could negatively affect a credit score. Another way your credit score could plummet is if the thief is taking out more credit cards in your name. Every credit check is hurting your score, and all that debt may end up cutting you off from financial resources.
Myth 2: I’d Know If My Identity Was Stolen
If someone snatches your purse, you know right away that you need to cancel your card cards and alert your financial institutions immediately, and even file a police report. In the case of a thief filing a false tax return, however, you won’t know for months until you get a notice in the mail from the IRS explaining a tax return has been filed in your name, after you’ve filed for the same tax return. The burden of proof is on the victim to prove who they are.
By the time a victim realizes their identity is stolen, the damage is already done. In addition to the extra effort, victims are likely delayed in getting their tax return. You may have to wait several months for the IRS to authenticate to false return.
Myth 3: Identity Theft Mainly Happens Online
Low-tech methods of dumpster diving and purse snatching are classic ways for someone to steal your identity, which is why you should shred important documents containing your personal information and not leave mail in your box. Phone scams are another technique criminals use. If someone calls you claiming they are with the IRS, a red flag should go up. The IRS will not call you, send your emails or try to contact you via social media. They typically contact you by mail first.
In general, never share your personal information with anyone on the phone. Certainly don’t carry your Social Security card in your wallet. Think about what else lives in your purse or wallet: credit and debit cards, driver’s license and insurance cards.
Myth 4: Debit Cards Are As Secure As Credit Cards
The convenience of debit cards make consumers vulnerable to fraud. The money in your bank disappears as soon as you or someone else uses it. With a credit card, you can alert the company and dispute any unauthorized charges.
If you use a debit card at an ATM, be wary. Scammers will use devices at ATMs called card skimmers to steal your bank card information by running it through a machine that reads your card on the magnetic strip on the back. If you are going to use your debit card, be sure to use it in a well-lit, highly-trafficked area, such as inside a retail store.
Also, don’t use a debit card to make online purchases because your computer could be infected with malware and you don’t really know where your information is going, especially if a third party intervenes. Many databases are poorly protected.
Myth 5: I Use Cash and Not Credit Cards, So I Won’t Become A Victim
If you carry wads of cash and it’s stolen, you have no recourse. It’s gone for good. There’s also ways for thieves to steal your money through other means, like a rental scam.
Here’s a likely scenario. You find a home online, you fill out a rental application giving out your Social Security number, current address, phone number, etc. and email it to the supposed landlord. The landlord emails you back and asks if you can see the property on a certain day and time. You agree. The next day, they email you again and inform you they have decided to rent the house to someone else.
You have just revealed your entire personal and financial history to someone who gave the house to another more “qualified candidate.” You are left holding the bag. They have removed the rental listing and changed the status of the property to “off market.” As a result, you could become a victim of identity theft.
Another obvious sign of a rental scam is the owner asks for a deposit up front via Western Union Moneygram or prepaid Visa. Don’t do that. You should never give any money or fill out an application until you see property in person.
As consumers, we can’t completely protect ourselves from identity theft. Once we give out a personally identifiable piece of information, such as a Social Security number, we open ourselves up to identity theft. Awareness of common myths is a good step in guarding against potential crime.
Looking for more ways to protect your credit card and identity? Visit the Fiscal Tiger credit card resource center for more guides. Want more information on credit scores, and how identity theft can damage them? Visit our credit score learning center.
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