Identity fraud is a scary financial nightmare where the effects can ripple out to large areas of your life and can be felt for years after the fact. According to BJS.gov, about 7% of persons aged 16 and above fell victim to this scheme in 2012. This shows how young the victims are and how early it can start in a consumer’s life.
There are plenty of ways to protect yourself from identity theft which you need to carefully look into. But it is also good idea to consider what these scrupulous individuals target the most to make sure that you are aware of your vulnerability. It is hard to be a passive consumer and not read the signs along the way.
To better understand identity fraud, it is simply being robbed of your financial credentials where the robbers perform various financial transactions under your name. It can be as simple as charging an expense on your credit card or they can even open a new line of credit under your name and max that out and leave.
Other serious cases may include victims being robbed of their hard earned money because the thieves gained access on their savings and checking account. Some serious offenses might even see some investments of consumers being diverted to or even sold for the thieves to profit on. These can happen very quickly with the legitimate consumer left high and dry.
Identity fraud has a lot of shapes and forms and the extent depends on how much your financial details were compromised because this can dictate the access the thieves have. There have also been cases of high profile security breaches ranging from popular consumer business to financial institutions where the data of their clients have been exposed.
Most popular target for identity theft
These scrupulous criminals has a pattern and it might be a good idea to read through them. It can help you assess your vulnerability and can help guide how you put in a protection plan against theses thieves. Here are some of them worth knowing.
- Young inexperienced consumers. These are primary targets for identity fraud simply because these group of consumers are quite unaware and not too conscious of their purchasing habits. It is also in this group that the highest credit card use is recorder. As Creditcards.com shares that the average credit card debt of an adult is at $5,596, it is easy to assume that the younger consumers has more than that charged on their card. This groups tends to be careless as well and depend too much on technology that they open themselves to digital thieves like using a public connection to log in to their banking applications or even their social networking accounts.
- Predictable passwords. This is one of the most common causes of identity fraud because thieves can easily crack your password and gain access onto your email account, banking account and all other sensitive sources of personal information. This can lead to an array of problems like your bank account being accessed and the funds in it transferred to an offshore account. You need to make sure that you have strong passwords to keep predators at bay and protect your digital information. Refrain from using common patterns like a family member’s name or a pet’s name and breed. Mix lower and upper case as well as letter and numbers and even put in a few characters to help make it more complicated.
- Consumers who are earning a lot. Identity fraud is also present and prevalent within the range of people who are earning a lot about north of $75,000. The reason for this is that scammers would like to target a big account where they can get the most with a few transactions. There is also a big chance that consumers who earns a lot has multiple accounts and might not be able to monitor all of them. This opens a lot of doors for the thieves to come in and wreck havoc on their financial life.
- Children. Yes, they also have a bulls eye on them when it comes to being possible targets for identity fraud because they already have social security numbers. These are primarily used by their parents for tax purposes and once thieves gets a hold of these, they can use this data to open lines of credit or even take out a loan under the child’s name. One of the more challenging part of this ordeal is that the parents themselves rarely check the credit report of their children so this can go unnoticed for years.
Improving your capability to address financial emergencies
Financial troubles can come in a lot of forms and those unexpected emergencies are one of them. Here are some ways to help beef up your financial life and make sure that you are still able to stay away from identity fraud.
- Build up your reserve funds. This can both refer to your emergency fund and your rainy day fund which you can use to address unexpected financial expenses. Your rainy day fund is the smaller of the two and is meant to be used to small unbudgeted expenses. It can be a tire blowing up or it can be one of your small home appliances that is need of repairs. It can also be a plane ticket to see and visit a sick relative. The emergency fund is meant to cover the bigger expenses such as when you lose a job or when you get hospitalized and in need of a big amount. The emergency fund is usually measured by multiplying your monthly expenses.This can be anywhere from six months to twelve months worth of expenses so you can cover them when your source of income is affected.
- Increase your income. This is easier said than done but you can reap great financial rewards when achieved because you have a bigger fund to cover your expenses. But as you earn more, you are more prone to identity fraud so be vigilant in monitoring your credit report and even monthly statements. To do this, you can first look at your primary source of income and see how you can increase your pay. It can be a promotion or a performance bonus or simply walking up to your boss and making a case for your salary increase. If that doesn’t work, you can look into your hobbies and interest and see how you can make extra money off of them. If you love baking and seem to have a lot of friends asking for your cupcakes and cookies, them try selling them during weekends and see how it picks up. If people love them, start delivering and put up an online store. You can choose to have a physical store down the road when you already have a big base of customers. And that all started from your love of baking.
- Clear up your debts. To be able to get a lot of wiggle room in your budget, you might want to prioritize clearing up and paying off your debts and loans to shift your focus to investments and your retirement fund. You can look at consolidating your debts because this program can offer your a clear path to financial freedom because you are able to pay your loans and monitor the progress on all of them because they now all under one payment account.
- Live below your means. Frugal living has been a life saver for a lot of consumers primarily because it helped them free up some funds in their budget to make aggressive payments on their loans. But more than that, they were able to reconnect with themselves and their family see that money is just a tool that they can use to make lasting memories with each other.
Identity fraud is prevalent in society with security breaches happening all over. But as these are more from the lack of security measures from various institutions, you need to make sure that you yourself are protected. You need to look at how these thieves are targeting consumers and be aware of the steps that you can take to protect yourself and your financial identity.