The Far-reaching Consequences of Account Fraud

Tuesday, April 26th, 2022

Financial fraud can be defined as the use of illegal means to obtain money or property or to obtain money or property by deceptively promising a benefit. When someone steals your identity and uses it to commit fraud, the term used is identity theft. Identity theft is one of the most common forms of financial fraud.

Losing sensitive personal information to fraudsters can lead to serious consequences including financial loss and harm to other persons or businesses that approve the stolen data when selling an item or service to the perpetrator. That being said, your banking institution should take liability and refund any amount you lose due to identity theft.

Identity Theft: How it Happens

Identity theft occurs when someone uses another’s personally identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes.

Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

Identity thieves may also try to access your existing bank accounts by using a phone scam known as “vishing” (voice phishing) or by pretending to be you at the bank branch in person. They may also create fake websites which look like your bank’s website so they can trick you into giving them your banking login information.

Types of Identity Fraud

The following are some common types of identity theft:

  • Financial identity theft — is when someone uses another’s information for financial gain. This includes obtaining loans, credit cards, or bank accounts; writing bad checks; or renting property.
  • Criminal identity theft — is when someone gives another’s name and personal information to police during an arrest. That person may then have a criminal record under the other individual’s name.
  • Medical identity theft — when someone uses another person’s personal information to receive medical care or submit false claims to insurance companies.
  • Identity cloning — when someone uses another’s personal information to assume his or her identity in daily life.

Take Action If You Suspect You’ve Been Compromised 

If you believe that your SSN has been compromised, request a free copy of your credit report, checking for unauthorized use of your credit. Contact one of the three major credit bureaus listed below, and request that they place a “fraud alert” on your file and no new credit be issued without your approval.

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