Identity Theft Protection Essentials

In the words of Dwight Schrute, "identity theft isn't a joke." It's true - identity theft is a massive problem that only continues to rise. In fact, a staggering 47% of Americans experienced financial identity theft in 2020. Identity theft can damage your credit and cost you and your family time and money in trying to repair damages.

So what can we do about it? In this article, we'll discuss:

  • Different Identity Theft Schemes
  • Ways You Can Protect Yourself
  • What to do in the Event that Your Identity is Stolen

What Is Identity Theft?

Identity theft is when a bad actor steals your personal sensitive information (think name, driver's license, address, SSN, login information, etc.) and uses it for financial gain without your permission. For example, a thief could use your information to apply for loans, open new accounts, make credit card purchases, get healthcare services, steal your tax return, and more.

Identity theft can be very harmful if it happens to you, as it can severely damage your credit. Further, it can cost a lot of time, money, and stress to restore your financial situation and prove your name.

There is no sure-fire way to prevent identity theft from happening to you. However, if you know the common schemes and how they are performed, and follow some proven tips, you'll be more prepared to protect yourself.

What Are The Different Schemes?

Because our lives are digital now for all intents and purposes, your personal information is in perpetual risk of being stolen. Here are some of the most common identity theft schemes.

Social security number schemes

If a fraudster gets hold of your social security number (SSN), the possibilities are nearly endless. Think about it - whenever you need to prove your identity (say, when calling your bank), you use your SSN.

If you think someone has access to your SSN, contact the Social Security Administration as soon as possible.

Tax identity theft schemes

This happens when someone uses your SSN to file a tax return under your name to receive your tax refund. This is usually found when you go to file your tax return and find out it was already processed by the Internal Revenue Service. This scheme has become more common in recent years.

If you believe you were the victim of tax identity theft, contact the IRS with an Identity Theft Affidavit as soon as possible.

Mortgage fraud schemes

This happens when a thief steals your SSN or mortgage account number and uses them to open a home equity line of credit or second mortgage and run off with the cash.

If you suspect anything of this nature, contact your mortgage lender right away.

Credit card fraud schemes

This happens when someone gets access to your card information and uses it without your permission. This could cause damage to your credit score by making your balance spike.

The good news is that most major credit card companies now have protections in place to detect fraudulent purchases right away to prevent any serious harm in the long-term. Additionally, most remove the charges from your account after they are detected.

Account takeover fraud schemes

This happens when someone takes control of one of your online banking accounts without your permission. Once in, the bad actors usually transfer money to other accounts. If you ever suspect an unauthorized individual has access to your account, contact your financial institution right away.

To avoid this type of identity theft, set up two-factor authentication on all of your devices you use to access your banking accounts.

Online shopping fraud schemes

This happens when a band actor gains access to your account and uses your saved card information to make unapproved purchases. They can do this either by hacking into your account on an unsecured public Wi-Fi network or by phishing scheme.

Whenever making purchases online, stay on a secured private Wi-Fi network and never click on suspicious email links.

Medical fraud schemes

This happens when someone receives medical care by posing as another person to access their medical benefits. When this happens, the victim pays the price for the thief's medical care.

Make sure to always review your medical claims with your healthcare insurance company account. If anything looks suspicious, reach out to your insurer and let them know to correct the issue.

How Do Bad Actors Get Access To Your Information?

Just like the number of identity theft schemes, there are also loads of ways bad actors can get access to your personal information. The most common ways are through data breaches, browsing on an unsecured connection, and malware phishing attacks. Less common methods involve accessing your personal information through physical means. These could include looking through your mail, finding your lost wallet, and credit card skimming.

How To Prevent Identity Theft

Since it's impossible to completely secure your personal data, there is no way to completely prevent your identity from being stolen. However, there are steps that you can take to make it much less likely. Here are some good ways to protect your identity.

Avoid public Wi-Fi

This is good all-around advice - never use public Wi-Fi. It puts yourself at unnecessary risk for all different kinds of cyber crime.

Use antivirus software

Just like avoiding public Wi-Fi, it is just a good idea to always use antivirus software. It can prevent attacks from occurring that might put your personal information at risk.

Freeze credit

If you don't need to apply for loans in the near future, it can be a good idea to freeze your credit with all three credit reporting agencies. This makes it so no one, including you, can look at your credit report, apply for loans, or open credit card accounts.

Check mail regularly and shred documents

Since physical documents can be a great way for identity thieves to access your personal information, it's a bad idea to leave those documents hanging around (in your mailbox or your garbage can).

Use a password manager for identity theft protection

Consider this scenario - you use the same password for all of your accounts. There has been a massive data breach on a major retailer where you regularly shop online.

An identity thief takes your password and tests it out on other major accounts, and BOOM! Now they have access to all of your accounts. They stole your identity.

To avoid this, make sure you use a different password for all of your accounts. An easy way to do this is to use a password manager service.

To add an additional layer of security, use two-factor authentication whenever possible.

Review credit card and bank statements regularly

Most credit card companies and banks do a good job of alerting you when suspicious activities are detected on your account. However, no system can be perfect. Always check your statements to ensure that all your purchases were in fact made by you.

You can also use a service like Credit Karma that provides a free credit report to you that shows you a lot of information regarding any accounts you have open in your name.

Use an identity theft protection service

Last but not least, use an identity theft protection service. These services vary in what they provide, but they all monitor websites and databases for suspicious activity and use of your personal information, including your SSN, ID number, and bank accounts. Additional services may include credit reporting and providing copies of your credit reports. Many services also provide family plans that protect your whole family.

With protection service, you receive fraud alerts when the service detects any of your personal information on the Internet. Better yet, if your information is found, the protection service works for you to help resolve the issue. Some also provide identity theft insurance at an additional cost.

Protection services are very helpful as they can help you spot identity theft fraud early before it can negatively affect you in the long-term.

How To Report Identity Theft

If you feel you are the victim of identity theft, you should file a report with the Federal Trade Commission (FTC). This will launch an investigation. Additionally, in order to restore your name, some creditors, banks, or debt collection agencies might require you to also file a police report.

To file a report with the FTC, visit and complete the identity theft report. You can also file by calling the FTC at 1-877-FTC-HELP.

To file a police report, provide your FTC identity theft report, your photo ID, address, and any proof you have of the identity theft.


There is no sure-fire way to protect yourself from identity theft, although some of the tips above in identity theft protection are beneficial. However, we hope this article provides some good steps you can take to protect yourself. And in the unfortunate event that your identity is stolen, you should know the steps you can take to resolve the issue and restore your name.