February 12th, 2020
Did you know that identity theft costs American consumers more than $16 billion each year? Even careful password protection and other security measures do not guarantee identity protection. Here are some common methods cyber criminals use to steal identities.
Tax identity/social security theft
Cyber criminals have sophisticated methods for accessing social security numbers. Once the cyber attacker gains access to a person’s social security number, there is nearly unlimited access to personal financial information. With a social security number, cyber criminals can file fraudulent income tax returns. Often, the taxpayer will be unaware of the theft until he files a tax return with the IRS only to be told someone has already filed a tax return with the same social security number. Additionally, a cyber criminal can use a stolen social security number to open fraudulent credit cards and wreak financial havoc.
Bank account theft
Clients should be advised of the dangers of storing credit/debit card information on online merchant sites. Once a criminal has banking information, all sorts of fraudulent purchases can happen before the theft is detected. Getting refunds from banks for fraudulent purchases can be a long and complex process.
Cyber insurance protection
Purchasing a cyber insurance policy will not stop identity theft from occurring. However, a cyber policy can help recover some of the financial losses. Depending on the policy, cyber insurance will pay for credit monitoring services, the cost of obtaining credit reports, legal costs, and even lost income in some cases.
Protecting personal identity
Personal information should be kept secure to mitigate identity theft risks. This personal information includes banking account information, social security numbers, passwords/user IDs, birth dates, and more. Credit reports should be monitored closely to look for suspicious changes to credit scores. If a breech is detected, clients should consider a credit freeze to prevent further fraudulent charges from occurring.
With so much at stake, insurance agents should advise their clients of the risk of identity theft along with the important protection cyber insurance can provide.