How does identity theft happen? Ways how someone can steal your identity

How identity theft happens online

Online methods account for an increasing share of identity theft cases. Even tech-savvy people fall for sophisticated attacks because criminals constantly refine their tactics. Below are the most common ways that identity theft occurs, along with practical steps to reduce the risk.

For a broader explanation of what identity theft is, check out our full guide.

1. Phishing and fake websites

Phishing attacks happen when criminals send emails or social media messages that appear to come from trusted organizations, such as banks, retailers, employers, or government agencies. The message usually prompts you to take immediate action such as log in, confirm details, or open an attachment.

Modern phishing messages rely on email spoofing and are extremely convincing. Many use accurate branding, realistic sender addresses, and familiar language, making them difficult to spot at a glance. 

Prevention tips: Don’t follow links in unexpected messages. Visit the company’s website by typing the address yourself or using a saved bookmark.

2. Smishing 

Smishing uses text messages instead of emails or DMs, but the mechanics are the same. Because text messages feel more direct and urgent, they're easier to trust and to act on without thinking.

Common examples include fake delivery updates, bank alerts, or warnings that your account will be locked unless you respond. These messages may lead to fake login pages, attempt to install malicious software, or collect details such as passwords and account numbers.

Prevention tips: Treat unexpected texts with the same caution as suspicious emails. Avoid clicking links and contact the company through its official website or support number instead.

3. Vishing 

Vishing scams are carried out over the phone. The caller presents themselves as someone you're likely to trust, such as a bank representative, a government official, a technical support agent, or a service provider you already use.

Caller ID spoofing is often used to make the number look legitimate. Once the call connects, the scammer introduces a reason for urgency —: a compromised financial account, an unpaid balance, or supposed legal action. The goal is to push you into sharing sensitive information before you have time to verify the claim.

Prevention tips: End the call and contact the organization directly using a number from its official website.

4. Data breaches

A data breach occurs when a company or organization responsible for storing personal information is hacked. This is one of the most damaging ways identity theft occurs because millions of people’s data can be exposed at once.

Breaches commonly affect healthcare providers, retailers, financial institutions, government agencies, and online platforms. Stolen data (like names, birthdates, Social Security numbers, addresses, or login credentials) often ends up for sale on the dark web. Victims of identity theft may not learn about it for months, leaving plenty of time for criminals to misuse the information.

Prevention tips: Use unique passwords for every account and enable two-factor authentication so breached login details can’t be reused elsewhere.

5. Malware and spyware

Malware is software designed to infiltrate your device. Spyware, a common type of malware, runs in the background and tracks what you do.

Your device can be infected with malware in simple ways, such as by downloading infected files, clicking fake software update prompts, visiting compromised websites, opening malicious email attachments, or interacting with deceptive online ads. Some malware includes keyloggers, which record what you type and capture passwords, Social Security numbers, and payment details over time.

Prevention tips: Keep your devices updated, use trusted security software, and be cautious about downloads or prompts that appear unexpectedly. 

6. Public Wi-Fi and unsecured networks

Public Wi-Fi networks, such as those in airports, hotels, cafés, or libraries, often lack strong encryption. When you connect without protection, the information you send and receive may be visible to others on the same network.

In “man-in-the-middle” attacks, a hacker positions themselves between you and the network, capturing login credentials, financial details, and personal information.

Prevention tip: Avoid accessing sensitive accounts on public networks. When you do need to connect, use a VPN to encrypt your connection and reduce exposure.

7. Social media accounts

Social media platforms make it easy to share details about daily life, and those details add up. Birthdates, locations, pet names, family connections, and workplaces can help criminals answer security questions or build a convincing profile for synthetic identity theft.

Criminals may also use fake profiles to gather information or trick people into revealing more than they intended.

Prevention tips: Keep profiles private and limit what you share. Be cautious accepting friend requests from people you don’t know.

8. Dark web purchases

The dark web is a marketplace where stolen data is traded. If your data has been leaked, you may find your Social Security number (SSN), email address, or phone number on the dark web, available for purchase to be used in further scams.

Because this data circulates over time, identity theft doesn’t always follow a breach immediately. A victim may later discover their email address on the dark web, paired with additional details and sold as part of full identity profiles, sometimes years after the original breach occurred.

