Warning signs of identity theft

1. Suspicious transactions

Suspicious transactions in your bank account can be the most obvious sign of identity theft. In fact, any unknown or dubious bank account changes (such as mysterious money withdrawals or unauthorized loans) can indicate that you may have an imposter using your identity for personal gain. Malicious actors may even conduct small deposits or withdrawals to avoid detection and verify account access before making a big transaction. While spotting some of these suspicious activities may be difficult, you should immediately contact your bank upon noticing even the smallest unauthorized change.

2. Surprise drops in credit score

If your credit report shows an unexpected drop in your credit score, someone may have stolen your identity. In some identity theft cases, cybercriminals remain undetected long enough to take out new credit or open new accounts in your name, significantly reducing your credit score. It's also possible that your credit report may include unfamiliar inquiries. That could mean someone has applied for credit using your personally identifiable information. 

3. Unexpected bills and statements

You may have already noticed that most identity theft cases often include keywords such as “unexpected,” “unusual,” and “bank account.” Which means that you should also consider it a warning sign of identity theft if you see unexpected bills and payment statements in your financial accounts or mail. 

Recovering lost money depends largely on the timing (how quickly the victim reported the fraud), so an instant reaction may raise the chances that the bank or service provider will reverse the transaction.

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4. Unusual activity in your Social Security account

Your Social Security number is a high-priority target for identity thieves. While you may not be able to physically monitor it 24/7, you can set up a free account with the Social Security Administration (SSA) to quickly access your SSN information. The platform allows you to easily manage your benefits, keep an eye on the status of your applications, or regularly check if someone is using your identity via SSN. 

Scammers may get their hands on your Social Security number even if you try your hardest to protect it. Suspicious activity in your SSA account or discrepancies on the Social Security statement (such as someone else collecting your benefits without permission) are the first signs that someone might be using your SSN to commit identity theft (or synthetic identity theft). If you notice any of these indicators, inform the platform's administrators and your bank immediately.

5. Calls from debt collectors

A call, an email, or a letter from a debt collector agency can be a shocker and a late indication of an identity theft. However, while it may be a legitimate warning sign, scammers can pose as a representative of such an agency to steal your personal or financial information. So before engaging with the debt collectors, double-check whether the agency or individual is a legitimate entity.

If the call is real, and you're held accountable for a payment you didn't authorize, review your credit history for collection accounts (or unauthorized credit accounts) and explain the situation to the debt collector. Additionally, report the incident to the Federal Trade Commission (FTC) or another institution that deals with financial crimes in your country (for example, Action Fraud in the UK or the Canadian Anti-Fraud Centre in Canada).

6. Denial of loan and credit applications

If you have an impeccable (or pretty good) credit score, a denial of a loan or credit application may signal that you've suffered identity theft. Since the lender must explain the reason for loan or credit card refusal, you'll likely catch the discrepancies immediately. However, even if the reasoning sounds believable, you should still check your credit report for unexpected "delinquencies" or "collections" that may signify foul play. If the suspicions turn out to be true, take action immediately.

7. Rejection of tax return

Denial when filing your tax returns signals potential tax fraud. Which, provided you're not scamming the government, can only occur as a result of tax-related identity theft. Contact the IRS immediately if you get denied when filing a tax return. If you encounter other issues, for example, surprise letters about tax returns, unexpected IRS notifications of new accounts in your name, or unrequested tax transcripts, follow the same procedure.

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

If you find out you’ve become a victim of identity theft, you must act quickly. Putting guardrails on your finances and informing the right authorities are the first and main steps that may help you mitigate the damage. Here’s what you should do if your identity has been stolen.

• Notify your bank and credit agencies. When facing identity theft, first make sure to secure your financial accounts. Contact your bank and credit agencies and notify them about the situation. The bank will then freeze your account (the credit agency will freeze your credit reports) to prevent criminals from withdrawing and transferring your money. While not guaranteed, your quick reaction might also help the bank reverse unauthorized transactions before scammers can withdraw stolen funds.
• Contact the FTC. Once you’ve secured your bank account, report the incident to the FTC or other authorities responsible for fraud and financial crime prevention in your country. These institutions can offer further assistance and guidance through the process of disputing fraudulent charges and mitigating further damage. They may also provide resources for monitoring your accounts and offer advice on how to protect yourself from future identity theft.
• Change your passwords. Identity theft often occurs due to stolen online credentials (such as email addresses and passwords). Therefore, if you’ve experienced identity theft, consider reviewing and changing your passwords to remove any opening for identity thieves to access your data.
• Closely monitor your online accounts. Malicious actors often tend to try to extract the maximum from their victims. Therefore, even when you freeze your bank account, continue to monitor your other online accounts for suspicious activities. You might still have imposters lurking around.

How to protect yourself from identity theft

While you can’t fully protect yourself from identity theft, you can significantly reduce the chance of it happening if you maintain vigilance and a cool head. Here’s how to safeguard yourself from identity theft:

• Use strong passwords and two-factor authentication (2FA). Weak passwords and lack of 2FA increase the risk of identity theft. Implementing strong passwords reduces the likelihood of breaches by brute-force attacks, while 2FA allows you to spot and block unauthorized access attempts. While most banks use 2FA as a default security tool, enabling it on your online accounts (such as social media) can further strengthen your cybersecurity.
• Regularly check your credit reports. If you’re a US citizen, regular credit monitoring should be your habit. Getting an annual free credit report from one of the major credit bureaus can help you spot identity theft attempts before they occur, potentially saving you from financial loss. If you live somewhere where it’s impossible to get a credit report, regularly monitoring your bank account expenses and transactions can help you notice unusual activities quicker. 
• Beware of phishing scams. Phishing scams are one of the most common ways for cybercriminals to steal your sensitive data and then use it to commit identity theft. Therefore, you should carefully check emails with suspicious links and messages that create a sense of urgency. Scammers may try to bait you with limited offers that sound too good to be true or pretend to be legitimate entities (such as a bank or government agency) and send warnings about blocked accounts or stolen money. If you suspect an email you’ve received is a phishing email, avoid clicking on the link, use an online link checker to verify the URL, and report the email.
• Consider using identity theft protection service. Cybercriminals may have a lot of tools at their disposal, but you have options to protect yourself, too. One of the best ways to safeguard yourself from identity theft is by using an identity theft protection service such as NordProtect. With such a service, you’ll be able track your credit activity and score, safeguard your information with 24/7 dark web monitoring, and even receive up to $1M in identity theft recovery costs. 

How do identity thieves get your information?

Identity thieves can get your information by extracting it from you through social engineering attacks (such as phishing), data breaches, and malware. While the list of specific attacks is long, it’s most likely that users will surrender their sensitive data voluntarily by clicking on a suspicious phishing link or fraudulent attachment. 

That's why it is important to remain vigilant when browsing online. In addition, safeguarding yourself with identity theft protection services, such as NordProtect, may help you achieve peace of mind and soften the blow when facing the aftermath of identity theft.