Today’s Fraud Environment and What to do About It
September 11, 2024
In early 2024, a hacking group allegedly stole the personal records of 2.9 billion1 people. The 277.1 gigabytes of data included financial information and social security numbers, and the hacking group claims to be selling it on the dark web. Though it may sound dramatic, this example is just one of many - in fact, Americans lost $43 billion2 to identity theft last year. To protect your financial wellbeing, it’s vital to stay up to date on fraud tactics and work on proactive prevention.
Identity theft cases have soared over the past five years. In 2023, total losses increased by 13% from the previous year. The Federal Trade Commission (FTC) received over 5.39 million3 reports last year, of which half were for fraud and a quarter for identity theft. Experts suspect that these alarming reports are actually lower than the real numbers - identity theft crimes are notoriously underreported.
It’s important to keep a careful eye on your financial accounts and history to identify discrepancies and keep yourself safe. Identity fraud occurs most commonly via credit cards, bank accounts, government benefits, medical services, and loans. Traditional identity fraud involves obtaining personal information to access your accounts. Scammers might impersonate trusted institutions like banks, retailers, or even government agencies, luring you to hand over details.
As we all rely more on digital services, cybercrime becomes more prevalent, and fraudsters adopt new tactics. Digital scams might take the form of phishing emails, where a criminal requests information. “Smishing” is a variant that takes place over texts or social media. To avoid falling prey to these tactics, make sure to verify the identity of the sender before sharing information. If they claim to represent a financial institution or government agency, contact that source through official channels instead of responding directly.
It’s important to take proactive steps to prevent fraud. Use unique, strong passwords for every financial account, and enable multi-factor identification for logins. You can use a secure password keeper app to keep track of your account information. Update passwords regularly, and make sure you’re keeping an eye on all accounts on a regular basis.
In the internet era, identity fraud will continue to escalate, and you need to protect yourself more actively. At the current moment, there is a new case of identity theft every 22 seconds4. Resolving a case of identity fraud costs an average of $202, according to AARP, on top of stolen assets that cannot be recovered. The market for identity theft protection services could be worth as much as $28 billion by the end of the decade.
Luckily, there are many resources available to help you prevent and resolve identity fraud. If you suspect that you’ve fallen victim to a scam, contact your financial institutions, credit card providers, and other financial entities to take the first steps toward resolving the issue. Freeze your credit to mitigate damage, and seek advice from trusted experts. Affinity members should call our Member Service Center immediately at 800-325-0808. Being proactive instead of reactive is essential as well by implementing additional security or safety measures as a precaution is always better than trying to do so in a panic once you are a victim. Who knows, it might even prevent the worst-case scenario from happening.
You should report confirmed scams to the Federal Trade Commission (FTC) and local law enforcement. This will help them stop scammers and develop ways to protect people in your community and beyond. For more resources on understanding and preventing fraud, explore Affinity’s Fraud Prevention Hub6.
This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.
1Retrieved from: https://www.usatoday.com/story/tech/2024/08/15/social-security-hack-national-public-data-breach/74807903007/
2Retrieved from: https://www.aarp.org/money/scams-fraud/info-2024/identity-fraud-report.html
3Retrieved from: https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime
4Retrieved from: https://identitytheft.org/statistics/#:~:text=Simple%20methods%20such%20as%20traditional,a%20bigger%20issue%20for%20Americans
5Retrieved from: http://reportfraud.ftc.gov
6Retrieved from: https://www.affinityfcu.com/fraud-prevention-hub/