Top 3 Tactics Used by Identity Theft Criminals and How You Can Protect Yourself
Think like a thief to protect yourself from today’s most popular cyber-crimes
Since the introduction of EMV chip reading technology, fraud using counterfeit credit cards has dropped substantially. Yet, overall identity theft and credit card fraud rose by 16 percent in 2016, according to a study done by Javelin Strategy & Research.
That's because high-tech tactics have replaced credit card counterfeiting as the crime of choice for identity thieves. To guard against such digital deception, the first step is being aware of the actions that could put your information at risk.
Criminals go online
Credit card fraud remains one of the most common tactics used by thieves; not surprising since it's the most common method of payment, according to a survey on the Online Fraud Forum. The most popular identity theft tactics today include cases where the criminal does not have access to a physical credit card, or uses a mobile device as a portal to the victim’s personal information. Let's explore these crimes more deeply so you can learn how you can protect yourself.
1. Online shopping encourages card-not-present fraud.
Card-not-present fraud, or fraud without a physical credit card, rose by 40 percent in 2016 according to the Javelin study.
How to protect yourself: Only shop on reputable websites that use SSL-encryption, the industry standard used by the world’s top banks and e-commerce sites. Consider using a virtual account number, a substitute credit or debit card number that is only valid for one purchase or a limited amount of time. Bank of America and Citi currently offer this service free for accountholders on their websites. In addition, a start-up called Privacy.com provides virtual numbers for debit cards.
Smart tip: Set up a PayPal account that isn’t linked to your primary bank account for online purchases, especially during the holiday season when online fraud peaks. Make sure you use unique, hard-to-guess passwords for each of your online shopping accounts, such as Amazon and Etsy.
2. Bank account takeovers hit consumers where they live
Account takeovers rose by 31 percent last year, in spite of banks' efforts to increase cybersecurity using advanced methods. When a criminal takes over your bank account, they can wipe out your balance and potentially gain access to linked accounts.
How to protect yourself: Use a credit card instead of a debit card whenever possible. Most credit cards have fraud liability protection, and even if your credit card is stolen, you have time to make a fraud claim before you are responsible for any amount (usually, the liability is capped at $50). Bank account takeovers can leave you short of cash since it takes time before the funds are replaced.
Since most cyberattacks also involve in-person spying, it's important to guard your PIN and bank account information carefully.
3. Criminals go mobile with smartphone takeovers
When their credit card counterfeiting methods were foiled, criminals started getting smart about smartphones—and the wealth of information stored inside them. With smartphone access, they can even penetrate accounts that use two-factor authentication, since they can see your text messages.
How do they do it? Through unsecured Wi-Fi networks, lost or stolen phones, or through a technique called "SIM-swap fraud," where they create a new SIM card tied to an existing mobile account.
How to protect yourself: Whenever possible, only use banking or shopping apps from your home’s secured Wi-Fi network, using a third-party payment service such as PayPal or Apple Pay, or with a virtual account number. Password-protect your phone or, better yet, use fingerprint protection. Download an app that permits you to remotely wipe your phone if it’s lost or stolen.
Be proactive and alert about identity theft and credit card fraud
Staying one step ahead of criminals requires understanding the type of crimes they commit and protecting yourself. Monitoring your credit and setting alerts through a credit monitoring service can also help you flag fraud quickly before too much damage occurs—protecting your cash flow and your credit score.