The rise of identity theft is among our nation’s most worrisome trends, which doesn’t seem to be dying down. To keep your identity safe, you need to familiarize yourself with the ever-evolving tactics identity criminals use.
This article sheds light on new identity theft types and ways they occur to help you take the necessary precautions. You’ll learn how your private information can be obtained and used for various malicious purposes and what you can do to prevent this.
We’ll also pay special attention to child identity theft as one of the most dangerous forms of this crime. You’ll discover the main reasons children are particularly vulnerable and how to safeguard your young one’s information.
The Many Faces of Identity Theft
Broadly speaking, identity theft is any misuse of someone’s personally identifiable information (PII) for impersonation and personal gain. In 2022, over 40 million American adults were affected by this crime, with an estimated loss of around $43 billion.
Children aren’t safe from this crime either—one in 50 U.S. children falls victim to ID theft annually, which adds another $1 billion to the total losses.
The reason identity fraud is so widespread is the lack of proper PII protection paired with the fact that fraudsters keep finding new ways to steal victims’ information. With this in mind, we can differentiate between seven particularly concerning forms of ID fraud:
- Medical identity theft
- Account takeover
- Social Security number (SSN) identity theft
- Identity cloning
- Synthetic identity theft
- Biometrics hacking
- Child identity theft
Medical Identity Theft
Medical identity theft is an umbrella term encompassing numerous types of fraudulent activity related to someone’s medical information. It can be committed on both ends of the healthcare system:
- Patients/consumers—A fraudster may steal a person’s Medicare number, health insurance account number, or other records to obtain health coverage or illegally purchase prescription drugs. The latter case is common with drug dealers and traffickers who abuse private information to keep stocking up on drugs that can’t be obtained over the counter
- Providers—Healthcare staff might file fake insurance claims to steal reimbursements for medical procedures that never happened. This is either done for personal gain or buffering the costs of providing services to uninsured patients
The best way to avoid the first scenario is to be highly cautious about sharing your medical information. Nobody but you needs access to it, so make sure to keep all relevant documentation safe.
There’s not much you can do to prevent fraud committed by the provider besides trusting they’ll adhere to the regulations imposed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The good news is that such theft isn’t particularly common, as most healthcare providers manage patient information responsibly.
Account Takeover
Account Takeover (ATO) has seen an astronomical rise in the past few years. Sift’s Q3 2021 report showed an increase of 307% in ATO cases between 2019 and 2021, while the Q3 2022 report showed a further 131% rise in only the first half of 2022.
Disturbing as these statistics may be, they don’t come as a surprise when you factor in the ever-increasing use of social media and online platforms in general. While ATO can happen in various ways, the general mechanism involves three steps:
- The fraudster steals the target’s login credentials, typically through a cyberattack like phishing or malware
- They change the password and lock the user out of their account
- The scammer impersonates the victim using their accounts, often to obtain money in their name
In most cases, the victim doesn’t realize their account was breached until they try logging into it. The thief may have already abused their account by then, which makes damage control and recovery challenging.
To protect yourself from account takeover, you should follow some simple yet effective cybersecurity practices:
- Use two-factor authentication (2FA) whenever possible—Implementing 2FA gives you another security layer in the form of a one-time passcode sent to a trusted device after you log into your account
- Avoid public WiFi—Public networks are often unsecured, so a hacker can intercept the traffic and steal your credentials
- Log out of accounts on shared devices—If you access your account from a device with multiple users, make sure to log out as soon as you’re done
SSN Identity Theft
SSN theft isn’t new, but it has become harder to resolve over the last decade as a result of the Social Security Administration’s (SSA) decision to start randomizing SSNs in 2011. SSNs of children born after this change no longer have any geographical significance, which makes them more challenging to trace back to the holder.
This is why SSNs—particularly children’s—are highly appealing to fraudsters. A stolen SSN can be used for numerous purposes, including the following:
- Obtaining Social Security benefits in the holder’s name
- Stealing tax refunds
- Creating a new identity (which will be elaborated on later in this article)
SSN theft can have long-lasting consequences because this number is the essence of one’s identity. The best way to recover from it is to change the number, but this is only allowed in a handful of situations. You must prove that you’re suffering ongoing harm and can’t find another way of resolving ID fraud, and the SSA might consider issuing a new number.
