We hear the terms identity theft and identity fraud more and more often these days. They sound like things we don’t want to experience, but what are they?

“Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain,” says the Department of Justice.

When it comes to identity theft, it can cover a broad range of activities. Where people would once just retrieve your credit card offers from the trash and sign up for a new card pretending to be you, the Internet has now opened the gates to generations of hackers and criminals.

Unfortunately for those of us who shop, bank and pay bills online, it may not be that difficult for the bad guys to find their way through the digital back door or a smart con job. How do they do it?

Phishing vs. Pharming

There’s phishing, which is when you receive emails from what seems to be a reputable organization asking you to share your personal information like passwords and credit card numbers, and malware,  malicious software that’s designed to damage your computer or gain back-door access to it.

There’s also pharming, which happens when your browser is hijacked and redirected to a fake version of a real website — and you are none the wiser. And don’t forget the now infamous data breaches that have affected major hotel chains, department stores and even credit bureaus.

Then there’s your smartphone. With the rapid evolution of cell phones, it was just a matter of time before mobile malware became a thing among criminals. Given how many of us conduct much of our lives on our smartphones — shopping, banking, social media, etc. — it makes sense to protect our mobile devices the same way we do our laptops.    

Fortunately, there are a number of common-sense ways to avoid becoming a victim of this kind of fraud. In the case of phishing,you can never be too careful. For instance, don’t reply to an email that you’re not 100 percent sure of, and don’t share any personal or confidential information via email. If you suspect a scam, close your email program and your browser, and call the company in question to verify. When it comes to pharming, the burden of prevention rests largely in the hands of your ISP. But you can be proactive by confirming that the URL of the site you’re using is spelled correctly and that it has switched from “http” to “https,” which means it’s secure.

Defending against mobile malware is trickier because there are plenty of bad apps out there disguised as legitimate ones. There are several ways to protect your smartphone, but among the most reliable is to research apps before you download them and then download only from known trustworthy stores.

What Are the Types of Identity Theft?

Consider some common types of identity theft and the steps you can take to protect yourself:

Financial Identity Theft. Financial identity theft includes data breaches and credit card fraud, hackers gaining access to your bank account and personal information, taking out car loans, applying for credit cards and more. If the fraudster leaves a trail of unpaid bills in your name, for example, that can wreak havoc with your credit.

Help reduce your risk: If you bank or check your credit card statements online, don’t use the same password or log-in credentials for all of those accounts. Even more important, make your passwords complicated or unexpected. In other words, don’t use something obvious like your birthday.

Social Security Identity Theft. Your Social Security number may be the most valuable piece of information a thief can steal online. We use them to get credit, request government benefits, and more. Thanks to data breaches in 2017, stolen Social Security numbers outnumbered stolen credit card numbers for the first time.

Help reduce your risk: First and foremost, experts advise against carrying your Social Security card (or any other piece of ID that has your SS number on it) in your wallet. You can also largely avoid potential phishing situations or email scams by never giving out your social security number, either online or over the phone.

Synthetic Identity Theft. This is when criminals combine bogus data with real information, say a fictitious name with a real Social Security number, address or phone number cherry-picked from different people, and create an entirely new, fake person, who can then apply for credit, open new accounts, or take out loans. According to the U.S. Federal Trade Commission, this is the fastest-growing form of identity theft and one of the hardest to detect. Children are particularly vulnerable to this kind of identity theft since you usually have to be 18 years old to have your own credit card, as opposed to being an authorized user on a parent’s card. By the time they’re old enough to apply for a card, scammers may have been using their name or social security number for years.

Help reduce your risk: Being careful and vigilant can go a long way toward protecting your financial information and accounts, even if you are only one piece of the synthetic puzzle. As with other forms of identity theft, it’s important to keep your personal data—social security number, bank account numbers, etc—private and away from prying eyes, either online or in the real world. Review your credit reports and yearly social security statement, and pay attention to your mail, in case you spot something sent to your address but in someone else’s name. When in doubt, you can always embrace low-tech measures and shred your documents.

How Can You Protect Yourself?

You can be smart about what you do online and how much or how little information you share. But, you may reach a point where you want help. An identity protection service, is one way to decrease the odds of you being just another victim. As a Disover Cardmember, you have the option of adding Discover’s Identity Theft Protection for just $15 per month.1 This comprehensive service monitors all three credit bureaus for key changes2, thousands of dark websites and more for potential threats to your identity.

In the case of ID theft, You can access up to $1 million of Identity theft insurance for legal expense, reimbursement of stolen funds, lost wages and more covered expenses3 — and count on expert service from 100 percent U. S.-based fraud resolution specialists.

Staying informed about the types of identity theft and utilizing an identity theft protection service may help you protect both your personal finances and peace of mind.


Identity Theft Protection:

  1. This product is only intended for the Primary credit cardmember whose accounts are open, in good standing and have an email address on file. It can only be agreed upon, purchased and delivered online. This product is optional and voluntary.
  2. Key changes include: New accounts, credit inquiries, address changes, potentially negative information such as delinquencies, new public records.
  3. Identity Theft Insurance is underwritten by insurance company subsidiaries or affiliates of American International Group, Inc. (AIG). 175 Water Street, New York, New York 10038. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.