Kid Impacted by Synthetic identity fraud

The impact of identity theft – It’s not just about the money

Silent, stealthy, and devastating; yes, we are talking about identity theft.

By Lisa Baergen, Director of Marketing at NuData Security

The Center for Identity at the University of Texas, has observed 5,398 cases of identity theft, fraud and abuse in the U.S. since the year 2000. The majority of those cases occurred in the states of California, New York, Florida, and Texas according to the University’s ITAP report 2018. And, unlike what most would think, losing money is not what hurts victims the most.

Identity theft is that seemingly far-away problem that many still think belongs in online magazines or late-night conspiracy-theory conversations, until one day you can’t get a mortgage for that cute Downton-Abbey-like house you just put down an offer for, because someone got loans in your name and never paid them back.

But there’s so much more. The emotional toll stemming from these incidents is so high that the impact can range from stressful, to debilitating and life-altering.

ITAP findings confirm that these identity theft incidents are not only committed by outsiders but also – hold tight – by family insiders. Finding out, after being rejected for your student loan, that your father forged an affidavit and has been taking out loans under your name since you were five has a devastating economic impact and shattering emotional effects.

Identity theft is not uncommon. After all, Risk Based Security just found that 2.6 billion records have been exposed in data breaches so far in 2018. In the last few years, the personally identifiable information of more than half of all adults in the U.S. has been stolen, and fraudsters are using it as we speak. In case that wasn’t enough; criminals devise new ways to get to people’s information through phishing emails or malware every day.

The Target: You

Most people don’t think it will happen to them. The odds are so low for this to happen to me, right? The sad truth is that being technically savvy, reading blogs on how to spot phishing and taking other proactive measures alone won’t keep you safe. Anyone, from youth to seniors can find a surprise loan when they check their credit bureau. More than one million children were the victims of identity theft in 2017 alone, according to a report by Javelin Research. The same study found losses to identity theft to total $2.6 billion, with more than $540 million in out-of-pocket costs to families.

“How does this happen? My kid doesn’t even know how to write her name!”

Like one cheap inspirational quote on the internet would say, “the answer lies within”. Parents are the ones who fill out forms on behalf of their kids: for their daycare, a doctor’s appointment, summer swimming lessons, and more. Now, that rings a bell, right? How well protected do you think your kid’s swimming instructor’s database is?

With the identity theft industry growing, parents are advised to freeze their child’s credit for safety. It could be years before an ongoing identity theft scheme is discovered. After that, it could take several years, endless paperwork, and hours of online research to mitigate the damage. The same holds true for seniors who are already one of the top targets for cybercriminals.

Retirement planning firm True Link estimates that seniors lose up to $36.5 billion a year to fraud. This past February, the Justice Department went after 250 criminals who victimized more than a million Americans, most of them elderly. It was estimated that elder fraud schemes including identity theft caused losses of more than half a billion dollars. Once again, losses don’t just come in dollars, but emotional hardship as well.

If you are still skeptical about the non-economical damage from identity theft, then I would like to cite the findings of Dr. Mark Lachs, co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital. He discovered that seniors who have suffered abuse, including financial exploitation, die three times faster than those who have not experienced any abuse.

Identity theft goes even one step further: you are not exempt from it even after you pass away. Some criminals even resort to stealing the identities of the deceased. Who’s going to complain if you’re dead, right?

The Road Back

For corporations, remediating this problem is a long and sometimes expensive process. Financial institutions and online businesses are working to change this trend by making their systems more secure and authenticating their users with more than personally identifiable information (PII). According to the ITAP report, less than 1% of the thefts include behavioral biometrics, proving that authentication based on these technologies is highly reliable.

New authentication frameworks with passive biometrics and behavioral analytics ensure that customers are identified by their online behavior, instead of by PII such as Social Security numbers, names, addresses, and more. While these technologies are instituted, customers should stay alert for phishing emails, scams and any unusual requests for credentials, passwords or other personal information.

Lastly, before you fall in love with the house of your dreams, check your credit bureau to make sure you don’t already have five unknown mortgages and three banks chasing you.

Related to this post: Does my two-year-old have $100k in debt? – Stealing minors’ identities