To prevent your SSN from being stolen, avoid carrying your Social Security card with you routinely. You should also be careful when filling out forms and leave the SSN out whenever possible.
Identity Cloning
Many ID thefts result in one-off fraud or limited use of the victim’s identity. This isn’t the case with identity cloning, which is far more elaborate and heinous. Instead of stealing specific PII, the perpetrator uncovers as many details about the victim’s life and uses this information to impersonate them.
If successful, identity fraud can make it seem as if two people live identical lives. The fraudster can assume every aspect of the victim’s identity and use it to hide their own.
To prolong the ruse as much as possible, fraudsters sometimes target the identities of children or the deceased. In one of the best-known cases of this crime, a woman spent 28 years living under someone else’s identity.
Signs of identity cloning overlap with those of other theft types because this is a multifaceted crime involving various aspects of your identity. You may notice any of the following:
- Unfamiliar bills in your name
- Changes to your credit score that weren’t caused by your credit activity
- Bounced checks
- Strange correspondence from different authorities or regulatory bodies
If any red flags show up, visit the FTC’s identity theft page to report the fraud and explore your remediation options.
Synthetic Identity Theft
Synthetic identity theft has become especially widespread in recent times, robbing victims and financial institutions of billions of dollars annually. Unlike typical impersonation, it involves the combination of the victim’s real PII and fake information, which creates a new identity that can be exceptionally difficult to track.
This form of fraud is financially motivated in most cases, and it results in fraudulent credit accounts connected to the victim’s identity. The following diagram from the Federal Reserve’s whitepaper on synthetic identity theft detection explains how scammers defraud lenders using synthetic identities:
Source: The Federal Reserve: Detecting Synthetic Identities in the U.S. Payment System
Obtaining credit is hard without a credit history, so the scammer creates it by making small purchases and repaying their debt timely. Once they’ve improved their credit profile, the fraudster applies for larger loans and vanishes without paying.
This debt stays connected to the victim’s SSN, so they may be liable for all the charges. While some loans may be discharged under specific circumstances, it’s more common for the victim to end up with excessive debt and a severely damaged credit score.
Proactive and timely credit profile monitoring can be an effective way to minimize the risk of fraudulent accounts. You can do this in two ways:
- Reaching out to the three major consumer credit bureaus (Experian, Equifax, TransUnion) regularly to inquire about your credit
- Signing up for credit and identity monitoring services like FreeKick from Credit Strong
Biometrics Hacking
While biometric authentication is typically considered more secure than traditional credentials, cybercriminals have found several ways to steal biometric data. Facial, fingerprint, and retina scans can be recorded and misused to steal the owner’s identity.
The following table explains some of the most common tactics thieves use to hack biometrics:
| Tactic | How It Works |
| Skimming | A so-called skimmer is placed on a scanner to collect biometric information. This type of theft is commonly used for fingerprints |
| Spoofing | The fraudster replicates someone’s retina or fingerprint so that it looks similar enough to the original |
| Replay attacks | A biometric template is intercepted during authentication and replayed to give the thief access to the account |
Biometrics hacking can be used to steal highly confidential information like bank details and government records. This crime can be difficult to resolve because proving that someone has abused your biometric data is quite challenging.
One of the best ways to protect yourself from hacking is to use multi-factor authentication (MFA). It’s similar to 2FA, except it can involve more than one backup authentication method. The more security layers you have, the harder it is for a hacker to steal your identity, even if they obtain your biometric data.
Child Identity Theft
Children’s identities aren’t subject to comprehensive monitoring and are typically unused. Paired with the aforementioned SSN randomization, this makes them more appealing to criminals than adults’ identities.
A child is unlikely to monitor their credit, so if a fraudster starts a credit profile in their name, they have numerous opportunities to commit fraud before any red flags show up. Parents are often unaware that their children have fallen victim to theft until they’re old enough to start building a credit history and are rejected by lenders.
Other signs of child identity theft include the following:
- Suspicious mail addressing the child (legal notices, bills, pre-approved credit card offers, etc.)
- Notices from the IRS despite the child being claimed as your dependent
- Denial of student aid, government benefits, or Supplemental Security Income (SSI) benefits as a result of someone having obtained them
The most worrisome problem with child identity theft is the lack of proactive security measures. ID fraud is often discovered once the thief has already committed a crime, and there’s not much a parent can do besides staying on the lookout for warning signs.
The best way to avoid subjecting yourself to such constant anxiety is to outsource identity protection. If you need a trusted partner in keeping your child safe from ID theft, FreeKick can help.
FreeKick—Identity Monitoring and Credit Building for Children and Young Adults
Powered by Austin Capital Bank, FreeKick is an FDIC-insured deposit account that includes premium identity protection services for your whole family and establishes and builds a strong credit profile for your children.
Freekick is available exclusively at www.FreeKick.bank from Austin Capital Bank, an independent community bank that offers accounts and services nationwide and is recognized as one of the leading independent community banks in the United States.
FreeKick’s Identity Monitoring Services (Coming Soon)
To give parents the upper hand when it comes to child identity theft, FreeKick offers various services that significantly reduce the risk of this crime.
FreeKick provides identity protection for both minors and adult children and parents—here are all the services included:
| Identity Protection for Minors | Identity Protection for Adult Children and Parents |
| Credit profile monitoring Social Security number monitoring Dark web monitoring for child’s personal information Up to $1 million identity theft insurance Full-service white-glove concierge credit restoration Sex offender monitoring—based on sponsor parent’s address | Credit profile monitoring Social Security number monitoring Dark web monitoring for personal information Up to $1 million identity theft insurance Full-service white-glove concierge credit restoration Lost wallet protection Court records monitoring Change of address monitoring Non-Credit (Payday) loan monitoring Free FICO® Score monthly FICO® Score factors Experian credit report monthly |
Every plan includes identity protection for up to two adult parents and six minor or adult children.
Credit Building and Credit Profile Monitoring (Coming Soon)
FreeKick goes beyond identity monitoring to help you give your child a brighter future. A strong credit profile can help them save over $200,000 throughout adulthood, and FreeKick lets them get an early start through parent-sponsored credit building.
Building credit is simple with FreeKick. Once you open an account, you Activate Credit Building.
If your child is a legal adult, credit reporting will start within three months after opening the account. If they are a minor, they can activate credit reporting once they turn 18 (19 in Alabama) by selecting Activate Credit Reporting.
Once credit reporting is activated, a credit account for $1,000 will be reported to all three major consumer credit bureaus—Experian, Equifax, and TransUnion. This will also include the account opening date, amount of credit, type of credit, and last 24 months of payment history, jumpstarting your child’s credit score.
Note that FreeKick does not impact a parent’s credit report or score.
At the end of the 12-month term, you can keep building your child’s credit profile by renewing the account. You can also close it and get 100% of your deposit back.
Note that your child’s credit history can only be reported to credit bureaus if they’re a legal adult. Minors must activate credit reporting upon reaching adulthood because credit bureaus don’t allow it for underage children. With this in mind, if you close the account early while the child is still a minor, no credit can ever be reported for the account.
Choose the Plan That Fits Your Budget
FreeKick provides you with the option to use the savings you already have for your children to protect them and build their credit or get started with just a $10 deposit and a small annual fee.
All plans include premium identity protection for two parents and up to six children and credit building for up to six children aged 14 to 25. FreeKick offers a plan for every budget, so choosing one should be easy:
| Deposit | Annual Fee |
| $3,000 | $0 (Free) |
| $2,000 | $49 |
| $1,000 | $99 |
| $10 | $149 |
FreeKick deposits are FDIC-insured up to $250,000.
Once your account is active, your child will also receive ongoing credit profile monitoring. FreeKick will stay on the lookout for any errors and provide you with monthly updates of your child’s FICO® score so that you can monitor their progress.
Why Opt for FreeKick?
With FreeKick, you can save over $10,000 during your children’s childhood with family identity protection—let’s take a look:
| Cost Details | FreeKick1 | FreeKick1 | LifeLock2 |
| FDIC-insured deposit | $3,000 | $10 | $0 |
| Cost per year | $0 | $149 | $600 |
| Annual savings | $600 | $451 | |
| Savings over 18 years | $10,800 | $8,118 |
1 FreeKick plans cover two parents and up to six children. The table shows two FreeKick’s plans
2 LifeLock Advantage Family plan for two parents and up to five children. The annual plan is $599.99, and the monthly plan is $59.99/mo, $719.88 for 12 months
If you want experts to keep a watchful eye on your child’s PII while you’re giving them an easier future, sign up for FreeKick today.
