Identity Theft: How Does It Happen and How To Report It

Identity theft is one of the most common types of fraud in the United States. Victims of identity theft often have their personal information used by criminals to open credit cards or bank accounts, obtain loans, or make purchases. According to the Federal Trade Commission (FTC), the most commonly reported fraud category the agency received in 2021 was identity theft, totaling 1,434,695.

Also Read: What To Do if You Are a Victim of a Financial Scam

Government documents or benefits fraud was the most common form of identity theft in 2021. Credit card fraud came in second most common.

Documented reported last year that many Chinese New Yorkers have been victims of identity theft. Some had money taken from their bank accounts, others had food stamp benefits stolen. This article provides an overview of common ID theft methods, signs to watch out for, and how to take preventive steps and report the case. It’s part of the comprehensive guide Documented compiled for the Chinese immigrants in New York City.

Also Read: NYC’s Chinese Community Organizes to Hold Chase Bank Accountable for Identity Theft

How does identity theft happen?

According to the FTC, a thief can steal your personal information in person or online. A thief might:

• obtain your account numbers or your Social Security number by stealing your mail or garbage;
• lure you into sending personal information via email;
• steal your account numbers from a business or medical office;
• steal your wallet to get your personal information.

Additionally, criminals use the data captured through pinhole cameras, skimmers and keypad overlays to create fake debit or credit cards and then steal from victims’ accounts. It is estimated that skimming costs financial institutions and consumers more than $1 billion each year, according to the Federal Bureau of Investigation (FBI).

Identity theft is not a trivial matter. You may be held responsible for activities the thief engages in with your personal information. For example, you may need to pay for items purchased by the thief. Once they have your personal information, thieves can open bank accounts in your name, set up accounts to pay their utility bills, steal your tax refunds, buy health insurance, change your address and more. Credit card companies may think you are not paying the bill while it is in fact the thief who receives the bill without paying it, which may affect your personal credit. Some thieves will even assume your identity after they are arrested.

Common types and signs of identity theft

Common types of identity theft include: 

• Tax identity theft: Someone uses your Social Security number to file a tax return claiming a fraudulent refund
• Medical identity theft: Someone uses your stolen personal information (including your Medicare ID or health insurance account number), to obtain medical care or submit fraudulent claims to health insurers without your authorization 
• Unemployment identity theft: Someone uses your personal information to apply for and receive unemployment benefits

Moreover, child and senior identity theft have been overlooked for many years. Child identity theft victims often may not realize their information has been stolen until they are adults applying for loans. Older adults often share personal information with their doctors and caregivers, increasing the risk of information theft.

Identity theft is often noticeable. You can find out if you are at risk of identity theft by checking the following information.

• Check the bills you receive: Are there expenses on the bill for items you did not purchase?
• Check bank statements: Are there withdrawals made without your permission? Are there unusual account activities?
• Check your mailbox: Have you stopped getting bills? Have you started getting new bills that you do not know about?
• Request access to your credit report: Are there accounts or other information in your name that you are not aware of? A credit report is a summary of your personal credit history that lists your name, address, Social Security number, credit cards, loans, the amount of money you owe and whether you pay your bills on time.

What to do if you experienced identity theft

If you notice any unusual activities listed above, someone may have stolen your identity. This could bring you difficulties in the future in opening a credit card, getting a job, renting an apartment or paying your utility bills. You should immediately take the following actions to minimize the losses and risks associated with identity theft.

1. Call relevant companies that were affected by the scam. For example, if you notice unauthorized charges on your bank statement, call the bank’s fraud department and explain that your identity has been stolen, ask them to close or freeze the account to prevent more charges. Change the passwords and PINs for your logins. You may also need to contact the companies again after receiving an Identity Theft Report from the FTC.
2. Contact one of the three credit bureaus listed below to set up one-year fraud alert service for free. The credit bureau you contact must inform the other two to place a fraud alert on your credit report. A fraud alert will make it more difficult for someone to open a new credit account in your name because a business must verify your identity before it issues new credit in your name. The fraud alert needs to be renewed annually, and the credit bureaus will send you a confirmation letter when it’s activated.

• Experian.com/help, 888-EXPERIAN (888-397-3742)
• TransUnion.com/credit-help, 888-909-8872
• Equifax.com/personal/credit-report-services, 800-685-1111

3. Get your free credit reports from Equifax, Experian, and TransUnion. Go to annualcreditreport.com or call 1-877-322-8228.

4. Report identity theft to the FTC. You can go online and fill out the form or call 1-877-438-4338. Provide as many details as you can. Based on the information you provide, IdentityTheft.gov will create an Identity Theft Report and a recovery plan for you. The Identity Theft Report will prove to the merchant that someone has stolen your identity information and ensure that you can exercise your relevant rights. If you create an account, the FTC will instruct you on how to resolve the issue. If you don’t create an account, immediately print your Identity Theft Report and recovery plan. Otherwise, you will not be able to access the page once you leave it.

5. You can also report the incident to your local police station. Bring the following materials with you when you go: a copy of the FTC Identity Theft Report, a government-issued photo ID, proof of address (mortgage bill, rental agreement or utility bill) and proof of any theft (bills and Internal Revenue Service notices). Upon arrival at the police station, tell the police that you need to file a report for identity theft, and obtain a copy of the police report for future use.

6. Close new accounts under your name. With an Identity Theft Report from the FTC, contact the fraud department of each business to explain your situation, request them to close the new account, and send you a letter confirming that the fraudulent account is not yours, you are not responsible for it and that it has been removed from your credit report. Keep the letter for future use.

7. Remove bogus charges from your accounts. Write to each of the three credit bureaus to correct your credit report. Here is a sample letter.

8. Consider adding an extended fraud alert or credit freeze. Freeze your credit through Equifax, Experian, Innovis, TransUnion and the National Consumer Telecommunications and Utilities Exchange. A credit freeze prevents someone from applying for and being approved for a credit account or utility service in your name.

9. Constantly check your credit report.

10. Other steps you can take include: reporting a misused Social Security number, stopping debt collectors from collecting debts you do not owe, replacing government-issued IDs and clearing your name of criminal charges.

If you want to know what to do for a specific type of account identity theft (e.g., utility, government benefit, checking, etc.) or a certain type of identity theft (tax identity theft, etc.), you can check this page to view the details.

Also Read: Food Stamp Thefts Hit Sunset Park Chinese Community

How to prevent identity theft

Being careful and taking precautions are often the first steps in effectively preventing yourself from becoming a victim of identity theft. The FTC and the FBI have provided some tips for preventing identity theft. Following these steps will greatly reduce your chances of experiencing identity theft.

• At home: Keep your personal information including financial records, Social Security card, and Medicare card in a safe place; cut up documents containing your personal or medical information that is no longer useful; take your mail out of the mailbox in time.
• Business: Provide your Social Security number only when necessary and, if requested, ask if you can provide other forms of identification instead; do not give out your personal information to others over the phone or by e-mail.
• When using a computer: Use passwords that cannot be easily guessed, mix up letters, numbers and symbols whenever possible; do not respond to emails or other text messages asking for your personal information; do not enter your personal information on computers in public places such as libraries.
• When using ATMs or credit card machines: Check the machine before use to see if any parts are loose or damaged; do not use the machine if you find anything unusual; pull the edge of the keypad to check for coverings before entering your PIN; cover the top of the keypad when entering your PIN to prevent hidden cameras from filming you; try to use well-lit, indoor ATMs; ATMs in tourist spots are easy targets for scammers; try to use a credit card rather than a debit card linked to your bank account.