Identity fraud

Discover how to protect yourself against identity fraud, a sophisticated form of deception that exploits personal information.


What is identity fraud? A definition

Identity fraud is a crime where someone’s personal information is used without their permission for fraudulent activities. It can range from unauthorized credit card transactions to opening new accounts or even committing crimes under someone else’s name. The impacts of identity fraud are significant, affecting not only individuals’ financial health but also potentially damaging their reputation and credit status. With the rise of digital data and online transactions, identity fraud has become a growing concern, necessitating increased awareness and preventive measures.

Identity fraud vs. identity theft: What’s the difference?

Identity theft and identity fraud, while closely related, involve different stages in the criminal process. Identity theft is the initial step where an individual’s personal, private, or financial information is obtained without authorization, often through methods like phishing, hacking, or even physical theft. This theft becomes the foundation for the next stage, identity fraud.

Identity fraud occurs when the acquired information is utilized in deceitful activities, such as opening fraudulent accounts or making unauthorized transactions. The sophistication of identity theft tactics has evolved, with cybercriminals employing advanced techniques to access and exploit personal data. This progression underscores the importance of vigilance and proactive measures in protecting one’s personal information. Some common examples of identity fraud include:

  • Creating fake identification or passports
    • Opening fraudulent credit card accounts
    • Establishing fake bank accounts
    • Submitting false loan applications
    • Making unauthorized withdrawals
    • Conducting fraudulent transactions

These fraudulent actions affect both the individual whose identity is stolen, and the entities involved in the transactions. The long-term impact on the victim’s credit score is considerable, as fraudulent activities can linger on their credit report. Regular credit report checks are essential for early detection of any suspicious accounts or charges, helping to mitigate the impact of identity fraud.

How to prevent identity fraud

To avoid identity fraud, consider the following actions:

Protect your address: Ensure your address is secure. If you receive mail from unknown people, investigate why. In the US, opt out of the ‘edited’ register when registering to vote, reducing junk mail and unsolicited marketing. Additionally, use the Mail Preference Service (US) to stop marketing letters[AB1] , secure mail in communal areas, and redirect mail when moving.

Safeguard your bank accounts: Be cautious of unsolicited contacts from your bank. Regularly check your accounts and follow up on missing statements. Dispose of personal or banking details securely. Use services like American Express SafeKey, MasterCard SecureCode, or Verified by Visa for card security. Report any suspected misuse of your bank account immediately.

Protect your phone: Avoid responding to unsolicited text messages. Register with the appropriate telephone marketing service in your country to block marketing calls. Install antivirus software on your phone.

Secure your computer: Keep your computer’s security software updated. Use the latest versions of web browsers and operating systems. Be careful with links in emails and verify the security of websites during online transactions. Look for ‘https’ in web addresses and a padlock icon in the browser bar. Be skeptical of emails from bank, access bank websites directly, and have an updated antivirus software installed on your computer.

Common ways criminals steal your identity

There are several common methods criminals use to steal your identity:

  • Phishing attacks: These involve scammers impersonating trustworthy entities through emails, messages, or phone calls. They might pose as government agencies like the IRS, asking for sensitive information under the guise of “verifying” your identity. These messages often include links that, when clicked, install malware on your device, compromising your personal data.
  • Physical theft: Personal items such as your driver’s license, ID, or mail can contain enough information for an identity thief. Thieves can use this data to impersonate you or access your accounts.
  • Shoulder surfing: This occurs when someone watches as you enter sensitive information on your device in public. Advanced tactics include intercepting your Wi-Fi connection to eavesdrop on your online activities, known as a man-in-the-middle attack.
  • Social engineering attacks: These are manipulative tactics where thieves use psychological tricks to make you reveal personal information. They might research your background to use familiar details against you, creating a false sense of security and trust.
  • Synthetic identity fraud: This sophisticated form of fraud involves creating new identities by combining real and fake information, such as Social Security Numbers with fabricated names. Fraudsters use these synthetic identities to deceive financial institutions, government agencies, or individuals. Often difficult to detect, this type of fraud targets people less likely to regularly check their credit reports, like children or the elderly. Over time, these fabricated identities gain credibility, as fraudsters slowly build a credit history before eventually exploiting it for substantial financial gain.

