Learn how to recognize the signs of ID theft so you can take action quickly.
Cybercrime has become a prevalent threat in all our lives. Roughly 16.7 million people were the victims of ID theft in 2017 alone. And as cyberattacks get more sophisticated, it isn’t always readily apparent that your data has been compromised.
Spotting the warning signs of identity theft can help you prevent significant financial damage. And these damages go beyond simply emptying your checking account. They include, buying goods and services on your credit card, receiving medical treatment through your health insurance, creating a new passport using your name, and opening new credit card accounts. You need to learn to spot these signs, so you can stop identity theft as quickly as possible.
#1: Transactions you don’t recognize
Whether it’s ATM withdrawals from your checking account that you didn’t make or charges to a credit card that you didn’t authorize, suspicious transactions are often the first sign of the most common type of identity theft – misuse of an existing account.
And keep in mind that the transactions may not be huge. In fact, savvy thieves will only make small transactions in the hopes you won’t notice them.
You can catch these transactions quickly in several ways:
- Monitor your monthly statements closely
- Sign up for free fraud protection on your account
- Set up transaction notifications on your smartphone
#2: Missing bills or other mail
Not all identity theft is high-tech. Someone can steal important financial documents directly from your mailbox. If someone gets their hands on a bank statement or credit card statement, it can compromise that account. If they steal something that has your Social Security number, the damage can be even worse.
Get a mailbox that locks and don’t leave mail in your mailbox. When you go on vacation, contact the post office to request that they hold your mail at their facility until you get back.
#3: Collection calls about debts that aren’t yours
This isn’t always a sign of ID theft, but it can be. Someone opens a new credit card in your name and runs the account up to its limit, then they don’t pay the bill and it goes to collections. Just be aware that other events besides identity theft that can cause collections you don’t recognize. You may have a medical bills you didn’t know you need to pay that goes to collections. Collectors may also confuse you with a different consumer with a similar name.
If you receive a call about a collection you don’t recognize, get as much information as you can to determine the source of it. If its fraudulent, contact the original creditor to report the fraud.
#4: Medical charges for services you didn’t receive
Insurance fraud is another form of identity theft. If you receive bills for medical services that you don’t receive, it could be a sign of this type of theft. Call the original medical service provide to get more information about the charges.
#5: Medical insurance denials
There are other signs of insurance fraud that can tip you off to someone using your insurance. You may get denied treatment because you’ve already reached your benefits limit. Or you may be denied additional coverage because of a condition that you don’t have.
#6: An IRS notification catches you off guard
Tax identity theft can happen if your Social Security number gets stolen. Someone can apply for a job using your number, in which cased the IRS may notify you of income they say you’re receiving from an employer you don’t work for.
You may also receive a notification that you can’t file your income taxes in April because you already filed them. Essentially, someone filed income taxes before you and then they intercept your refund. This is one of the reasons you want to file your taxes as early as possible.
#7: You’re turned down for credit
If you get turned down from credit because your credit score is too low or your debt-to-income ratio is too high, it can be a sign of ID theft. Getting blindsided by rejection on a credit application may happen if someone has ruined your credit by opening accounts and running up debt in your name. This will also increase your debt-to-income ratio, because you’ll have more debt than you think you do.
This is one reason a credit monitoring tool can come in handy. It prevents any unwanted surprises when you apply for a loan or credit card.
#8: Your credit score starts rising for no apparent reason
If someone is opening credit cards in your name, the first sign of it will be a big bump to your credit score. That’s because new accounts in good standing will improve your credit score. It improves your credit utilization ratio by giving you a higher total credit limit and gives you a more diverse mix of debt. That gives you an instant boost to your score.
But the boost will be the first sign of theft before a big fall. Once they run up the balances and let them slip into collections, you’re in for credit damage. So, if you use a credit monitoring tool, don’t just take score increase notifications as a good sign. Check what caused the jump to make sure it’s not a new account you didn’t authorize.