What is Identity Theft?

Key insights:

• Identity theft happens when someone uses your personal information without permission for fraudulent purposes
• Common methods occur through data breaches, phishing scams, hacking and stolen personal items
• Learning how to help prevent identity theft involves creating strong passwords, monitoring financial statements and setting up fraud alerts
• Victims may experience impacts on their credit score and financial health, but there are helpful steps to recover

Identity theft is a crime that involves the unauthorized use of someone’s personal information for fraudulent purposes. There are several different types of identity theft that target various parts of your life, including financial and medical identity theft, which are the most common. Each type involves a thief illegally using someone else’s identity to access and misuse their personal information.

To help protect yourself, it’s important to first understand the risks. Let’s review the causes and examples of identity theft, along with the steps to take if you ever become a victim.

How does identity theft happen?

Identity theft typically begins when criminals gain access to your personal information without your permission. The most common ways someone might access your information without your permission include:

• Data breaches
• Mail (finding your bank account or credit card statements)
• Malware (software that may steal your data without you knowing)
• Physical theft of credit cards, computers and mobile phones
• Hacking computers and unprotected internet browsing
• Phishing emails and texts

Common examples of identity theft

Here are a few common examples of identity theft:

• Someone steals your credit card information to make unauthorized purchases, potentially creating debt in your name
• A thief obtains your personal details, such as a Social Security number, to open new credit accounts or take out loans, leaving you responsible for debts you didn’t incur
• Somebody calls you posing as a bank employee to get your banking information, then drains your account

The consequences of identity theft

Identity theft may have a major and lasting impact on your financial health and credit score. Victims often find themselves shouldering the responsibility for outstanding payments and debts a thief incurs in their name. Resolving identity theft can also be time-consuming, involving paperwork and contacting multiple companies or institutions.

How to help prevent identity theft

It’s highly important to protect your personal and financial information. Here are a few habits you can adopt to help you reduce the risk of identity theft:

Guard personal information

Using strong, complex passwords for all digital accounts makes a big difference. Consider using a unique password and avoid reusing it across accounts.

Enabling 2-factor authentication is also helpful. You’ll receive an email or text message containing a code for final authentication before signing in to an account. Installing software updates regularly on any electronic device helps ensure you have access to the latest security features.

Be cautious of phishing scams

Phishing scams are often disguised as emails and texts from people or sources familiar to you. These messages typically ask for personal information, request money or send you a file or link to open.

Whenever you communicate online, maintain caution when clicking links you don’t recognize or when providing personal details. Taking the time to verify the source or point of contact before moving forward may save you from potential fraud.

Monitor financial statements regularly

Regularly monitoring your financial statements is a great habit, even if you’re not a victim of identity theft. Review any monthly credit, bank account or other financial statements for unfamiliar charges or withdrawals.

Use credit monitoring and fraud alerts

Credit monitoring and fraud alerts are 2 tools that can help protect you against identity theft. Looking through your credit reports is a great way to check your overall financial health and help ensure there has been no suspicious activity. Adding a fraud alert to your credit report or credit card allows creditors to take additional steps to verify your identity before approving new lines of credit or accessing your credit report.

What to do if you’re a victim of identity theft

If you think you’re a victim of identity theft, reporting it immediately may help limit the damage. You can contact the Federal Trade Commission (FTC). Contacting local law enforcement and filing a police report might also be necessary.

Alert your banks, credit card companies and any other financial institutions as soon as possible. Consider reviewing your credit reports with the major credit bureaus as well to note any suspicious or unfamiliar accounts or transactions. Freezing your credit, replacing your existing cards and setting up fraud alerts may also be necessary to block any new unauthorized accounts from being created.

Being the victim of identity theft is often a difficult experience, but there are ways to find support, fix your financial standing and help protect yourself moving forward.

Identity theft FAQs

What is the most common form of identity theft?

Financial identity theft is one of the most common forms of identity theft. This happens when someone uses your personal information to open new credit accounts, take out loans or access your existing bank accounts without your permission.

How do I know if my Social Security number has been compromised?

You can check your credit reports regularly for any unfamiliar accounts or inquiries. You can also contact the Social Security Administration by phone or through the official government website SSA.gov.

How can I help protect myself from identity theft?

While no single method guarantees protection, combining several habits can build a strong defense to help protect yourself from identity theft. Habits include using unique passwords, enabling 2-factor authentication, regularly monitoring your financial accounts and being cautious about sharing personal information online.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.