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Resources > Education Center > Online Identity Theft—What It Is and How To Stay Safe

Online Identity Theft—What It Is and How To Stay Safe

Online identity theft is a growing problem in the digital age. With the rise of online transactions and personal information being shared across the web, it’s easier than ever for criminals to steal your identity and use it for malicious purposes.

Unfortunately, victims of digital identity theft can suffer long-term financial damage, ruined credit ratings, and more. This guide will examine how online identity theft works, showing you how to spot the warning signs and what steps you can take to help protect yourself and your family.

What Is Online Identity Theft?

Online identity theft is the fraudulent acquisition and use of someone’s personal information, such as Social Security number (SSN), credit card number, or bank account information. As more areas of our lives move online, this type of identity theft has become increasingly common.

According to a recent study, about 42 million Americans were victims of identity fraud in 2021—and 27 million of those affected were victims of online identity theft, losing a combined $28 million. These sobering statistics underscore the need for enhanced online security measures and heightened vigilance over our identities online.

What Are the Most Common Types of Digital Identity Theft?

There are different methods that cybercriminals use for identity theft, each based on the nature of the information at their disposal:

  • Child identity theft—With this type of fraud, children’s SSNs are exploited to obtain jobs, credit, licenses, or properties based on clean records. A Carnegie Mellon study involving 40,000 children found that about one in ten children becomes victims of this crime
  • Financial identity theft—This type of fraud occurs when attackers misuse your financial data to gain credit, products, or services. It’s a widespread type of identity theft with both online and offline forms
  • Identity cloning—Involves criminals adopting your identity for the purposes of hiding their activities or felonies. It can include concealing illegal status, eluding debts, or tarnishing your reputation
  • Social media impersonation—Entails cloning the identities of individuals or companies online, aiming to scam your contacts or blackmail you
  • Medical identity theft—Criminals can use your health data to misuse health insurance, receive treatment posing as you, modify your health records, or profit from health benefit programs
  • Synthetic identity theft—This stealthy type of ID theft combines real and fabricated details (like a real SSN with a made-up name) to deceive authentication checks. It’s especially difficult to detect because of its insidious nature
  • Tax identity theft—Malicious individuals can file fraudulent tax returns in your name to redirect refunds to their accounts

How Does Digital Identity Theft Happen Online?

The techniques cybercriminals use to steal online identities are numerous and ever-evolving. Online criminals can steal your identity via:

  1. Phishing emails—This method involves criminals sending emails posing as a legitimate company to trick you into entering your login credentials or account information
  2. Malware—Viruses, worms, and spyware infect your computer and steal your data in the background
  3. Social media—Scammers create fake profiles to befriend people and collect personal details that can be used to access accounts or open new ones in your name

Warning Signs of Online Identity Theft

Falling victim to online identity theft can be a daunting experience, leading to financial loss, stress, and potential harm to one’s reputation. Recognizing the warning signs of digital identity theft is crucial to limit the damage. Here are some common ones:

Signs of Online Identity TheftDescription
Unfamiliar transactionsUnauthorized withdrawals or purchases from your bank account can be an immediate sign of identity theft. Check bank statements and credit card transactions regularly to catch this early in case it occurs
Missing mailIf you suddenly stop receiving your bank statements, credit card bills, or other financial documents, someone might have stolen your identity and changed your address to hide illicit activities
Denied creditIf you have a good credit score but get denied credit or are offered high interest rates, it could indicate that someone has accessed your information and harmed your credit
Debt collection callsIf you’re receiving calls from debt collectors about debts that aren’t yours, it’s a strong indicator of identity fraud
Suspicious emails or phishing attemptsReceiving emails requesting personal information, especially if they look like they’re from legitimate institutions, can be a tactic identity thieves use
Tax-related anomaliesIf you receive a notification that more than one tax return was filed in your name or have unexplained income from an employer you don’t work for, someone might be using your identity

What To Do if You Are a Victim of Digital Identity Theft

If you discover that you or a member of your family are a victim of online identity theft, it’s essential to act quickly to minimize the damage. Here are the steps you should take:

  • File a police report—Report the crime to your local police department. Provide them with all evidence, such as any communications with the identity criminals
  • Report to credit bureaus—Notify one of the three major credit bureaus (Equifax, Experian, and TransUnion) to place a fraud alert or freeze your credit
  • File a report with the Federal Trade Commission (FTC)—Report the incident to the FTC to get a recovery plan and step-by-step guidance
  • Contact financial institutions—If your bank account or credit card information has been compromised, contact your bank or credit card provider immediately. They can freeze your accounts, preventing further unauthorized transactions
  • Change passwords—For compromised accounts, change the password immediately. If you use the same password on multiple sites (which you shouldn’t do), change those as well

How To Protect Your Family From Online Identity Theft

Apart from acting swiftly if identity theft occurs, it’s equally important to stay proactive and implement measures to protect your family from cybercrime identity theft.—especially children, as they are the most vulnerable group. Social media platforms and online gaming environments provide your children with an avenue to express themselves and connect with peers, but they also inadvertently expose them to the internet’s underbelly.