Prevention tip: Sign up for an online identity theft protection service and check whether your email or passwords have been exposed.

How identity theft happens physically 

Offline methods rely on access rather than technology. While they may seem old-fashioned, they remain effective and account for a significant share of ID theft cases.

1. Lost or stolen wallets

A lost or stolen wallet gives criminals immediate access to identifying information and payment cards. Even a single document can provide enough detail to commit identity theft and fraud, like full name, date of birth, or Social Security number (SSN). Scammers can use this information directly, combine it with other stolen data, or simply sell your SSN on the dark web.

Prevention tips: Protecting your SSN starts with keeping your Social Security card out of your wallet. Limit the number of cards you carry and report theft as soon as possible.

2. Lost or stolen phones 

Phones and tablets often hold more personal information than wallets. If a device isn’t properly secured, a thief may be able to access email and online bank accounts, stored passwords, photos, and payment methods or use the device to reset other account credentials.

Prevention tips: Enable automatic screen locking, use biometric security such as fingerprint or facial recognition, and protect devices with strong passcodes.

3. Mail theft

Mail is still a common source of sensitive information. Bank statements, tax documents, medical insurance materials, and preapproved credit offers all pass through the postal system, and each can be valuable to identity thieves.

Criminals may steal envelopes directly from mailboxes, take packages from porches, or target shared mail areas in apartment buildings and rural locations. Once they have your mail, they can use the information to access accounts, open new ones, or commit other types of financial or medical identity theft.

Prevention tips: Use a locked mailbox, collect mail as soon as possible, and switch to paperless billing when possible.

4. Dumpster diving (trash theft)

Identity thieves don’t mind getting their hands dirty. Documents thrown away intact, such as bank statements, credit card transaction receipts, medical paperwork, or tax return forms, can reveal enough detail to support identity theft or targeted scams.

Prevention tip: Shred documents containing personal or financial information before disposal and tear up labels or packaging that display your name or address.

5. Card skimmers

Debit and credit card skimmers are small devices attached to card readers, especially at ATMs, gas pumps, and ticket kiosks. When you insert your card, the skimmer copies the information on the magnetic stripe. Criminals may also attach cameras or fake keyboards to capture PINs.

Newer shimming devices work on chip cards by reading data between the chip and the machine.

Prevention tips: Use ATMs located inside bank branches and inspect card readers for unusual details or loose components.

6. Shoulder surfing

Shoulder surfing is simple but effective — someone observes you entering sensitive information, often without drawing attention. It often happens in busy environments where people are distracted, such as supermarkets, airports, or outdoor ATMs.

Prevention tip: Shield your screen or keypad with your hand and be aware of people standing unusually close.

What are the warning signs of identity theft?

Spotting the signs of identity theft early gives you a much better chance of stopping fraud before it spreads to multiple accounts or affects your credit. If you suspect your information is compromised, watch for these common warning signs:

• Unfamiliar charges or withdrawals on bank or credit account statements.
• Being denied credit unexpectedly or noticing a sudden drop in your credit score.
• Alerts about new accounts and cards you didn’t sign up for.
• Calls or letters from creditors and debt collectors about purchases you don't recognize.
• Fraud alerts from your bank or the three major credit bureaus.

How to prevent identity theft

While thieves have many different ways to steal sensitive data, you can take some steps to protect yourself from identity theft. These include:

• Using strong, unique passwords.
• Enabling multi-factor authentication.
• Monitoring credit reports and bank statements.
• Limiting what you share online.
• Shredding documents.
• Avoiding unsecured Wi-Fi.
• Being skeptical of unexpected calls, emails, and texts.

For more details, see our full guide on how to prevent identity theft. And just as important as prevention is knowing what to do if your identity is stolen — acting quickly can limit financial damage, stop further misuse, and make recovery much easier. 

Final thoughts

When you look at identity theft statistics, one pattern stands out — most cases start with small, preventable exposures rather than sophisticated hacking. So you don’t need technical expertise to keep your identity and finances secure — awareness and consistent habits go a long way. 

And if your information does get compromised, don’t get stuck dealing with identity theft alone. An identity theft protection service like NordProtect will guide you through recovery and reduce the burden during a stressful time.