What You Can Do to Avoid Identity Theft and Credit Fraud

Credit fraud and identity theft are similar crimes perpetrated by fraudsters with a singular goal in mind — to seek their financial gain.

Through these criminal acts, they use individual identities to either make purchases or outrightly withdraw their money, completely depleting victims of their funds.

However, it is possible to protect yourself from identity theft and credit fraud through some fool-proof methods. In this article, we will explore what you can do to avoid identity theft and credit fraud.

What is Identity Theft?

Identity theft happens when fraudsters illegally obtain an individual's identity use it for their own financial gain. More often than not, this crime stays undetected and you may not realize it until you receive bill payments for things you didn't buy or sign up for. 

There are many ways identity theft can occur. They can happen through cold-calling, hacking, phishing or data breaches.

What is Credit Fraud?

Credit fraud is a form of identity fraud that involves the unauthorized use of an individual’s credit or debit card to make purchases or withdraw cash. The Federal Trade Commission (FTC) said that credit card fraud in the United States rose 104% between the first quarter of 2019 and the first quarter of 2020. This statistic has been sustained since then and reached a five-year high in the last three months of 2021.

Credit fraud happens in two major ways, application fraud and account takeover. Application fraud happens when a fraudster obtains credit card information and opens a new account in the individual’s name. Account takeover involves using the victim's personal information to take control of their account and misappropriate funds.

Common Ways Identity and Credit Fraud Occur

Identity theft and credit fraud can happen in different ways including:

1. Phishing

Cybercriminals use deceptive emails, text messages or websites to lure unsuspecting victims to share their personal information such as passwords, social security numbers (SSN) or credit card numbers.

2. Social engineering 

Social engineering is similar to phishing but this tactic is more physical than over the internet. Criminals use deceptive tactics or words to manipulate or pressurize individuals to share their information. They could also carry out certain actions that would compromise their security.

3. Data breaches

Data breaches can happen in different ways. They could gain unauthorized access into a website or database which can potentially expose customer data. They also use malwares to infect computers which causes a diversion and steals data. 

4. Dumpster diving

Criminals could also steal discarded computers and search for relevant information that could gain them access into a customer's profile and thus perpetuate identity fraud.

5. Card skimming

Bad actors also install devices on ATMs or POS devices to steal information and carry out credit card fraud

Top Tips to Prevent Identity Theft

In order to prevent identity theft, it is important to protect your personal information through various methods. Here are some tips on how to protect yourself from identity theft:

1. Shred sensitive documents

Before you discard any document, check through them to be sure they do not carry sensitive information. If they do, you should shred them to prevent thieves from using your information.

2. Limit personal information online

Make sure to limit the amount of personal information you share online, especially on social media and other websites. Avoid posting sensitive details like card details or documents containing your name, SSN and address.

3. Use strong unique passwords

When creating passwords for your online accounts, use strong and unique passwords and avoid using the same passwords for multiple websites.

4. Enable two-factor authentication 

Two-factor authentication (2FA) provides an additional layer of security to your accounts. It does so by requesting a second verification method like a code sent to your phone in addition to your password. This dissuades hackers from carrying out identity theft because of the extra stress involved in getting the code.

5. Install antivirus software

Another way of avoiding digital scams is to install antivirus software. These software protect your computers against malwares and cyber threats

6. Update security software

Make sure to always regularly update your antivirus software and the security tools you use to make sure you have access to the latest protection strategies against emerging threats.

Tips to Avoid Credit Fraud

With these online privacy and security tips, you can protect yourself from suffering credit fraud:

1. Review statements and transactions 

Ensure to regularly review your credit card statements and transactions. This is to check for any unauthorized transaction or suspicious activity.            

2. Set up alerts 

Always sign up for transaction alerts to be notified of all transactions. Immediately a fraudulent transaction occurs, you can be notified and and can go on to take immediate action.

3. Check your credit report

Always review your credit reports regularly to identify any fraudulent activities on your account. You can spot money laundering activities by getting your annual credit report and thus ensuring your financial data protection.

4. Protect your physical card

Never share the digits on your credit card because these digits can be used to buy things online and deplete your account.

5. Report suspicious activity

Whenever you notice any suspicious activity, contact your bank or card issuer immediately. Scam activities can be reported to the Federal Trade Commission (FTC).

Tools and Services That Help Protect Your Identity

With certain tools and services, you can detect signs of credit card fraud and identity theft. Here are some tools and services that can help you ward off identity theft attempts:

1. Password management 

Several tools like Last Pass, Dashl Lane and Bit Warden can help you secure your passwords and generate strong passwords for your accounts. Some of them come with additional dark web monitoring services to alert you of fraudulent activities. 

2. Virtual Private Network (VPN)

VPNs offer security covering for users' IP addresses. With an IP address, hackers can access your personal information and use it to carry out fraudulent activities.

3. Identity theft protection services

Platforms like Youverify have different tools and services that can be used to protect your identity. Some of such tools include the customer risk assessment, customer verification and credit checks. With these tools, you can be secured against all sorts of attempts of identity theft.

Bottom line- How to Protect Yourself from Identity Theft

Following these recommended ways to protect yourself from identity theft and fraud can save you a world of trouble and help you protect your identity and your accounts from infiltration. Companies like Youverify specialize in protecting users from identity theft through transaction monitoring, biometric verification, and ID document verification.

With these tools, you can track your transactions to spot discrepancies. With biometric verification tools, you can secure your sensitive information using facial or physical features that cannot be manipulated. Explore Youverify's host of tools and services and safeguard your information against bad actors. Request a demo today