Importance of Identity Protection
Do you know what identity theft is? How about identity protection? Well, the Federal Trade Commission believes that 25% of teenagers will experience identity theft before they turn 18. With the amount of identity theft growing each day, it is important to educate ourselves on how to protect ourselves from unwanted third parties. Continue reading to learn how to protect you and your money.
What is financial identity theft?
Financial identity theft is when an individual's financial accounts are compromised by an unwanted person posing as them. Identity theft usually takes place when an unwanted third party has access to your financial information. This can be through your credit card, hacking your personal information online, or a data breach. When a person gets unauthorized access to this information, they also have access to your numbers, name, account information, social security number, address, username and password, and other private details.
There are many effects financial identity can have on a victim. We’ll go over the most common effects of identity theft. The main purpose of identity theft is not only to steal another person’s identity, but to assume the role of someone else in order to have access to their money. The most widespread effect of financial identity theft is a person can lose a large part of their money. With access to financial information, a third party can spend a large sum of your money, even leading to bankruptcy.
And there are even more unintended consequences to this unsolicited spending. Debt is a common consequence of unsolicited spending. The identity thief can rack up thousands of dollars in debt for you. Although if you report it to the Federal Trade Commission (FTC) in time, you won’t have to pay any of the accrued debt other than the first $50. However, this can be a huge blow to your credit history, which you can read more about here. Another effect of identity theft is criminal charges. Depending on what the person does with your identity, you can be faced with criminal charges and maybe even an arrest. This could mean proving your innocence in court.
Identity theft can take a huge toll on the mental health and emotional wellbeing of an individual. It causes many negative consequences that the individual has to deal with, and may even take several months to solve.
Luckily there is a solution to help prevent identity theft from taking place.
Financial identity theft protection is an industry that keeps track of people's credit history, financial activity, and Social Security number use. Some examples of how they can help prevent identity theft is a security freeze and fraud alert.
Since identity protection services are keeping track of your credit history, transaction history, and other data, they can identify when an unusual purchase is made. This can be either in an unusual geographic area, an uncharacteristically large purchase, withdrawal of a large sum of money, etc. They will then notify you, and if they determine that it is in fact identity theft, they will freeze your account to prevent any more credit from being accrued under your name. You can also place a fraud alert on your credit report if you believe you are the victim of financial identity theft.
These services are great ways to be proactive in maintaining financial security. It’s important to remember that most consequences of identity theft can be solved if you are proactive in checking your finances and immediately reaching out to officials if you notice signs of fraud.
