Identity theft, also known as identity fraud, is a crime in which an impostor obtains key pieces of personally identifiable information, such as Social Security or driver’s license numbers, in order to impersonate someone else.
The information can be used to obtain credit, merchandise, and services in the name of the victim, or to provide the thief with false credentials. In addition to running up debt, in rare cases, the impostor might provide false identification to police, creating a criminal record or leaving outstanding arrest warrants for the person whose identity has been stolen.
Long story short, identity theft is something that you NEVER want to happen to you. It can get you in a lot of trouble. How? The following list of 25 Scariest Cases of Identity Theft will give you an idea…or two.
Estate Identity Theft
Identity theft doesn’t stop after death. A thief may use a deceased person’s details to drain accounts, set up new loans, steal government benefits, and more. This type of identity theft typically impacts family members and friends of the deceased who were meant to receive an inheritance.
Employment Identity Theft
If a thief uses your information for employment purposes, there could be devastating effects on your employment history and your name. Since incorrect employment is reported to the Social Security Administration, you may face tax audits, lost tax refunds and errors on permanent government records. And if you apply for a new job, your employment history may be incorrect and misleading. These effects could take years to resolve.
Internet of Things Identity Theft
Currently the greatest online threat is identity theft. Within the IoT (Internet of Things; basically any device with an on/off switch that can connect to the internet) that threat will extend to identity theft of a device as well as a person. While we often hear about scary and unpredictable hackers trying to get to our data and money with all types of impressive hacks, we are often also our own greatest enemy.
Through careless safekeeping of our internet-connected devices we are playing into the hands of malicious thieves and opportunistic finders.
The financial gain for hackers looking to infiltrate the IoT lies in the data. In a rush to get items to market, companies often leave IoT devices unsecured and easy to access.
Hackers can gain access to personal information that can then be used to create fake identities.
Existing Account Takeover
Account takeover, aka account compromise, happens when a fraudster gets access to a genuine customer’s account. Any online account can be taken over, including eCommerce accounts, subscriptions, banks, credit cards, emails, etc.
How is that possible? Thieves can get a hold of account numbers in many ways, including online hacking, stealing mail or finding it in the trash, lifting wallets, and ATM and card reader skimming. Once the thieves obtain the account data, they may use the information right at a point of sale or access individual accounts online, over the phone, or through the postal service.
New Account Fraud
New account fraud is whereby a hacker uses another person’s personal information and good credit rating to open an account and borrow money using fake credentials.Often, the first step in identity theft starts by creating a new account online.
The hacker then borrows as much as they can. After they have reached their credit limit, they move on to open another account with different credentials. In the end, banks end up losing lots of money to defaulters. The hackers borrow the money knowing that the burden of repayment doesn’t fall on them.
New account fraud increased 27.8% worldwide in 2019, compared to full-year 2018 results, and more than 100% compared to 2014.
Mortage loan frauds can be initiated by consumers themselves or unscrupulous lenders, brokers, real estate agents or someone seeking a favor. Persons looking to purchase a home or homeowners seeking to refinance can be inadvertently caught up in mortgage fraud by acting on bad advice from an unscrupulous mortgage lender or real estate professional they trust.
There are really two different types of mortgage fraud. Traditional mortgage frauds involve activities undertaken in an effort to defraud the lender, such as trying to obtain a loan one cannot legitimately qualify for.
Other mortgage frauds target consumers, such as foreclosure prevention or loan modification scams in which unscrupulous individuals try to defraud homeowners who are in financial trouble.
Auto Lending Fraud
Financing a car is easy. You pick out your brand-new car. You walk into the finance manager’s office. You give your name, address, social security number and a few other pieces of personal information and you can walk out of the auto dealership with keys to that car, sometimes with little or no money down.
It’s fast and it’s easy. Car manufacturers like it – it allows them to move products quickly. Car dealers like it too, as it helps them make money fast. But the ones who really love it are the fraudsters! Apparently the speed comes at a cost.
We know criminals always shift their strategy to keep rolling in the money, so where have they invested their time to keep cars rolling in? It appears they are getting those cars through fraudulent applications and financing.
While car thefts have declined, auto finance fraud is making a long steadily increasing climb upward.
Loan Stacking Fraud
Online lending’s speed advantage has led to a growing problem: a type of fraud called loan stacking. Back in the day, to get a loan you’d have to visit a bank branch. You’d have to sit before a loan officer, in anxious anticipation of whether you’d make the grade. Those days are long gone.
Now, the rise of online lending has lead to near-instant approval of loans. Applicants can apply (and be approved for) for multiple loans in a matter of days. Or even hours. Technology allows for partially automated underwriting. Depositing often occurs within hours of approval. This is great news for consumers. It’s even better news for fraudsters…unfortunately.
Identity cloning just may be the scariest variation of all identity theft. Instead of stealing your personal information for financial gain or committing crimes in your name, identity clones comprise your life by actually living and working as you.
They may even pay bills as you – get engaged and married as you – start a family like you.
To sum things up, identity cloning is the act of an imposter literally assuming your life in a different location.
Synthetic Identity Theft
Synthetic identity theft is a type of fraud in which a criminal combines real and fake information to create a new identity. The real information used in this fraud is usually stolen. This information is used to open fraudulent accounts and make fraudulent purchases.
Here’s where the crime gets even more interesting. Since synthetic identity theft has no specific consumer victim, it can continue undetected for months, until the identity thief uses up the remainder of the credit line, leaving the lender, bank, or other financial institution holding the bag.
Criminal Identity Theft
Criminal identity theft occurs when someone cited or arrested for a crime presents himself as another person, by using that person’s name and identifying information.
The result is a criminal record in the name of the victim, who may not learn of the crime until it’s too late.
Biometric Identity Theft
Biometrics are part of the cutting edge of technology. Put simply, biometrics are any metrics related to human features.
The most common examples of a biometric recognition system is a smartphone’s fingerprint and facial recognition technology.
However, often the sensors on devices that unlock using fingerprints are not encrypted. Without this protection, hackers could steal copies of a user’s fingerprint from a device, clone it, and gain access to all of the files, emails, and data on the device – and anything else their fingerprint is used to open.
Medical Identity Theft
You may know to be on the lookout for identity theft, however, you might not realize that there’s a new fraud game in town, known as medical identity theft.
Essentially, this means that thieves are stealing people’s personal information to make claims against their health policies. Then after filing fraudulent claims, they pocket the cash and, in some cases, may even getting medical services.
Tax Identity Theft
Tax identity theft occurs when someone uses your compromised information to file a tax return in your name. They fudge the numbers, enter an unrelated refund dispersal option like a prepaid debit card, and make off with your money before you ever know that anything has gone wrong.
How can you know if someone has filed a return with your stolen information? Again, you may find out in different ways, but one common way is for the IRS to inform you.
They don’t usually call you up and say, “Guess what? Someone stole your identity!” Instead, it’s a lot more likely that the IRS will reject your legitimate tax return because someone has already filed using your Social Security number.
Financial Identity Theft
Financial identity theft occurs when someone uses another person’s personally identifiable information (PII) for financial gain. A simple example is someone accessing your bank account by stealing your debit card information and PIN.
A more sophisticated version of the crime would be when a fraudster uses your PII to add their name to one of your financial accounts.
Experts say that financial identity theft is often committed by someone who knows the victim, possibly a friend or family member. These are folks who may be able to easily put their hands on the necessary information and use it without the victim’s knowledge.
Senior Identity Theft
We’ve heard the stories about seniors who fall prey to scams: The 72‐year‐old who was billed for a pregnancy test. The retiree whose life savings were stolen in seconds. The grandmother who paid $100,000 for lottery winnings that never rolled in.
Seniors are vulnerable to identity theft scams because often they are more trusting, have more savings and home equity built up, and are less likely to closely monitor their credit and financial accounts.
Additionally, seniors may not be as technologically savvy as the criminals who attempt to steal their information.
Child Identity Theft
If your 3-year-old is getting pre-approved credit card offers in the mail, you both may have a problem: child identity theft. Child identity theft occurs when someone uses a child’s Social Security number to commit fraud.
That might include opening credit accounts, taking out loans or applying for government benefits or a job.
The crime can go undetected for years. Debts may pile up. Victims of child identity theft often discover it when they’re older. They might apply for a student loan, for instance, but get rejected due to damaged credit.
Bust-out fraud, also known as “sleeper fraud” is primarily a first-party fraud scheme. It begins when a person establishes good credit, either under their own name or by identity theft using stolen Social Security numbers.
The fraudster then behaves well for a period of time, making on-time payments, building credit, and applying for more cards and higher credit limits. After credit is built, the “bust-out” takes place. The fraudster maxes out all the credit accounts and ceases making payments.
Bust-out fraud is a highly sophisticated, coordinated strategy that involves committing multiple acts of application fraud. Bust-out fraud is, in large part, orchestrated by organized crime rings.
Credit Card Fraud
Unlike debit card transactions that come straight out of your bank account, credit cards are a line of credit extended by a company to consumers. These cards will typically issue a monthly bill for any charges rather than deducting the money directly out of your bank account.
Stealing someone’s credit card or using someone’s lost card is one example of credit card fraud. Criminals even steal credit cards from your mailbox.
They use these intercepted cards to make unauthorized purchases. If thieves gather enough personal information, they could also create a counterfeit card.
Sometimes all it takes is a thief with your card number and expiration date for your money to be in serious danger.
Pinless Debit Card Fraud
Though you can swipe your debit card at many places without a pin for transactions under a small amount and you can make much larger purchases with a signature. While this is much more convenient, it does open some new opportunities for security issues and fraud.
Debit Card Fraud
Debit card fraud occurs when a criminal gains access to your debit card number – and in some cases, personal identification number (PIN) – to make unauthorized purchases or withdraw cash from your account.
There are many different methods of obtaining your information, from unscrupulous employees to hackers gaining access to your data from a retailer’s insecure computer or network.
When your debit card is used fraudulently, the money goes missing from your account instantly. Payments you’ve scheduled or checks you’ve mailed may bounce, and you may not be able to afford necessities.
Online Shopping Fraud
The typical shopping scam starts with a bogus website or, increasingly, mobile app. Some faux e-stores are invented from whole cloth, but many mimic trusted retailers, with familiar logos and slogans and a URL that’s easily mistaken for the real thing.
They offer popular items at a fraction of the usual cost and promise perks like free shipping and overnight delivery, exploiting the premium online shoppers put on price and speed. Just be careful next time….Nike shouldn’t read NiKe. See what I did there?
Social Security Number Identity Theft
What exactly can a thief do with your Social Security number? The answer isn’t pretty, especially if they also have access to other personal data.
Whether you’ve had your Social Security number stolen or are trying to keep it secure, it’s important to know what criminals can do with it, so you know how to recognize red flags.
One of the identity theft-related crimes most people think of is credit card fraud. However, credit card fraud is just one of the crimes that can be committed if a criminal assumes your identity with your Social Security number and other personal information.
While stolen credit cards and the like can be canceled and replaced, it can be difficult to obtain a new Social Security number.
Driver's License Identity Theft
What can happen in terms of identity theft if your driver’s license falls into the hands of a would-be identity thief? In many cases it depends on how much your thief resembles you if they have any expertise in fake ID production, and how willing they are to falsely represent themselves to law enforcement.
They cannot open a credit card or mortgage account but they can write your driver’s license number on a check, give your license number (without the actual license) to a police officer at a traffic stop, or doctor/manufacture a license with your number to pass off to those who require ID (bars, employers, police, etc.)
Driver license fraud includes the use of another person’s identity, the submission of counterfeit identity documents, and all other activities intended to obtain a driver license or ID card by a person or for a person who is not eligible for issuance of such a document.
Mail Identity Theft
With so many digital ways to attack someone’s personally identifiable information, it might seem strange that “old-fashioned” methods of mail fraud are still prevalent.
Nevertheless, scammers target individuals with unlocked mailboxes, steal the mail and by changing the address they redirect their mail to a new address. After receiving the victim’s mail, the scammer can access sensitive documents that arrive by post and take advantage of credit card offers.
Victims of mail theft often do not realize they have been victimized until their credit record and good name is ruined.