Identity Theft Scams: How to Protect Yourself from Data Breaches, Account Takeovers, and Synthetic Identity Theft

ScamWatchHQ

Aug 25, 2024 — 6 min read

Introduction

Identity theft is a growing concern in our increasingly digital world. As we share more of our personal information online, we become more vulnerable to scams that can have devastating consequences. From data breaches that expose sensitive information to account takeovers that hijack your online presence, scammers are constantly finding new ways to exploit vulnerabilities. In this article, we’ll explore three common identity theft scams—data breach scams, account takeovers, and synthetic identity theft—providing you with the knowledge you need to protect yourself from these threats.

1. Data Breach Scams

What Are Data Breach Scams?
- Data breach scams occur when scammers exploit stolen data from breaches, often selling the information on the dark web or using it to commit identity theft. Data breaches can expose a wide range of personal information, including names, addresses, Social Security numbers, credit card details, and login credentials.
How Data Breach Scams Work
- Exploiting Stolen Data: Once a data breach occurs, scammers may buy the stolen information from the dark web or other illicit sources. They use this data to commit various types of fraud, such as opening credit accounts, filing false tax returns, or making unauthorized purchases.
- Phishing and Social Engineering: Scammers often use data from breaches to craft convincing phishing emails or social engineering attacks. These messages may appear to be from legitimate companies and can trick victims into revealing additional personal information or login credentials.
Red Flags of Data Breach Scams
- Unsolicited Emails: Be wary of unexpected emails claiming to be from companies you do business with, especially if they ask for personal information or prompt you to click on links. Scammers often use breached data to make their phishing attempts more convincing.
- Unexpected Account Activity: If you notice unusual activity on your accounts, such as new credit inquiries, unexplained charges, or unfamiliar login attempts, it could be a sign that your data has been compromised.
- Breached Account Notifications: If a company notifies you that your information was part of a data breach, take it seriously. Even if the notification is legitimate, scammers may send fake breach notifications to trick you into providing more information.
How to Protect Yourself
- Monitor Your Accounts: Regularly review your bank statements, credit card statements, and credit reports for any unauthorized activity. Early detection can help you mitigate the damage caused by identity theft.
- Use Strong, Unique Passwords: Create strong passwords for each of your accounts and avoid reusing them across different sites. Consider using a password manager to help you generate and store complex passwords.
- Enable Two-Factor Authentication (2FA): Whenever possible, enable 2FA on your accounts. This adds an extra layer of security by requiring a second form of verification (such as a code sent to your phone) in addition to your password.

2. Account Takeover

What Is Account Takeover?
- Account takeover occurs when scammers gain unauthorized access to a victim’s online accounts, such as email, social media, or financial accounts. They often achieve this by stealing login credentials through phishing, malware, or by exploiting data from breaches. Once inside, scammers can change account settings, make fraudulent transactions, or lock the victim out of their own account.
How Account Takeover Scams Work
- Phishing Attacks: Scammers send phishing emails that appear to be from legitimate sources, prompting victims to enter their login credentials on fake websites. These credentials are then used to access the victim’s real accounts.
- Malware: Scammers use malware to infect a victim’s device, capturing keystrokes, login information, and other sensitive data. This information is then used to take over the victim’s accounts.
- Exploiting Breached Data: If a victim’s login credentials are exposed in a data breach, scammers may use them to attempt access to the victim’s other accounts, particularly if the same credentials are reused across multiple sites.
Red Flags of Account Takeover
- Unfamiliar Login Attempts: Many online services notify you of login attempts from new devices or locations. If you receive such a notification without having tried to log in, it could be a sign of an account takeover attempt.
- Unusual Account Activity: Watch for signs of unauthorized activity in your accounts, such as password changes, unfamiliar purchases, or new devices being added to your account.
- Locked Out of Your Account: If you suddenly find yourself unable to access one of your accounts, especially if you didn’t initiate a password reset, it could mean a scammer has taken control of your account.
How to Protect Yourself
- Use Unique Passwords for Each Account: Avoid using the same password across multiple accounts. If one account is compromised, it won’t necessarily lead to the compromise of others.
- Enable 2FA: Enabling 2FA can prevent scammers from accessing your account even if they have your password. Choose 2FA methods that use apps or hardware tokens rather than SMS, as these are more secure.
- Be Wary of Phishing: Always verify the legitimacy of any email or message asking for your login information. Hover over links to see the actual URL before clicking, and never enter your credentials on a site you reached through an unsolicited email.

3. Synthetic Identity Theft

What Is Synthetic Identity Theft?
- Synthetic identity theft is a sophisticated form of fraud in which scammers create a new identity by combining real and fake information. This synthetic identity can include a mix of real Social Security numbers, fake names, birthdates, and addresses. Scammers then use these synthetic identities to open accounts, apply for loans, or commit other types of fraud.
How Synthetic Identity Theft Works
- Creating the Synthetic Identity: Scammers often start by acquiring real Social Security numbers, particularly those of minors, deceased individuals, or those who don’t have an established credit history. They then pair these numbers with fake names and other details to create a new identity.
- Building Credit: The scammer may use this synthetic identity to apply for credit, slowly building a credit history. Initially, they might pay off small balances to establish credibility before taking out larger loans or credit lines, which they then default on.
- Exploiting the Identity: Once the synthetic identity has a strong credit history, scammers can use it to commit various types of fraud, such as opening new accounts, applying for loans, or obtaining government benefits.
Red Flags of Synthetic Identity Theft
- Credit Alerts for Unknown Accounts: If you receive alerts from credit monitoring services about new accounts or inquiries in your name, but you haven’t applied for any new credit, it could indicate synthetic identity theft.
- Unfamiliar Bills or Collection Notices: Receiving bills, collection notices, or account statements for services you didn’t sign up for can be a sign that someone has created a synthetic identity using your information.
- Credit Report Inconsistencies: Regularly review your credit reports for any accounts or activity that you don’t recognize. Synthetic identities can sometimes show up as mixed credit files or unexplained changes in your report.
How to Protect Yourself
- Monitor Your Credit Regularly: Regularly check your credit reports for any unusual activity. Consider freezing your credit with the major credit bureaus to prevent new accounts from being opened in your name.
- Protect Your Social Security Number: Avoid sharing your Social Security number unless absolutely necessary. Be cautious about providing it online or over the phone, and ask why it’s needed before disclosing it.
- Monitor Your Child’s Credit: Since minors are often targeted for synthetic identity theft, consider monitoring your child’s credit report. Request a report from the credit bureaus to ensure no unauthorized accounts have been opened in their name.

Conclusion

Identity theft can have far-reaching consequences, affecting your financial health, credit, and personal security. By understanding the tactics used in data breach scams, account takeovers, and synthetic identity theft, you can take proactive steps to protect yourself. Always be vigilant about where and how you share your personal information, monitor your accounts regularly, and use strong security practices to keep your identity safe. Remember, the best defense against identity theft is awareness and precaution. Stay informed, stay secure, and take action at the first sign of suspicious activity.