Fraud & Identity Theft » Prevention » 20 Types of Identity Theft and Fraud

20 Types of Identity Theft and Fraud

Identity theft has become big business for criminals: 15.4 million Americans were victims of identity theft in 2016, according to Javelin Research. ID theft has been among the top consumer complaints with the Federal Trade Commission (FTC) for the last 17 years, and ranked as the #1 consumer complaint from 2000 to 2015.

Knowing where identity thieves are looking for your personal data can help you protect yourself from becoming a victim of ID theft. Make sure you understand how to check your credit report for ID theft and be on guard against the “classic” forms of ID theft, as well as new and different types of fraud that can occur:

1. Driver’s License Identity Theft

Driver’s license theft is the most common form of ID theft. The person who stole your ID may try to buy items under your name and get other forms of identification with their picture which can lead to criminal identity theft. You may want to consider adding an initial security alert to your credit file if your driver’s license is stolen.

2. Mail Identity Theft

Mail identity theft is one of the oldest ways for a criminal to steal your personal information. If your mail has been stolen a thief may be able to retrieve your financial account information to make purchases or open up new credit cards. They could also change your address on your statements or bills.

According to the US Postal Service’s Annual Report, it received over 60,000 complaints of mail theft in 2016, which resulted in over 2,000 convictions. If you think your mail has been stolen you can file a mail theft complaint with the U.S. Postal Inspection Service.

3. Debit Card Fraud or Credit Card Fraud

Credit card fraud or debit card fraud is when someone uses your credit card or credit account to make a purchase you didn’t authorize. Fraudsters can also steal your credit card account number, PIN and security code to make unauthorized transactions, without needing your physical credit card.

Unlawful transactions like these are known as card-not-present fraud. You can visit our fraud center if you think fraud has occurred and dispute any unauthorized or suspicious information that appears on your credit report.

4. Online Shopping Fraud

Online shopping fraud or ecommerce fraud occurs when a criminal leverages stolen payment information or fraudulently acquired bank or credit card accounts to attempt retail transactions without the account owner’s knowledge. The items purchased are then shipped to an address other than victim’s where the stolen items are sold or shipped overseas.

Online shopping fraud increased after the new chip credit cards were implemented in the U.S., causing fraudsters to shift their attention online. Ecommerce fraud increased more than 30% in the first six-months of 2017, according to Experian.

5. Social Security Number Identity Theft

Social security number (SSN) identity theft can usually happen from data breaches or Tax ID theft. If you start to notice mail that lists the wrong last four digits of your SSN or the wrong name or address this may be a sign of fraud or ID theft. Make sure to check your credit report, Experian does list all other Social Security numbers reported as belonging to you because they may be a sign of fraud, or hopefully just the result of a typo from someone wrongly entering information on a loan or credit application.

6. Account Takeover Identity Theft

Account takeover fraud occurs when criminals gain or have access to your bank or credit card accounts—usually because of a data breach, phishing scam, or malware attack—and start making charges to those accounts.

Account takeover identity theft can happen with small businesses, commercial businesses, or even corporate account takeovers. This form of identity theft has been around for years. Watch out for unknown charges or decide if you want a credit lock as a preventative measure.

7. Senior Identity Theft/Senior Scams

Senior identity theft or senior scams are very common as older Americans may not be checking their accounts or financial reports often since they’re typically not opening as many new accounts or seeking new credit. The FTC reported that 37% of Americans who are 60 years or older made fraud complaints in 2016;  20% of those complaints were for ID theft. Seniors can fall victim to scammers if they trust the wrong person, who may develop a relationship over time by preying on them over the phone or via email.

8. Child Identity Theft

Child identity theft may not be as common as other types of ID theft but it is very attractive to thieves. That is because there is usually no credit history established for the children who become victims. Scammers sometimes use children’s Social Security numbers and other information to open new accounts, apply for government benefits, take out loans, and more. The child may not know their credit has been used to run up debt in their name until it’s time to apply for school or car loans.

While child identity theft accounts for a small portion of identity theft, child identity fraud or theft will affect 25% of kids before turning 18, according to Experian data. You can add a fraud alert for your child or consider getting a family identity protection plan.

9. Tax Identity Theft

Tax identity theft happens when fraudsters have your name and Social Security number and file a tax return in your name before you file yours. In some cases, the fraudsters use fake income and withholding numbers so they can get a bigger refund check sent to their address.

Tax ID theft has grown in recent years because the crime has been rather easy to commit. Make sure you know how to report tax return ID theft, file your tax returns as soon as you can or request a Tax ID pin number.

10. Biometric ID Theft

Biometric ID theft is when the physical or behavioral characteristics used to verify a person’s identity through a device are stolen. These characteristics are measurable, such as a fingerprint or voice recognition “Hey, Alexa”, that can be copied and recorded. These attributes are unique to individuals but in the wrong hands can be used to manipulate devices or people.

