Another Epidemic to Worry About: Identity Theft
Fraud losses grew in 2019 and are likely to increase in 2020.
Identity thieves are increasingly using stolen information to hijack their victims’ accounts, a costly type of fraud that’s expected to increase as the COVID-19 pandemic forces more Americans to work and shop online.
The number of victims of account takeovers, in which a criminal takes control of an existing online account, rose more than 20% last year, according to a report by Javelin Strategy & Research, a financial advisory firm. While the number of victims of ID theft declined in 2019, total losses rose because account-takeover fraud is more profitable for perpetrators. Javelin also predicts an increase in phishing attacks and “card not present” fraud, in which stolen credit card data is used to make purchases online, by phone or through the mail.
A target-rich environment. Fears of the pandemic and confusion about stimulus checks sent to millions of Americans have created new opportunities for scammers. Fraudsters are bombarding Americans with e-mails and phone calls that use the uncertainty surrounding COVID-19 to persuade them to divulge personal information and download malware. The Federal Trade Commission says it received four times as many complaints about identity fraud in the first few weeks of April than it had received in the previous three months combined.
There are steps you can take to protect yourself from account takeovers and other scams. Biometrics, which use fingerprints and facial recognition, are a more effective way to protect smartphones and other devices than passwords. Using digital wallets, such as Apple Pay or Google Pay, to make online purchases is also a good idea, because the merchant doesn’t get your credit card information, Javelin says. Even if the merchant is hit by a data breach, your credit card information should be secure.
You should periodically check your bank statements online to detect signs of fraud. The sooner you catch ID thieves, the less damage they can do. If you think you’ve been a victim of identity fraud, put a freeze on your credit reports with the three credit bureaus. That won’t prevent someone from taking over an existing account, but it will stop crooks from opening new accounts in your name.