Additional methods include dumpster diving for discarded documents containing personal information, hacking into personal or corporate databases, skimming devices on ATMs or card readers, or exploiting public records and social media to gather personal data. Each of these methods highlights the need for vigilance and protective measures to safeguard personal information.

How to protect against identity fraud: 8 steps

Protecting against identity fraud is essential in securing your personal and financial information from unauthorized access. This section outlines practical measures to safeguard your digital and physical assets, ranging from mobile and computer security to vigilant monitoring of financial activities and personal information.

1: Secure your phone: Mobile devices often contain a wealth of personal information and are frequent targets for cybercriminals. Protect your device by:

  • Installing reputable antivirus software.
    • Regularly updating your operating system and applications.
    • Being cautious about unsolicited messages and avoiding clicking on suspicious links.

2: Secure your computer: Your computer is a gateway to your personal and financial information. Enhance its security by:

  • Keeping your security software, browser, and operating system up-to-date to defend against viruses, malware, and other online threats.
    • Practicing safe browsing, especially when handling financial transactions. This includes using secure, reputable websites and being wary of unsolicited requests for personal information.

3: Safeguard your IDs and wallet: Personal identification documents and your wallet are critical to protect. Keep them secure by:

  • Storing them in a safe place, away from potential thieves.
    • Minimizing the risk of loss or theft by carrying only what is necessary.
    • Taking immediate steps, such as contacting relevant authorities or institutions, if your identification or wallet is lost or stolen.

4: Avoid public Wi-Fi and use VPNs: Public Wi-Fi networks can be hotspots for data interception. Protect your data by:

  • Avoiding carrying out sensitive transactions while on public Wi-Fi.
    • Using a VPN (Virtual Private Network) to encrypt your internet connection, ensuring your online activities remain private, even in public spaces.Secure online accounts with two-factor authentication: Elevate your account security by:
    • Enabling two-factor authentication wherever possible. This adds an extra layer of security, making it more difficult for unauthorized individuals to access your accounts.

5: Monitor Credit Reports and Consider a Credit Freeze: Keep an eye on your financial health and spot identity fraud early by:

  • Regularly checking your credit reports.
    • Considering a credit freeze, which restricts access to your credit report, making it more challenging for identity thieves to open new accounts in your name.

6: Reduce your digital footprint. Limit your exposure and reduce the risk of identity theft by:

  • Being mindful of the information you share online.
    • Adjusting privacy settings on social media and other online platforms to limit the amount of personal information that is publicly visible.

7: Protect your address: Your postal mail can be a source of sensitive information. Secure your mail by:

  • Reducing unsolicited mail through opt-out services.
    • Ensuring your mailbox is secure, especially in communal living situations, to prevent unauthorized access.

8: Bank account vigilance: Financial institutions are common targets for identity thieves. Safeguard your accounts by:

  • Treating unexpected communications from your bank with skepticism and verifying their authenticity.
    • Managing your bank statements and sensitive documents securely, ensuring they are disposed of properly, such as through shredding.

By taking these proactive steps, you can significantly strengthen your defenses against identity fraud, safeguarding your personal and financial wellbeing.

To safeguard your devices from malware, using antivirus software is crucial. Malware, a harmful software employed by hackers, can spy on your activities, steal personal data, or lock your devices, demanding a ransom. Keyloggers can record everything you type, such as passwords and emails, and send this information to hackers.

Related articles:

What is identity theft?

What is a phishing email?

What is phishing?

What is a data breach?

What is social engineering?

What is digital footprint?

What is catfishing?


Who are the victims of identity fraud?

In the US, about 33% of people have experienced identity theft, with over 300,000 annually targeted by phishing-related scams. Annually, over 50,000 incidents of personal data breaches occur, predominantly affecting individuals aged 30 to 39.