4 Things You Should Know About Identity Theft

Identity theft occurs when an individual assumes another person’s identity in order to access resources or obtain credit and other benefits in that person’s name. The main benefits that motivate thieves are obtaining government benefits, having a clean criminal record, and acquiring financial and materialistic gains.

As part of your debt management, budgeting and financial planning efforts, you should always ensure that you protect your personal financial information. In order to protect yourself and your money, here are 4 things you should know about identity theft:

1. There are two kinds of identity theft.

The first kind of identity theft is an account takeover, wherein a thief uses information to access your personal accounts. This is obviously very dangerous as once they have access to your accounts, they can wipe out your life savings before you even realize it.

The second kind of identity theft is true name theft, wherein a thief uses your personal information to open new accounts. This can have major long-term repercussions such as a damaged credit rating or a hefty bill to lenders.

2. Your identity can be stolen in many ways.

You may wonder how identity thieves can gain access to your financial information, and the truth is there are several ways – some more effective than others.

One is called shoulder surfing, where someone watches you as you punch your pin into the ATM or card machine, or they listen as you say your number out loud. You should always cover your pin when entering it and be aware of your surroundings. Never share your pin with another person, no matter how trustworthy they may seem.

Another way your identity can be stolen is through dumpster diving. This is exactly how it sounds; someone goes through your garbage or recycling to find personal documents like bank statements, cheques or other records with your information. You should always shred important information such as this.

Lastly, someone may gain access to information through the internet and other online scams. If you’re ever asked to provide personal information to someone you don’t recognize, be wary.

3. There are ways to protect yourself from identity theft.

You should never assume that identity theft won’t happen to you, no matter how financially literate you might be. Here are some tips on how to protect your personal information:

  • Always sign your credit cards in permanent ink when you receive them and immediately cancel them if you aren’t using them regularly.
  • When disposing of personal records, use a paper shredder so you don’t become a victim of dumpster diving.
  • Never write down your ATM card numbers or pin numbers. Try to memorize all of your numbers. If you have to write them down, keep them in a safe place.
  • Practice safe computing by ensuring that you are only responding to emails from senders that you know. As well, do not trust all websites or be fooled by special offers that seem too good to be true.

4. You must report identity theft immediately.

If you think you may be a victim of identity theft, call your bank and credit card company and cancel your active cards. Review all of your account statements to identify unknown purchases and report them immediately. Lastly, call the police for assistance in finding the thief.

Identity theft is more common than you may think. Make sure you are extra careful with your personal information and financial records. Take a look at our identity theft educational resources for more information about protecting yourself.

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