What is identity theft?
Identity theft, as it states, is when someone steals another person’s identity with the intent to commit fraud, usually for economic gain. Obviously aware that they have stolen another person’s identity, the offender’s intention is to use it to create new accounts or tamper with existing accounts under the stolen identity.
All sensitive personal information is at risk, as the person committing the crime will have access to a list of resources connected to the stolen identity. These resources can then be used to create accounts in industries such as medical, financial, insurance, gaming and so on.
Whatever an individual might have, that is beneficial to the thieves, is up for grabs once an identity has been stolen.
Identity theft is a major problem worldwide, but specifically in Europe with one in five Europeans having experienced identity fraud in the last couple of years. (GRC World) Furthermore, living in a more digitized world, identities can be easily stolen with a new victim of identity theft occurring every two seconds. (Define Financial)
What is the difference between identity theft and identity fraud?
As mentioned above, identity theft is the act of stealing another’s identity with the intention of using said identity to open new accounts or manipulate existing accounts. Fraud, on the other hand, is the act of stealing information and misusing the personal information and existing accounts of the victim.
For example, say you are a victim of a data breach and someone uses your credit card to make unauthorized purchases. This is an act of fraud. But, if the thief took the information and created a new credit card account or used the identity to apply for a job, this would be considered identity theft.
Though very similar, identity theft cannot happen without fraud since identity fraud is the use of the stolen information, but fraud can happen without leading to identity theft. Either way, this crime affects both the individuals whose identities were stolen and the businesses where the stolen identity has been used to make fraudulent transactions.
What industries are affected by identity theft?
This list can be quite long when it comes to identity theft because once an identity is stolen, thieves have access to almost anything, as previously mentioned. Below are just some of the industries that are affected by identity theft.
For starters, and perhaps the most obvious, is the financial industry. Financial institutions are hit the hardest, with identity theft costing them billions of dollars each year. Due to the industry's large accounts and vast amounts of personal information available, criminals see it as their pot of gold. Credit cards and bank accounts can be easily opened with data from a stolen identity or multiple identities.
Additionally, insurance is also very vulnerable and high on the list since it too also deals with financial transactions. Plus, insurance companies have access to a plethora of data from their clients and provide the perfect target for hackers.
Identity theft in gaming and esports is also becoming more popular as well. According to a study, more than a tenth of gamers have had their identity stolen costing billions of dollars worldwide. Hackers can steal not only items within the gaming world, but also credentials of the players, leading to fake accounts.
Another industry, which can see a lot of identity theft, is the travel and mobility sectors. Under the umbrella term “hospitality,” this industry is ever revolving due to people coming and going. Identities can be stolen, and tickets or reservations can be bought under the stolen identity or new accounts can be opened. Being such a fluctuating business, this can be ideal for hackers and identity thieves.
One other industry, worth taking a look at, is crypto. Continually on the rise, crypto has become more mainstream, thus peaking the interests of fraudsters. Vast amounts of money are being transferred worldwide and identity thieves and fraudsters find weaknesses within the system in order to create new accounts or use stolen identities to take over existing accounts and empty wallets of any available coins. Regulations are therefore a needed safety measure from such fraudulent actions.
How does identity theft occur?
Identity theft can occur in many ways, including old-fashioned ways such as someone stealing your wallet, someone making a copy of your credit card or an individual stealing your mail.
However, today digital identity fraud is more common, especially with most people doing everything digitally due to the pandemic. Identity theft can occur online through phishing scams, downloading malware that steals information, using insecure wireless networks, sharing passwords or having information stolen from a data breach of a company.
How can a business prevent identity theft?
With regulations in place requiring businesses to ask for more KYC data from their clients, businesses are left with the challenge of safely storing this info, so breaches don't occur. Thus, having large amounts of personal data on file from their clients, digital identification procedures are boosting identity theft. Therefore, businesses have a large responsibility when it comes to clients’ data.
In order to prevent identity theft from occurring in a client base, strong KYC processes as well as AML Monitoring and Screening should be put in place. This can be achieved through products such as AutoIdent, VideoIdent and eID, with all meeting regulatory KYC needs and being AML compliant.
How can your customers prevent identity theft?
Despite the many ways an individual's identity can be stolen, there are also ways to prevent this from happening. Clients should keep the following in mind:
- Have up-to-date security software.
- Pay attention for potential spam and scams. Don’t automatically click on links from emails that may seem safe. Check with the sender or look-up the site before proceeding.
- Use strong passwords.
- Don’t share passwords.
- Only use reputable websites.
- Use a secure network.
- Stay alert. Pay attention to anything that may seem insecure.
Rising Identity Theft Increases Need for Identity Verification
Ever since the outbreak of the COVID pandemic, there has been a global increase in identity theft risk. (Statista) Today, one in 15 people using the internet is a victim of identity theft. (Legal Jobs) Thus, safeguarding a digital identity is important.
As identity theft affects millions of individuals around the world, costing trillions of dollars in loss, companies have become aware of the extreme necessity and usefulness of digital identity verification. Therefore, a KYC Check is key for businesses so they know who they are working with and that they're trustworthy.
Whether simply proving a person’s identity through having them take a picture of their ID, proving their identity through video or even NFC-based technology, digital identity verification is particularly important and can help reduce the rising cases of identity theft. And IDnow’s products are here to assist in this endeavor.
Overall, no matter the industry, personal data is there for the taking and no industry is immune to identity theft. Nevertheless, some industries are more valuable and thus more susceptible compared to others, so it’s important to take precautions in order to prevent an identity theft attack.