Identity theft occurs when someone obtains someone else’s personal information, such as a Social Security number, home address, date of birth or bank account data, and uses it for fraud or other illicit purposes.
It’s a massive problem: Identity fraud cost 40 million Americans a combined $43 billion, according to a new AARP-sponsored report from Javelin Strategy & Research. Last year’s losses were $9 billion less than 2021’s — a drop that the report attributes to “the relentless efforts of the financial services industry to keep criminals at bay.”
Criminals constantly adjust their tactics, so consumers need to be stay informed and alert to identity fraud’s many forms: Credit reporting agency Equifax lists eight types. (Some, such as tax ID theft, are discussed in greater detail in AARP’s Fraud Resource Center.
Scammers’ methods range from old-school (stealing your mail) to high-tech (hacks of banks, retail chains and other companies that stockpile consumer data). They might pretend to be from utilities, banks or big tech firms to get their hands on identifying information, or they send phishing emails with links that can infect your device with data-harvesting malware.
Most often, they claim to represent government agencies, soliciting personal or financial data on the pretext of helping you collect benefits or navigate bureaucracy. That includes a recent surge in criminals pretending to be someone in your social network claiming they just received a grant from the U.S. Department of Health and Human Services (HHS), then guiding you toward fake websites or phone numbers where you’ll be asked for personal information.
Once they have your private data, scammers may use it to open credit accounts and make big-ticket purchases you might not discover until the bills come due. They might get medical treatment, file tax returns or take out loans in your name. The costs are counted not just in money but in time spent chasing down phony accounts, repairing damaged credit and reestablishing your identity with government and financial institutions.
As many ways as there are for fraudsters to poach your identity, there are also many simple steps you can take to help keep them at bay.