Identity Theft: What it Is and How to Stop It
August 20, 2019 in Guide
Identity theft is a a serious crime that is, unfortunately, all too common. Every year at tax time, identity thieves file fraudulent tax returns in order to steal the tax refunds of innocent taxpayers. So what can you do to make sure this doesn’t happen to you? What exactly is identity theft and how do you stop it? In this post, we’re breaking down everything you need to know about identity theft. We’ll talk about what identity theft is and give you some actionable advice on how you can reduce your risk of becoming an identity theft victim.
What Is Identity Theft?
Identity theft is when someone deliberately uses another person’s identity. Generally, a person commits identity theft for some sort of personal gain, such as a financial gain. There are numerous types of identity theft. A very common type of identity theft is tax-related identity theft. Tax-related identity theft is when someone uses another person’s social security number to file a tax return, then fraudulently collects their refund.
Tax-related identity theft can be devastating for those who depend on their tax refund. This type of identity theft can also go unnoticed for long periods of time, which can make recovering a tax refund challenging. Often, people discover tax-related identity theft when they attempt to e-file their return, then find that it has already been filed— and that their refund has already been claimed by someone else. In other cases, the IRS may notice tax-related identity theft before the taxpayer. The IRS may send a letter saying that they noticed that a suspicious return was filed using a person’s social security number.
How Do You Stop Identity Theft?
While you can’t stop criminals from attempting to steal your identity, you can find ways to reduce the risk falling victim to identity theft. There are numerous preventative measures you can take to reduce this risk. Here’s how you can defend against identity theft:
Use security software. To keep the sensitive data on your computer safe, use a trusted security software that includes firewall and anti-virus protections.
Use strong passwords. Always use strong passwords for all your important accounts, like your bank accounts, your email accounts, and all tax-related accounts.
Learn how to spot phishing attempts. Phishing is when a person attempts to learn your personal information in order to steal your identity. Be extremely wary if you receive any email or phone call in which someone requests your personal information. Also, know that the IRS never requests personal information over the phone, so beware of fraudsters who may call you posing as the IRS.
Be wary of suspicious emails. Never click on links or download attachments in a suspicious email. Malicious links or attachments can be used to steal your sensitive personal information.
Protect your physical documents. Store all your sensitive documents in a safe, secure location. Never carry your social security card in your wallet or purse.
File your tax return early. If you file your tax return early, you minimize the amount of time an identity thief would have to file your return before you do.
Be aware of the common warning signs of identity theft. Educate yourself about common identity theft warning signs so you can take swift action if you suspect identity theft. Common warning signs include:
- Bank account withdrawals you do not recognize.
- Missing mail, including missing bills or bank account statements.
- Suspicious activity on your credit report.
- Receiving calls from a debt collector regarding debts you did not incur yourself.
- Receiving medical bills for medical services you did not receive.
- Receiving a notice that states your data was compromised in a data breach.
- Receiving a notice from the IRS that states a suspicious return was filed using your social security number.