Online Fraudsters Are Relentless. 5 Tips For Preventing Identity Theft – Forbes AdvisorJuly 6, 2022
The Covid-19 pandemic hit Americans’ finances hard—and criminals took advantage of that vulnerability.
An alarming number of Americans say they experienced identity theft, or attempted identity theft, during the pandemic. A new survey by Forbes Advisor found that since 2020, four in 10 Americans (39%) reported that someone tried to open, or successfully opened, a bank account, credit card or loan in their name.
Identity theft, which refers to someone stealing your personal information typically for their financial gain, can have devastating consequences—including stolen funds and a lengthy process to recover control of your finances.
Pandemic Made Consumers Targets for Digital Identity Fraud
Identity theft isn’t new. But studies show that as the pandemic’s restrictions forced us to be more online for everything from work to grocery shopping, it also exposed our poor online security habits.
Since the start of the pandemic, more than a third (35%) of survey respondents stated someone used or attempted to use their credit cards, debit cards or bank account.
When the thieves did successfully access the accounts, the consequences were severe: close to one-fourth of Americans reported having over $3,000 stolen from them. In some cases, the amount stolen exceeded $5,000.
“The amount of identity fraud during the pandemic was absolutely massive,” says Naftali Harris, CEO of identity verification company SentiLink. “It was an increase that I don’t think anyone in the industry had ever seen before.”
The financial account fraud happened in tandem with a slew of Covid-relief scams. Many scammers targeted Covid relief programs, including unemployment benefits and stimulus checks. A watchdog for the Department of Labor estimates a significant chunk of at least $163 billion in unemployment-related overpayments were obtained through fraud, with the FTC reporting a 3,000% increase overall in reports of identity theft involving public benefits from 2019-2020.
Experts say that federal and state governments bear some responsibility for the fraud by not providing top-notch security measures to help protect consumers while doling out pandemic aid.
Harris notes that some states lacked email verification from applicants, something he describes as a “basic” form of identity protection. This lack of security, combined with an influx of federal aid money to consumers, served as bait for thieves.
“In their rush to get funds into the hands of folks, [pandemic aid programs] really kind of let their guard down,” says John Wilson, senior fellow of threat research at Agari, an email security solution company. “The original reaction was to send money first, ask questions later—but that unfortunately led to a lot of fraud.”
Once scammers got their hands on relief funds like unemployment benefits, Wilson says they’d often turn around and open a bank account in the victim’s name to deposit the funds. That activity can…