More than 134 million Americans have faced some form of identity (ID) theft. ID theft is the illegal use of an individual’s personal data, such as Social Security Number, banking and other financial information, and medical and employment identification. This use is typically for fraudulent purposes, resulting in the compromise of a person’s identity and certain financial loss.
Financial network CNBC reported that 15.4 million American consumers in 2016 fell victim to identity theft and fraud. The number, tracked since 2004, was up 16% from 2015 and represented the highest total since the research firm Javelin Strategy & Research started keeping these numbers. The cost of this illegal activity to consumers and the economy rose $1 billion to nearly $16 billion in total. Such activity shakes consumer’s confidence in electronic and financial systems, which has a ripple effect throughout the economy.
Combating ID Theft and Fraud
There are many reasons individuals fall prey to cyber-criminals, and others intent on stealing personal and sensitive information. Some of those reasons include:
- Poor password protection
- The rise in no-card transactions online
- Phishing and other email scams
An increasing reliance on technology to process large financial transactions as well as conduct retail purchases places a lot of data within the reach of those individuals who possess the ability to gain access. The complexity of computer systems maintained by governments and large corporations to store and warehouse terabytes of sensitive consumer data have found to be no match to some of the simple, yet effective methods used by criminal enterprises and other individuals to obtain this information for their own use, much to the detriment of the compromised individual.
Passwords
Criminals know that the security most computer users employ for creating a password is, at best weak. This is what makes theft of personal information online so easy. Esquire.com printed a list of passwords commonly used, which provide no protection from hackers. As silly as some may sound, these are passwords that online users have employed to protect thieves from stealing their banking, employment, and medical identification. This list includes:
- 123456
- password
- 111111
- Admin
- 123123
Individuals should take steps to secure their passwords. Putting thought in the numbers and letters that make up a password with a focus on places, things, and names that are only familiar to the person helps strengthen passwords. Adding a special character (i.e. @, #, %, etc.) helps further secure accounts. Finally, enabling 2-step authentication, which is a second way to access an account or verify
No Card Transactions
No card transactions are those where a card is not presented at the time of the transaction. These transactions, performed over the phone or online, have seen a rise in recent years. The frequency with which a person performs an online or over-the-phone gives thieves more opportunity to take over information and use it illegally. Spotting fraud and reporting it immediately alerts companies about the need to shore up their cybersecurity.
Email Scams
Email scams are as old as the internet itself. Hackers and cyber-thieves use different techniques designed to induce individuals to provide checking account information and access, Social Security Numbers, and other information that results in ID theft and fraud. Many email scams can be defeated by simply refusing to click on an email from unknown users.
Protection from ID Theft and Fraud
Consumers protect themselves from ID theft and fraud by observing a few tips: create better passwords and enable 2-step verification protocols. The use of Google Wallet, Apple Pay, and other online payment sources provides a way to protect against fraudulent transactions and attempts to compromise personal information. Monitor spending frequently and dispute unusual transactions when they occur to lower instances of theft and fraud. Finally, the purchase of ID theft and fraud insurance provides protection from loss that occurs when information is stolen and used illegally.
G&L Insurance provides coverage that helps insureds protect their property and other assets subject to the risk of financial loss. Contact G&L Insurance to discuss coverages available to protect against the risk of financial loss due to ID theft and fraud.
