Is identity fraud on your radar? If not, it should be. Once you’ve been victimized by identity fraud it can be expensive and time consuming to resolve. But the good news is that a little knowledge can help protect you from identity fraudsters
The first step towards protecting yourself from identity fraud is to know what you are up against. The next step is to take precautions and practice good online habits. Two of the most reported types of fraud are new account fraud and account takeover fraud. Traditionally new account fraud and account takeover fraud have hit a lower proportion of fraud victims, but these two types of fraud consistently produce the highest average fraud amounts and cost the consumers more. So while there are fewer victims of this type of fraud, they typically feel the most pain.
New account fraud is the use of a victim’s personal information to open fraudulent new accounts in the victim’s name. Stolen Social Security numbers are often used to commit new account fraud. The thief typically submits a different mailing address when applying for new accounts, so the victim may not be aware of their existence. Bills and statements are sent to the fraudulent mailing address, debt accumulates in the victim’s name, and eventually creditors come seeking payment when bills remain unpaid.
Variations on new account fraud include:
Account takeover fraud can happen when a fraudster poses as a genuine customer, gains control of an account, and then makes unauthorized transactions. The fraudster steals a victim’s personal information to take control of existing bank accounts or credit card accounts. Fraudsters use a variety of techniques to obtain personal and financial information needed to take control of existing accounts, including:
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