Due to what feels like a constant flow of data breach announcements, the threat of identity theft has become common knowledge. We hear of personal information being stolen or exposed, but how that stolen information is used remains somewhat of a mystery unless you’ve actually experienced it. So let’s take a minute to imagine what it would really be like to become a victim of identity theft. Here are three scenarios.
1. Your favorite store gets hacked
Hundreds of businesses are affected by data breaches every year, and these data breaches can expose your personal information. The real victim is the consumers, not the businesses themselves. Only a few weeks ago EBay suffered a data breach affecting its millions of consumers. It appears the hackers didn’t get any financial information, but they did get passwords. As many consumers use the same password across multiple online accounts, this puts millions of people at risk for fraud. (If you have an Ebay account, reset your password and make sure you don’t use the stolen password on any other accounts.)
Even if you don’t shop online, businesses store your data online. That means your personal information is vulnerable to hacking whether you shop online or in stores. Target is a perfect example. Information about 110 million customers was hacked from Target’s databases—information included names, addresses, debit card numbers and even PINs. The breach affected customers who shopped online and in stores.
When a company suffers a data breach, they are usually required to let affected customers know. With the rate things are going, if you haven’t received a breach letter yet, you’re probably going to someday.
Worst Case: Two possible outcomes here. The hackers can simply upload the data to a black market website and sell the information to thieves both in the U.S. and overseas. The hackers profit immediately and avoid wasting time conducting a fraud scam—leaving them more time for more hacking. Meanwhile, your personal information is being sold to criminals worldwide so they can use it to steal money, cross boarders and commit crimes in your name.
Of course your hackers might be feeling greedy and decide to do the dirty work themselves. If they have your financial data, they might try to use it immediately, or they might slowly piece together other elements of your identity until they’ve put together an entire profile. To do this, they could hack into your Facebook, search public records, install a virus that logs your activity or send you a phishing email that looks like it’s coming from your bank. In any scenario, you probably won’t know what’s happening. Months later, you’ll see the impact on your bank statements and credit reports. Good luck explaining to your bank that someone with your exact name, address and Social Security number isn’t actually you. The time and expertise needed to navigate the processes necessary to restore your good name are normally out of reach for the average consumer.
If they don’t have your financial data, you’re still in trouble. Because these guys are tech geniuses, they could systematically test your stolen passwords at different financial institutions. If access is granted, a thief suddenly has access to your credit or bank account. Ouch.
2. You’re robbed (and so are the businesses you trust)
It’s pretty simple. Identity thieves can steal your stuff (they did get their name for a reason). If you lose your cellphone, wallet or even an important piece of paper, you could be at risk. Identity crooks have been known to break into cars or rob houses just to get their hands on the tax returns kept inside.
What’s worse, if they rob someone else with your personal information, you might not even know you’re a victim. Your doctors, accountants, real estate agents, contractors and anyone else you’ve done business with all store your personal information. If your accountant accidentally leaves her tablet on an airplane, your Social Security number (SSN), address and financial statements could end up in the hands of a thief.
A perfect example happened about a year ago when a Washington state psychologist’s laptop was stolen. The laptop turned up a few weeks later in a pawn shop. The laptop contained patient SSNs, names, addresses and more. Fortunately in this case, the laptop was recovered by law enforcement and didn’t appear to be broken into. This of course, was a unique happy ending.
Worst case: Your smart phone is stolen. You purchase a new one and move on with your life, forgetting your smart phone contains a variety of financial apps, your personal and work email and saved addresses in your maps. Months later, you’re thinking of applying for a home loan. You check your credit reports, only to find suspicious activity that you don’t recognize. After weeks of investigation, you discover that an identity thief has been using your Social Security number to open new credit, apply for cash loans and even seek medical treatment. Those unpaid bills have all ended up in collections with your name on them. Looks like you’ll have to wait on buying that new house.
3. Someone goes through your mail
One of the oldest identity theft scams is dumpster diving—and it’s pretty much what it sounds like. Thieves will dive into your dumpster looking for mail you’ve tossed that contains your personal information. You might tear up your bills, but a thief merely has to piece together the foraged details.
Thieves looking for something more sanitary will simply have your mail redirected. All a thief has to do is submit a change-of-address request to the USPS, directing the mail to the thief’s own address. Thinking you moved, the USPS will promptly comply, sending your bills, newsletters and cards to the thief.
Worse case: Either method could lead an identity thief to a statement, bill or policy agreement containing your personal and financial information. While temporarily undetected, the thief uses your newfound information to access your financial accounts and steal your money.
As you can see, there are countless ways you could become a victim, and the effects can be extremely detrimental. You can take some measures to protect yourself, like shredding your mail or securing your devices, but other threats are out of your hands. The best way to defend yourself is with identity theft protection that includes quality restoration services. The protection features will help you detect the fraud sooner, and the restoration services ensure that if you do become a victim, you’ll have expert aid to help you recover quickly.
Have you experienced a similar scenario? Tell us about it in the comment section.
Kelsey Havens is a financial health enthusiast, consumer protection advocate and Content Manager at myFICO.