The 5 Biggest Identity Theft Scams You Need To Avoid

Identity theft has been a consistent problem in the United States in recent years, and the numbers don’t seem to be trending toward any significant improvement. According to a late 2015 analysis from the DOJ’s Bureau of Justice Statistics, roughly 17.6 million U.S. citizens fell victim to identity theft in 2014. This is roughly the same number of victims as there were in 2012, and 2015 figures are projected to be similar as well.

That’s why it’s so important for you to understand the specific ways that ID thieves might try to snag your personal information. Here are a few of the most popular scams and tactics out there today, as well as some tips on stopping them in their tracks.

The Nigerian Letter

Also known as “419” Fraud, this is the latest version of a fraudulent scheme that has been around since the 1920s. According to the FBI, victims receive a letter or email from a self-proclaimed government official in Nigeria who needs assistance transferring large sums of money out of the country. The correspondence promises a share of the money in return for this help, asking that the recipient either fax or reply with account information, blank letterhead, or other personal information. There are several variations on this, such as a member of a wealthy African family trying to make a generous overseas donation.

Those who respond are identified as likely to meet other demands and are targeted further by the perpetrators. A variety of reasons is presented for transferring varying sums of money to the sender until the recipient refuses to send any more, at which point the information obtained is often used by the perpetrator to drain the recipient’s bank account or commit some other type of fraudulent activity.

How to Beat It: 

If you receive any type of correspondence from Nigeria (or for that matter, from anywhere else in the world) that promises you any unexpected share in large sums of money, do not respond in any way. Instead, send this correspondence to your local FBI office, the Secret Service, or the United States Postal Inspection Service. Additionally, you may want to file a complaint with the FTC.

Always continue to guard your account information, SSN, and other personal info carefully. Be skeptical of anything that promises you money in exchange for transferring money to overseas accounts, and if you know someone who is corresponding with anyone who has sent them this type of request, encourage them to stop and to contact the FBI immediately.

Phishing Emails:

This clever tactic is designed to convince you to send your log-in credentials and other personal info straight into the hands of a criminal. Here’s how it works:

Victims receive an email that is designed to look like it’s from an authoritative source, such as PayPal, the victim’s bank or credit card company, eBay, etc. The success of this effort is dependent upon perceived credibility, so this email may contain the same graphics as other correspondence from these companies and mimic their structure.

These emails will often create urgency by alerting you to some dangerous situation, e.g. an attempt by a hacker to access your account. In order to protect your account, these emails say, you’ll have to verify your identity. You’ll be prompted to click on a link that will take you to a fake version of the company’s website and enter your username and password.

Once the thief has collected your log-in creds, the possibilities are endless.

How to Beat It:

A financial institution will almost never request your account information via unsolicited call or email. If you receive an email that requires “identity” or “account verification,” you’re likely being targeted by a phisher. Always be skeptical, and if you’re really concerned, call the company yourself to find out of the email was legitimate.

And here’s another quick tip: company websites that transfer sensitive information do so using encryption, which means that your bank’s true website will begin with “https://” – if the link begins with “http://” (without an “s”), this is further indication that the sender is phishing.

Financial Representative Employment Offer:

This scam involves a job offer from an official-sounding group (e.g. “GlobalFinances”) for someone who has posted a resume on a database such as Indeed or LinkedIn. The offer may sound very legitimate and articulate, seeking a person who will help the company execute “non-traditional” banking in a world of “increasing globalization,” etc. The position entails acting as a middle-man, receiving large payments and transferring them to the employer while keeping a commission on each transaction.

As a new Financial Representative, you’ll be asked for bank account information or other personal data, and you can probably guess what happens next…

How to Beat It: 

It would be hard to overstate it: Never provide your account information to an unknown individual or company. Contact the Better Business Bureau or research any such company fully to find out if you’re being contacted by a legitimate business.

Tax Identity Theft:

You may be surprised to find out that the IRS pays out billions of dollars in fraudulent tax refunds each year and has warned that 2016 brought a 400% increase in phishing and malware incidents during tax season. If a scammer can get ahold of your Social Security Number, filing a return in your name and collecting a fraudulent refund is rather simple.

You may be a victim of tax identity theft if your return is denied because another return has already been filed under your name. You should also look out for communication from the IRS that presents a discrepancy in the refund you’re due, the wages you earned, a balance you owe, etc.

How to Beat It: 

Of course, the most important thing that you can do to avoid tax ID theft is to guard your SSN. The less you give it out, the less opportunities scammers will have to gain access to it. When you’re asked for your SSN by any person or company, ask if it’s absolutely necessary and politely decline to provide it if it is not.

Furthermore, understand that the IRS will never request your SSN or log-in credentials via unsolicited email, text or phone call.

Finally, you can further reduce the risk of tax identity theft by filing as early as possible. Many of these scammers are hoping to beat you to filing a return under your name, so filing early could result in the denial of their attempt to collect your refund.

Your Computer Has Been Infected!

Victims of this type of scam are often redirected to a webpage (or receive a pop-up or phone call) informing them that their computer has been infected by some type of malware. To have it removed, victims are encouraged to follow a link or call a phone number, at which point they’ll be asked for credit card information to pay a small fee.

You guessed it…

These scammers will take your credit card number and dash off, making fraudulent use of it in the future.

How to Beat It:

Hopefully, you’re seeing a pattern at this point – never provide your credit card information in response to an unsolicited call or message from anyone claiming to be Microsoft or any other major software company. Microsoft will never call you to let you know that your computer has been affected, nor to ask for a fee to remove malware from your PC.

These are just a few of the most common ways that scammers are getting their hands on peoples’ private information to commit identity theft. In summary, always remain skeptical of unexpected offers, awards and alerts that require your personal information. And remember – if it sounds too good to be true, it probably is.

Moreover, the truth is that ID thieves are always coming up with new, creative ways to try to procure account numbers, SSNs, credit card information, birthdays, and other data that could make you a victim. And while it’s difficult to fully prevent identity theft, there are some basic steps you can take to avoid being among the 7% of Americans who will be targeted this year:

  • Be consistent about protecting your financial information. If you aren’t planning on keeping your documents on file in a secure location, shred anything that contains sensitive data such before discarding it.
  • Unless you need your Social Security card for a specific reason on the same day, never carry it in your wallet or on your person.
  • Keep your firewalls and anti-spam/-malware software up to date at all times, and be sure to regularly change your account passwords online.
  • Take advantage of your free annual credit reports at least once annually, but preferably every 4 months. Immediately look into any account or line of credit that you don’t recognize on these reports.
  • Don’t assume that your SSN or ITIN is needed every time it is requested. Always ask if it’s absolutely necessary.

If you follow these basic steps and stay aware of trending schemes such as the ones detailed here, you’ll make huge strides in protecting your personal information and minimizing your risk of identity theft.