Do you know that in 2022, identity theft cost US businesses a staggering $25 billion? Although the digital era has completely changed the way we live and conduct business, it has also given fraudsters new opportunities. Businesses are faced with an increasing challenge as they rely more and more on online transactions and remote customer onboarding: efficiently and securely verifying the identities of their customers.
You can protect your business and clients from identity theft in the modern digital era by using the knowledge and tools provided in this article. Consequently, stressing the significance of reliable digital identity verification services.
In this ultimate guide to identity fraud protection in the US, we will discuss the various forms of identity fraud, examine the growing threat of identity fraud, and emphasize the significance of putting robust digital identity verification systems in place, as a means of identity fraud protection in the United States.
The Growing Threat of Identity Fraud in the US
The Scope of the Problem:
Identity theft is a significant financial burden on US businesses. According to Experian, businesses lost an estimated $25 billion to identity fraud in 2023, a 12% increase from the previous year.
• In the same year, the Federal Trade Commission (FTC) received over 1.3 million identity theft complaints, with consumers reporting a staggering $10 billion in losses.
• Identity Theft Resource Center reports that there were 1,802 data breaches reported in 2022, which exposed over 400 million personal records.
• The Federal Trade Commission received over 2.5 million identity theft reports in 2022, making it the most common type of fraud reported to the agency.
• Identity theft is becoming a more sophisticated tool used by fraudsters to commit a variety of financial crimes, such as fraudulent loan applications, credit card fraud, and tax fraud.
How Identity Theft Happens in the US
There are several ways of how identity theft happens in the US. They include:
• Phishing attacks: False emails or messages sent to trick recipients into divulging personal data.
• Data breaches: These occur when security flaws allow sensitive customer information to be accessed.
• Social engineering scams: These involve using psychological tricks to trick victims into revealing personal information.
• Synthetic identity fraud: An advanced technique in which thieves piece together fragments of stolen data to construct whole new identities.
Types of Identity Fraud and Their Impact
There are several ways that identity fraud can appear, and each presents a different risk to businesses:
• Account Takeover (ATO): To steal money or make unlawful purchases, fraudsters take over active customer accounts.
• New Account Fraud: Thieves utilize identities that they have stolen to open new accounts, get credit lines, or get services.
• Identity Document Fraud: Identity thieves fabricate or utilize fictitious documents to pass for authentic clients.
Businesses that engage in these fraudulent activities risk suffering serious financial losses, harm to their reputations, and legal ramifications.
How to Check for Identity Theft in the US
Keeping your identity safe in today's digital world is more important than ever. This ultimate guide empowers you to become a proactive defender against identity theft. Here are 6 key strategies to identify suspicious activity early:
1. Credit Report Checkup:
Checking your credit reports with all three major bureaus (Experian, TransUnion, and Equifax) is a must. These reports detail your accounts, balances, and payment history. Look out for unfamiliar accounts, unexpected debt increases, or inquiries you didn't initiate. You can get free credit reports annually at AnnualCreditReport.com or directly through Experian.
2. Bank Statement Scrutiny:
Regularly reviewing your bank statements for suspicious activity is essential. Look for unrecognized transactions, unusual charges, or ATM withdrawals you didn't make. Catching unauthorized activity early allows you to report it to your bank immediately and minimize potential damage.
3. Watch Out for Unfamiliar Mail:
Receiving bills or collection notices for accounts you don't recognize is a warning sign. This might indicate someone is using your personal information to open accounts in your name. Contact the company directly to verify the account and check your credit report to see if it appears there.
4. Stay Ahead of Tax Season:
Tax identity theft occurs when someone files a tax return using your Social Security number to claim your refund. If you're unable to file your legitimate return because one has already been filed, your identity may be compromised. Beware of phone calls claiming to be from the IRS – they will never request personal information or payment over the phone.
5. Check Your Medical Statements:
Reviewing medical bills and explanations of benefits from your health insurance is crucial. Look for medical services you didn't receive. Medical identity theft occurs when someone uses your information to receive medical care, potentially leading to incorrect medical history or unnecessary procedures.
6. Review Your Social Security Statements:
Social Security fraud can occur when someone uses your information to claim benefits. Inaccurate earnings statements or unexpected notifications from the Social Security Administration could be warning signs. If you're unable to access certain government benefits due to suspected misuse of your Social Security number, report it immediately.
What should I do in Case of Identity Theft in the US?
This is what to do to protect yourself from identity fraud if you stay in the United States.
- File an official report: Head to IdentityTheft.gov, a one-stop resource by the Federal Trade Commission (FTC), to submit a report. You can also call the FTC at 1-877-438-4338.
- Contact credit bureaus: Place a fraud alert or freeze on your credit reports with the three major credit reporting agencies: Equifax, Experian, and TransUnion. This will help prevent identity thieves from opening new accounts in your name.
The process of reporting identity theft in various countries differs, we also have a blog post on how to report identity theft in Nigeria which you will find helpful.
Ultimate Guide to Identity Theft Protection: Top 10 Plus 1 Ways to Protect Yourself from Identity Fraud in the US
- Lock Down Your Devices: Phones, tablets, and computers hold your info. Keep them safe with strong passwords, fingerprints, or face unlock.
- Password Power Up!: Don't use the same password for everything! Use a password vault app to create unique passwords for each account.
- Shred Important Papers: Documents with personal or financial info can be dangerous. Shred them before throwing them away.
- Keep Your Social Security Card Safe: It's like gold to identity thieves! Store it securely at home, not in your wallet.
- Be Careful with Public Wi-Fi: It's not always safe! Look for a lock symbol or "https://" before connecting. Consider a VPN for extra protection.
- Watch Out for Phishing Tricks: Emails or texts trying to steal your info might look real. Don't click on any links or give out personal details!
- Don't Get Scammed by Phone Calls: Real companies won't call and ask for your Social Security number or credit card PIN. Hang up and call them back using a trusted number.
- Check Your Credit Report Regularly: It shows your financial history. Look for suspicious activity, like new accounts you didn't open. You can get free reports each year.
- Carry Fewer Cards: Only carry the credit cards you really need. Less exposure means less risk of theft.
- Think Before You Share on Social Media: Don't share your address, birthday, or other personal details. Identity thieves might use that info!
- Privacy Screen Shield: Using your phone or laptop in public? A privacy screen makes it harder for people nearby to see your information.
All that being said, these are tips which individuals can use to protect themselves from identity fraud as we also have tools which banks can use to protect themselves from identity fraud.
Conclusion
This guide to identity fraud protection has no doubt equipped you with the knowledge and tools to become a proactive defender against identity theft. However, staying ahead of fraudsters requires robust and simple compliance solutions. Youverify, a leading identity verification company, can be your strong partner in this fight. Youverify offers an innovative solution that empowers businesses to implement seamless digital identity verification processes.
Our technology ensures the security of both your operations and your customers' information. Ready to take control of your business's identity theft protection and streamline compliance? Request a free demo of Youverify today and discover how we can help you safeguard your customers, build trust in the digital age, and achieve frictionless onboarding experiences.