What is an example of identity theft? from Emamhossai's blog

Many consumers are desperately looking to avoid identity theft, but it’s isn’t easy to know how to do so. We’ve compiled a list of the most common examples of identity theft to help you know what they look like, and how to avoid them.

Examples of Synthetic Identity Theft

Synthetic identity theft occurs when a thief pairs a legitimate Social Security number with fake personal information, such as a name, birth date, and address. The thief will then use this synthetic identity to apply for a credit card.

Because this synthetic identity doesn't have a credit file, the credit card application will be denied. However, the record of this application denial will create an imprint of this synthetic identity, beginning to give it new life and feasibility.

From there, thieves will add the synthetic identity as an authorized user on other credit cards and begin to build their credit file that way. Once the synthetic identity has a reputable credit file and a good enough credit score, the thief will apply for several credit cards, be approved, and run up a bill. 

That bill won't get paid. Then, it's on to the next synthetic identity.

When you see identity theft being portrayed in movies and television, a character might be jetting off on international travel using a fake name or financing their lavish lifestyle with credit cards that were opened using stolen information – that’s an example of synthetic identity theft.

This type of identity theft is certainly a long con that takes some coordination and effort, but successful synthetic identity theft can be extremely lucrative for a criminal.

Examples of Medical Identity Theft

When you think of "sensitive" information that a thief might want to get their hands on, your healthcare information doesn't usually make the list. However, medical identity theft is a prevalent (and quickly growing) crime.

Medical identity theft occurs when someone steals your personal information, such as your name, Social Security number, Medicare number, or health insurance information, and uses it to procure medical services or file fraudulent claims with your insurer. Fraudsters can use your health insurance information to see a doctor and obtain prescriptions. 

Medical information can be stolen by a stranger, but it can also be stolen by a doctor. Unfortunately, there are several examples of medical identity theft that involve doctors or doctor’s office employees stealing healthcare information and committing fraud.

Medical identity theft can disrupt your health care coverage and is often difficult to detect. Pay close attention to the mail you receive, and don't disregard medical and insurance statements. Try to give them a cursory glance before throwing them away, just to make sure that you recognize the care that you're being billed for.

Examples of Child Identity Theft

Children, specifically minors, typically have no credit history. Identity thieves see this "blank slate" as an opportunity, making children a prime target to become victims of identity theft.

A subset of synthetic identity theft, child identity theft occurs when a criminal uses a minor's Social Security number to open lines of credit, apply for government benefits, apply for loans or utility services, or rent a place to live. Unfortunately, no child is too young to be excluded from the victim pool, and the consequences of this type of identity theft can stay with them for their entire lives.

And people stealing children’s identities stand to make a lot of money off of them. In 2019, an identity fraud ring of 8 people was exposed – together, they had made up to $420,000 worth of fraudulent purchases using children’s Social Security numbers that they had stolen.

More often than not, the perpetrator of child identity theft is familiar with the victim and had the opportunity to gain access to their personal information.

Identity theft is a crime that is depicted as primarily affecting adults. Because of this, we're not always proactive in protecting our children from it. Before giving out a child's sensitive information, be sure to ask what the information is being used for, how it will be handled, and how it will be disposed of or stored. Additionally, be sure to take steps to secure the sensitive documents in your home.

Examples of Tax Identity Theft

Your Social Security number is the key to many things, including your tax return. When someone uses your Social Security number to file your tax refund or apply for a job, it's tax identity theft. 

This can lead to trouble with the IRS, with repercussions including being denied your tax refund or being flagged for not reporting all earned wages.

If an identity thief uses your Social Security number to file a tax return before you do, they can claim a refund. Then when you go to file your legitimate tax return, the refund that's rightfully yours will be denied.

In one example of tax identity theft, an identity thief was found to have used over 200 different stolen identities to file tax refunds, resulting in over $200,000 in tax returns.

Alternatively, if someone uses your stolen Social Security number to apply for and work a job, you may file your taxes normally and the IRS, seeing that there is more income under your Social Security number than what has been reported, will flag you for not reporting all earned wages and tax fraud.

This one is a double whammy: you become a victim of tax fraud and may be accused of tax fraud all at the same time. 

Tax identity theft can be hard to detect. When you can, file your taxes early and regularly review your credit reports.