Scams are designed to either steal your money or your identity to steal your money later. Scammers have all kinds of techniques to collect personally identifiable information (PII). Once they have it, they can become you, using your identity to open accounts, file taxes, or obtain medical coverage.  

How this scam works

How do people steal your identity? With enough personal information, a scammer can pretend to be you and commit many crimes. They can make false applications for loans and credit cards, withdraw money from your bank account, or obtain services in your name. They can also sell your information to others on the Internet.

Identity theft may take a long time to detect. Scammers ensure that bills and statements for new accounts are not sent to your address. You may notice what is happening once the scammer has already inflicted substantial damage on your assets, credit, and reputation.

If you believe you are a victim of identity theft, it is essential to act quickly. In the U.S., visit identitytheft.gov for information on how to stop and recover from identity theft. In Canada, the Anti-Fraud Centre has information on identity theft.

How can you spot this type of scam?

Look for unexplained withdrawals, charges, and accounts. Review your bank account and credit card statements regularly. Look for unfamiliar charges, accounts, or withdrawals. Know when your bills are due; one tip-off for identity theft is when you stop receiving certain bills. This can happen because scammers have changed the address associated with your bank account or credit card. If bills don’t arrive on time, follow up with your creditors. Debt collectors may call you about debts that aren’t yours. You can also set up automatic alerts on your accounts so you are notified every time a transaction is made.

Check your credit reports regularly for unauthorized inquiries and accounts. In the U.S., you can check your credit report with each of the three major credit bureaus once per year at AnnualCreditReport.com. This is the only free crediting reporting service authorized by the Federal Trade Commission. Space these checks out throughout the year, and you will quickly know if something is wrong. In Canada, the Financial Consumer Agency of Canada provides information on requesting a free credit report.

How to protect yourself against this scam 

• Be careful with your personal information. Treat your personal information like the valuable commodity it is. Ensure you shred documents containing your bank account information, Social Security/Social Insurance number, or other personal information. These include credit card applications, insurance forms, financial statements, health forms, and billing statements from utilities and phone services. