As the number of people who have experienced some form of identity theft increases every year, online shoppers must be more vigilant than ever about sharing their personal information. Identity theft is a form of fraud where a person’s personal information, such as identification, account information, or payment information, is stolen — usually for financial gain. According to the Consumer Sentinel Network, which is funded by the Federal Trade Commission, consumers reported over $1.48 billion in financial losses in 2018 due to identity theft. That’s compared to $406 million in 2017. With the total money lost through identity theft rising, it is important for online consumers to understand the different forms of identity theft and the ways they can protect themselves.
How Common is It?
According to the Federal Trade Commission, 33% of all forms of identity theft is credit card fraud, making it one of the largest categories of identity theft. While most identity theft cases occur during the holiday season, identity theft is prevalent year-round as more and more people turn to online and mobile app shopping. Most people who prefer shopping online cite long lines, disorganized stores, and better deals as the top reasons for switching to online shopping.
The Different Types of Identity Theft
In order to understand what to do in case of identity theft, shoppers must understand some of the different types of identity theft that can happen if your personal information is breached.
- Financial Identity Theft: Financial identity theft is the form that most people think of when your financial information is compromised while shopping.
- Synthetic Identity Theft: Synthetic identity theft occurs when your personal information is taken and combined with other victims’ information to form a new individual. This new individual can use portions of your data to open new credit lines or take out loans.
- Criminal Identity Theft: Criminal identity theft can happen if someone gives out your information when they commit a crime. The act would not be noticed until you apply for a background check or are pulled over by law enforcement and run through their system.
- Account Identity Theft: Account identity theft can occur when your account information is compromised and someone uses your information to create a new account. For example, if you create a store credit account while shopping using an unsecured connection, your birthdate, social security number and address could be stolen.
Signs That You’re in Danger
One of the best ways to protect yourself against identity theft is to constantly check your accounts. Here are some warning signs to look for:
- You don’t recognize an account on your credit report. This can happen when someone opened an account using your information.
- You don’t recognize a charge on your credit or debit card. This can happen when someone is using your payment method.
- Your credit score unexpectedly dropped. This can happen when your cards are being overcharged, or unauthorized accounts are not being paid off.
- You are suddenly not receiving mail. This can happen when your mail is being forwarded to another location while the thief waits for new cards and account paperwork.
Keep an Eye Out
Keeping an eye on your identity is important so that you can quickly notice any abnormal activity. There are several free resources you can use to see if your identity has been stolen. You should check your free yearly credit report at each of the three credit bureaus: TransUnion, Equifax and Experian. You can get one free report every year from each of them. It is recommended to spread the free credit reports out a few months apart so that you can receive a free one every few months. It is extremely important to check your credit report when you hear news of security breaches, such as the Equifax security breach in 2017 or the Target security breach of 2013.
How to Protect Yourself
Knowing how to protect yourself while shopping online is your best defense against crimes like identity theft. Here are some tips to keep your information secure:
- Avoid accessing your bank account and other financial information while using a public connection.
- Avoid using automatic logins because that stores your user login information.
- Only shop at official websites with the proper certificates to avoid phishing scams that send you to fake websites. Look for an unbroken padlock security symbol next to the address bar and https instead of http at the head of the website address.
- Use a credit card instead of a debit card for more protection.
Identity theft has become a prevalent problem for online shoppers. While there are certain risks that are out of your control, there are still some things that you can do to protect yourself. Despite the risks, most people can feel confident shopping online as long as they take steps to protect themselves.