Beyond Financial Identity Theft: Learn About 6 Different Types

When people hear the words “identity theft,” what typically comes to mind are fraudulent credit card charges or illicit bank withdrawals. But the reality of identity theft is more complex. In fact, financial identity theft is only one type of identity crime, and others can be more difficult to detect. Learn about six different types of identity theft in order to better protect yourself and your loved ones.

Financial Identity Theft: New account fraud jumped by 88% in 2019

Credit card fraud tops the list of identity theft crimes, and some experts estimate that over 80 percent of credit cards currently in people’s wallets have already been compromised.

While microchips in credit cards have reportedly helped curb in-store fraud, experts say that mobile and online transactions are now the low-hanging fruit. As a result, card-not-present fraud, a scam in which the credit card is not physically used such as for online or phone transactions, has ballooned in recent years.  

New account fraud, in which a thief opens a brand-new account in the victim’s name, jumped by 88 percent in 2019. The most common types of new accounts that scammers open are online accounts such as eBay or Amazon, checking or savings accounts, and credit card accounts.

Tax Identity Theft: Thieves Aim to File a Fake Tax Return Before the Victim Does

According to the IRS, tax-related identity theft is one of the most common tax scams. Tax identity theft occurs when a criminal uses the victim’s Social Security number to file a fraudulent tax return. Victims may not know the crime has happened until the IRS rejects their tax return as a duplicate filing.

In recent years, the IRS has advised taxpayers to file as early as possible—and with good reason. The IRS accepts only one tax return per Social Security number, so if a taxpayer can file their authentic tax return before a potential criminal can file their fraudulent one, they may be able to beat an identity thief to the punch. On the other hand, if a criminal succeeds in filing their fraudulent return first, it could take months for the victim to resolve the issues.

Medical Identity Theft: Fictitious Medical Information Could Plague the Victim for Years

According to the World Privacy Forum, medical identity theft can cause great harm to its victims, as it often results in falsified information being entered in the victim’s medical records that can plague their medical and financial lives for years.  

Medical identity theft is when a criminal submits fraudulent claims to the victim’s health insurance or Medicare or uses the victim’s information to get treatment, prescription drugs, medical devices, or other benefits. It can lead to tens of thousands of dollars in damages.  

If a criminal gets treatment in the victim’s name, erroneous medical records could cause treatment delays, incorrect prescriptions, or misdiagnoses. It could even affect the victim’s ability to get medical care and insurance benefits in the future. Despite this risk, experts say that medical identity theft is the least studied and most poorly documented of identity theft crimes.

Employment Identity Theft: Thieves Seeking Employment—Or Unemployment Benefits

In employment identity theft cases, scammers may file fraudulent unemployment claims, or alternatively, they may use a falsified or stolen ID to get a job using the victim’s identity. Victims may learn of employment fraud when their employer asks why they have applied for jobless benefits or receive a W-2 or 1099 from an unfamiliar employer.  

In many cases, fraudulent unemployment payments are deposited into bank accounts controlled by the scammers. However, payments are sent to the victim's legitimate bank account instead. In that case, the criminals may contact the victim by phone, email, or text message and impersonate an unemployment official in an attempt to get them to transfer the funds.

According to the Internet Theft Resource Center (ITRC), anyone can be a victim of unemployment benefits fraud, and individuals both with and without a current position have been impacted.

Child Identity Theft: Children Can Be the Perfect Mark for Identity Thieves

Many parents assume that their children are safe from identity theft because of their young age and lack of credit history. However, for identity thieves, children can be the perfect mark. While thieves may target adults for the money in their accounts, a child represents a clean slate for opening new lines of credit.

The identity theft of a child can go undetected for years—or even decades. And the consequences can be devastating. When the child becomes a young adult and seeks independence, they may have problems with banks, landlords, utility companies, and potential employers due to their negative credit history. 

In many cases, identity theft of a child takes place in the child’s own home—or close to it. It’s estimated that 60 percent of child identity fraud victims personally know the perpetrator.

Criminal Identity Theft: An Identity Thief’s Crimes Can Become the Victim’s

Though rare, criminal identity theft can occur when someone cited or arrested for a crime uses the victim’s name and identifying information, resulting in a criminal record in the victim’s name. Criminals may steal a victim’s identity to commit a crime, enter a country, get special permits, hide their own identity, or commit acts of terrorism.

An identity thief, using the victim’s name or personal information, may sign a citation or be required to appear in court. When neither thief nor victim appear in court, the judge may issue an arrest warrant, or a criminal record may be created in the victim’s name.

The victim is often unaware that they have a criminal record until they are arrested because of an outstanding warrant, are denied employment, or fired from their current job after a criminal background check. It can be difficult to resolve criminal identity theft because the victim often appears to be the criminal.

Better Protect Yourself and Your Loved Ones from Identity Theft

Fortunately, there are steps you can take to better protect yourself and your family from identity theft. Download the white paper Your Guide to Identity Theft to learn more about the various types of identity theft, common warning signs, how identity theft typically happens, and steps people can take to better protect themselves.

How to Report an Incident

According to the FTC, if you or a loved one believe you have been the victim of identity theft, report it immediately at IdentityTheft.gov, the federal government’s resource for identity theft victims. Below are additional steps to report other specific types of identity theft.