New Form of Identity Fraud Soars as Crooks Switch Tactics

Photo (cc) by Aranami

Just as new chip-and-pin credit cards help shield us from one kind of identity fraud, crooks are turning to another way to commit crimes — and it’s harder to spot.

Criminals increasingly are opening credit card and other accounts in victims’ names, says a new identity fraud report by Javelin Strategy & Research, a firm that advises the financial industry.

Rather than seeing suspicious charges show up on monthly statements — as would happen if criminals used your existing credit card number fraudulently — you might not spot new-account fraud unless you were checking your credit report, Javelin says.

New-account fraud jumped 113 percent in 2015 and now represents 20 percent of all fraud losses, Javelin says.

Al Pascual, Javelin’s research director and head of fraud and security, says in a press release:

“This just shows that when the industry cracks down on one type of fraud, criminals quickly shift their attack.”

Javelin and others offered tips to combat identity fraud:

  • Monitor your credit report: Cobble together regular free access and monitoring from sites like CreditKarma.com, WalletHub.com or CreditSesame.com. Learn more about how major credit reporting bureaus offer consumers the ability to upload documents to support their case when challenging inaccuracies.
  • Secure your mobile device: Smartphones and tablets have become high-profile targets for both cybercrooks and thieves. Apply software updates when they become available.
  • Exercise good password habits: Strong, unique, regularly updated passwords reduce their value to fraudsters if they’re stolen in a data breach or through malware.
  • Place a security freeze: If you do not plan on opening new accounts soon, a credit report freeze can prevent anyone else from opening an account in your name.
  • Sign up for account alerts: Banks, credit card issuers and brokerages can send emails or text messages about suspicious activity.
  • Take data breach notifications seriously: 1 in 5 data-breach victims suffered fraud in 2015.
  • Seek help fast: The sooner banks, credit card issuers, wireless carriers or other service providers are notified that fraud has occurred on an account, the sooner they can limit the damage.
  • Be alert for international transactions: Let your financial institution know when you are planning to cross borders.

How do your protect yourself against identity fraud? Let us know in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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