11. Criminal Identity Theft

Criminal identity theft is when a criminal gives your information to a police officer or law enforcement. This can happen when your ID is lost or stolen and in the possession of a criminal. They provide your name and information if arrested, which could show up on a background check for you or result in a warrant issued under your name. If you believe you are a victim of criminal identity theft you may consider signing up for an identity theft protection product.

12. Synthetic Identity Theft

Synthetic identity theft is the fastest-growing type of ID fraud, representing 80-to-85% of all current identity fraud, according to the FTC. Synthetic ID theft merges real and fake personal consumer data to create a new identity using information such as Social Security numbers, names, addresses, and birthdays that can be bought on the dark web.

If you start to receive mail or phone calls asking about new credit accounts or get mail addressed to a different name this could be a sign of synthetic ID theft. You can scan your email with a free Dark Web Email Scan.

13. New Account Takeover

New account takeover or new account identity theft is when a criminal creates a new account under your name using personal information they received from stealing your data, either directly or via a data breach. It is a combination of both synthetic identity theft and account takeover theft.

New account identity theft often has higher rewards for fraudsters, because in many cases the victim being impersonated will have an established relationship with the credit card lender and that may mean access to higher credit limits. Pay attention to messages that lenders send you to confirm activity on new and existing accounts.

14. Medical Identity Theft

Medical identity theft can be harder to discover than other types of ID theft because it happens when someone steals another person’s identity to obtain medical services. As a result, no one may notice for awhile or until the victim receives a statement for care that they never received. More than 27% of data breaches in 2017 were medical or healthcare related. By reading your claims received in the mail, reviewing in detail any statement of benefits,  or going online to check existing claims you can monitor all medical activity done in your name.

15. Loan Stacking Fraud

Loan stacking fraud occurs when multiple loans are taken out by borrowers who slide through today’s automated approval process. Consumers love the ease of access to these online loans and so do fraudsters. Loopholes in online lending marketplaces can result in multiple lenders making loans to the same (fake) borrowers, often within a short period, without the full picture of their rising obligations and declining ability to pay. Loan stacking can affect consumers if these loans are taken out in their name.

16. Mortgage Fraud

Mortgage fraud occurs when a borrower, broker or an appraiser lies about information on the application for a mortgage loan. They may do this in order to get approved for a bigger loan or just to get the loan approved. During the mortgage crisis, Experian estimated that first-party fraud—like loan stacking—may have accounted for more than 25% of all consumer credit charge-offs in 2009. After the housing crisis, more stringent approvals were put in place.

17. Auto Lending Fraud

Auto lending fraud can be the same as mortgage fraud or loan stacking fraud and occurs when a consumer, a dealer or auto lender submits or accepts a fraudulent consumer application for credit. Auto dealers can be more concerned about getting customers into a vehicle versus doing a thorough identity verification process. Those identity verifications are likely not cross-checked to prevent synthetic ID fraud that can result in loan application losses. At the same time, the borrower may be falsifying information on the loan application in order to get approved for the car. If approved and the loan goes unpaid, the lender takes a loss.

18. Employment Identity Theft

Employment identity theft is when a criminal applies for a job using your Social Security number or ID. Employers report income to the IRS under your name, and the government expects you to pay taxes on all income earned in your name. The best way to spot this is to review your credit report to find anything that you don’t recognize.

19. Bust-Out Fraud

Bust-out fraud is first-party fraud scheme and a deliberate form of fraud or ID theft that is also known as sleeper fraud. It occurs when a consumer applies for credit and uses their own name or a synthetic identity with the intent of maxing out all available credit and eventually disappearing. Lenders are left assuming all the risk as a result and bust-out fraud can happen from people using synthetic IDs or loan stacking methods.

20. Internet of Things Identity Theft

Internet of Things (IoT) identity theft is when your smartphones or tablets are paired with consumer products such as cars, heart monitors and household appliances that are connected to the Internet, creating an opportunity for hackers to steal your data. Sometimes these connected products can have security flaws, creating a point of weakness around the victim’s personal data that leads to the IoT fraud.

What Should You Do If You’re an Identity Theft Victim?

If you are a victim of identity theft, you should report it immediately. Here is what you can do if you feel you are a victim of identity theft:

  • File a police report, which is important to protect yourself if an ID thief starts using your information to commit crimes. Get copies of the police report. You may be asked for them when notifying your insurer, medical providers, the credit bureaus and others that you have been victimized.
  • File an identity theft complaint with the Federal Trade Commission online or call the FTC’s toll-free hotline at 1-877-IDTHEFT (438-4338).
  • Consider placing a freeze or fraud alert on your credit reports.
  • If you are the victim of medical ID theft, notify your insurer and medical providers, get copies of your medical files and ask to have them corrected. You can also consider filing a health-privacy complaint with the U.S. Department of Health & Human Services online or call 1-800-368-1019.
  • If you are the victim of Tax ID theft you can contact the IRS.

Being persistent by monitoring your accounts and reviewing your personal information is the best way to stay on top of potential threats.


Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.