Top 5 Identity Theft Scams and How to Avoid Them

June 11, 2019

According to Equifax, identity theft occurs when someone steals your personal information (i.e., your name, Social Security number, date of birth). The perpetrator then uses your identity to take out loans, open new credit accounts, get medical treatment or even commit other crimes. Of course, the thief also has access to your bank accounts, so your retirement funds or even your tax returns aren’t safe.

Research reported by the Insurance Information Institute tells us that in 2017, 16.7 million Americans were victims of identity theft and the losses totaled $16.8 billion. While identity theft protection plans offered by various companies can help, being able to recognize the most common identity theft scams and knowing how to avoid them can save you both time and money.

identity scams

Source: Getty
  1. Phishing Scams

    Phishing scams are by far the most common identity theft scams today. They have been around in various forms for years and as they are quite lucrative, they don’t appear to be waning at all. The most recognizable is the email that looks like it comes from a company you’ve done business with like Amazon or Walmart. The email thanks you for your recent order and advises that there is a problem with it. It gives you a handy and convenient link to click to correct the issue.

    That link takes you to a website that looks like the company’s site but it’s actually a fraudulent copy. When you enter your email and password to log in, you give it to the scammers and they take it to log into your actual account to get as much of your personal information as they can. Some will even go so far as to require that you re-enter your full payment information.

    A twist on the retail identity theft scam is an email sent by a delivery service that notifies you there is a problem with your delivery. A link is included you can click on to verify your address on what looks like a legitimate UPS or FedEx site. While you are busy looking at the page trying to figure out what delivery the email is talking about, a virus is being downloaded to your computer. Suddenly your personal information, banking information, insurance information and passwords are all compromised.

    How to Avoid Phishing Scams: Be leery of any communication with urgent requests for personal financial information. Don’t click the links or respond to the email. When in doubt, call the company the email is from directly and ask if they sent you anything or if there is, in fact, a problem.

  2. IRS Scams
    ID scams

    Source: Getty

    IRS Scams are another form of common identity theft scams, garnering scammers both your personal information and cash. Millions of dollars have been lost by thousands of people in tax scams. Scammers use email, regular mail and phone calls to set up everyone from individuals and businesses to payroll and tax professionals.

    • IRS-Impersonation Telephone Scams – Victims are told they have a refund coming but they must verify personal information to get it. The fake IRS employee may give you a bogus IRS identification badge number and they usually change or alter the caller ID to make it look like the IRS is the entity calling. Another twist is when the “IRS” calls about taxes that you “owe.” The caller offers to take payment over the phone falsely saying you’re required to verify your name, address, date of birth and social security number.

    • IRS Natural Disaster Scams – The IRS warns that scammers frequently try to take advantage of victims of major disasters like hurricanes, tornadoes or floods. Fake “agents” call to help victims file casualty loss claims and get tax refunds.

    • IRS Deadline Scams – Every year, shortly before the October 15 tax-filing extension deadline, the deadline scams pick up steam. Scammers posing as IRS agents contact taxpayers by phone or email to steal money and personal information.

    How to Avoid IRS Scams: Remember, the IRS never initiates contact with any taxpayer by text messages, email, or social media channels to request personal or financial information. Don’t fall for the hoax.

  3. Medicare Card Scams

    When Medicare announced that members would be receiving new cards last month, a new identity theft scam kicked into high gear. Scammers started calling seniors purporting to be with Medicare and demanding personal information to send your new card. Some scam artists have been reported as demanding payment for the new card while others ask for your bank account information to direct deposit a “bonus” for Medicare recipients. According to medicare.gov, none of this is true.

    How to Avoid Medicare Card Scams: Call Medicare at 1-800-MEDICARE (1-800-633-4227) if anyone contacts you and asks for your personal information or money, or threatens to cancel your health benefits if you don’t comply.

  4. Prize Scams

    Congratulations! You just won a luxury cruise, a big jackpot or even a foreign lottery and all you have to do to collect your prize is “verify” your personal information and pay a small fee for delivery, processing, shipping, and taxes on your win.

    ID scams

    Source: Getty

    Legitimate contests and sweepstakes that you entered will never call you to ask for a credit card or bank account number over the phone and real contests never require that you pay a fee or buy anything to enter or improve your odds of winning.

    How to Avoid Prize Scams: If it sounds too good to be true, it usually is. Keep your money and your personal information to yourself and if you spot a scam, report it to the FTC. By filing a report, you can help FTC investigators identify the scammers and stop them.

  5. Medical Identity Theft

    Last year, over 27 percent of data breaches were medical or healthcare related and nearly 5 million medical records were stolen. Victims paid nearly $13,500 each to clear fraudulent medical bills. Medical identity thieves frequently pretend to work for an insurance company, doctor’s office, hospital or clinic, or pharmacy to try to trick you into revealing personal information.

    How to Avoid Medical Identity Theft: Protect yourself by never giving out your Social Security, Medicare or health insurance identification numbers to anyone other than your physician or other approved healthcare provider. Regularly review your explanation of benefits or Medicare Summary Notices to make sure that the filed claims match the services you received.

    If you find any questionable charges, report them to your health insurance provider or Medicare immediately. Request a copy of your medical records annually and carefully review them for inaccuracies and conditions that you don’t have.