Protecting your child from internet identity theft involves both educating them and taking practical steps to ensure their safety. Here are five effective tips to help safeguard your child’s identity online and protect your family:

  1. Use strong and unique passwords
  2. Install security software
  3. Teach your child about online safety
  4. Stay informed and update security measures
  5. Monitor credit reports

Use Strong and Unique Passwords

Use secure passwords for your accounts, and teach your children the importance of creating strong passwords that include a mix of letters, numbers, and symbols. Update all passwords regularly and explain to your children that they shouldn’t share them with friends.

Avoid reusing the same password across sites. Using a password manager app can help keep track of all your or your child’s logins—you can teach them how to use a password manager so they can track logins more easily and safely store their online credentials.

Install Security Software

Ensure all your family’s devices have the latest antivirus and security software installed. Some security packages offer parental controls that can help you manage your children’s online activities. For added security, turn on two-factor authentication on your accounts whenever possible.

Teach Your Children About Online Safety

Educate your children about the kinds of information they should never share online, including full name, address, phone number, school name, and other personal identifiers. Make sure your children’s social media accounts and online profiles have strict privacy settings.

Many online platforms offer account notification settings that alert you to unusual activities, such as logins from new devices or failed password attempts—enable these to keep track of your children’s account security.

Stay Informed and Update Security Measures

As the digital landscape is always changing, so are the tactics used by identity thieves. Keep yourself informed about the latest news on online threats and scams, and update your security measures accordingly.

Monitor Credit Reports

Regularly check financial statements, bank accounts, and credit reports for unauthorized activity, like unknown charges. Though it might seem premature, check if your child has a credit report, too. If your child doesn’t have a credit history you know of (and they shouldn’t, as the CARD Act of 2009 made it practically impossible for anyone under 21 to have one), any credit activity in their name can indicate child identity theft. Early detection of anything unusual is critical to limiting damage.

By implementing these tips, you can create a much safer online environment for both yourself and your children. Safeguarding your family’s identities online takes a lot of time and effort. Luckily, you can turn to a dedicated identity monitoring service like FreeKick for help.

FreeKick—The Premier Solution for Your Family’s Identity Protection

Powered by Austin Capital Bank, FreeKick is tailored to aid in identity monitoring for two adult parents and up to six children aged 0 to 25. Besides protecting your and your family’s identities, FreeKick also actively helps build a strong credit profile for your children aged 14 to 25.

A particularly helpful feature for protecting the safety of your family’s identities online is FreeKick’s Dark Web monitoring, which tracks your personal data and lets you know if your identity has been compromised. 

FreeKick’s ID Monitoring Services (Coming Soon)

FreeKick’s identity protection services offer a comprehensive set of features that can help monitor, protect, and restore the identities of all your family members.

Identity protection services for parents and adult children include:

  • Credit profile monitoring
  • SSN 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

Identity protection services for minors include:

  • Credit profile monitoring 
  • SSN 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

Parent-Sponsored Credit Building With FreeKick (Coming Soon)

FreeKick offers more than just identity monitoring—you also get credit building for your children aged 14–25 through a parent-backed credit-building system. 

Starting the credit-building journey for your child is easy—once you open an account at FreeKick.bank, you just have to select Activate Credit Building in your account dashboard (when your child turns 14). Once they become a legal adult (age 18 in most states), all they have to do is select Activate Credit Reporting. If they are already an adult, they don’t have to go through this process—FreeKick will report their credit to three major credit bureaus for them.

FreeKick Pricing

FreeKick offers various plans suitable for different budgets. All plans include identity monitoring services for up to two adult parents and six children, as well as credit-building features for up to six children aged 14–25. Take a look at the following table for more information:

FDIC-Insured Deposit AmountAnnual Fee
$3,000$0 (Free)

If you want to fortify your child’s credit profile for a solid financial future and protect your family’s identity online—sign up for FreeKick today.