Identity Theft – How to deal with them?

Identity Theft - How to deal with them?

Identity theft is the most growing concern these days. Every day we come across news of some online fraud that happened due to identity theft. The technology advancements have made fraudsters more sophisticated in committing identity frauds. We often relate identity theft with account takeover and credit card fraud, but this is not about it only. There are multiple other types of identity theft that are not related to financial industries only, in fact, every organization having an online presence can fall victim to this fraud; the reason being the lack of identity verification systems and advanced security protocols. To deal with such fraud, it is essential to understand them first.

Here are some types of identity theft:

  1. Financial Identity Theft

The first thing that comes to mind after hearing “identity theft” is credit card reports and bank accounts. Such type of theft that targets individuals’ financial statements and accounts are known as financial identity theft. With the increased data breaches in the industry, millions of customers’ accounts are compromised every year. That results in billions of loss not just for the organizations but for the individuals as well.

The data stolen from these breaches is sold in the black market, where cybercriminals are already set to impersonate an individual and carryout the illegal activities and fraud. The fraudsters can use credit card information to make unauthorized and fraudulent purchases. Sometimes, they can open new accounts using the stolen information of the individuals.

  1. Insurance Identity Theft

Insurance identity theft is somehow an extended form of financial identity theft. Where the fraudsters impersonate someone else to gain the insurance advantages. The problems related to insurance theft has always been there even before the digital transformation. But now the technology has provided identity thieve another opportunity to steal a person’s information and gain monetary advantage from the insurance companies. For instance, impersonating someone’s medical identity and showing the fake medical documents to get insurance money.

  1. Medical Identity Theft

Medical identity theft is one of the most critical forms of identity theft and also quite difficult to fix. The hospitals and pharmacists both can be fooled by the fraudsters and they aren’t able to differentiate between the fake and original patients. The perpetrators pretend to be someone else to get free medical services and get restricted drugs/ medicines from the pharmacy without getting suspicious. The world health organization finds medical identity theft to be the dangerous one claiming “the information crime that can kill you”.

  1. Child Identity Theft

With the explosion of technology and smart devices, every child is exposed to the use of the internet and mobiles. This makes them the perfect target for identity thieves. From a practical standpoint, no child pays attention to his/her credit card statement. Even most of the teenagers don’t do it unless they are up for getting a car or insurance. Fraudsters take advantage of this and use children’s identities to commit fraud and go on undetected for years. By the time parents and children are aware of identity theft, the criminals have already moved onto other prey leaving a burden of long credit reports. As per a study, more than 1 million children fall victim to identity theft every year.

  1. Social Security Identity Theft

The social security number of the person is the most sacred and critical information that one must not leak under any circumstances. There are multiple people who don’t want to pay taxes and find ways to manipulate tax regulators. Your social security number can be their escape from withholding taxes. The SSN of the person can be the most valuable information for identity thieves. Since they can register the company or work as independent contractors and can avoid paying taxes by using someone else’s SSN.

  1. Synthetic Identity Theft

Synthetic identity theft is the latest form of identity theft that combines a piece of a person’s original information and some fake information to build a synthetic identity. Due to its hybrid nature (i.e real information combined with fake information). These thieves can go undetected for a long period of time. Even if the synthetic identity fraud is detected, the thieves leave no trace behind to trace them.

Synthetic identity theft is sometimes also used by criminals to prove or convince someone that they are not the same person but someone else. This mostly happens in the case when the fraudsters try to enter the territory from where they have been blacklisted or restricted. Using the synthetic identities they show themselves as other citizens and easily gain access to the region or service. However, you can never know the intentions of the person using synthetic identity.

The Protection and Prevention from Identity theft

Identity theft is the ever-growing concern not just for individuals but for businesses and organizations as well. The intervention of government and regulatory agencies enforcing the businesses to meet the know your customer (KYC), Customer Due Diligence (CDD), Anti-money laundering (AML) compliance. Failure to do so can land them into some serious legal liabilities imposing a hefty fine and even imprisonment.

To deal with fraud and enhancing customer experience while meeting regulatory compliance. It is essential for businesses to adopt the latest identity verification solutions. The services based on hybrid technology (i.e. artificial intelligence and human intelligence) can verify. The identity of a person in real-time and detect the fake and synthetic identities hindering them from accessing the system. Multiple IT companies are providing such digital IDV services including KYC verification, face verification, AML screening, address verification, and document verification, etc. which make the whole verification process frictionless, saving time and cost.

Moreover, it isn’t just the businesses that are responsible for protecting their customers’ identity. The individuals are themselves equally in charge of protecting themselves from fraudsters. Always keep a tight eye on your financial statements and go through them every now and then. If you find anything suspicious don’t wait for the action first, report it immediately to the respective organizations responsible for it.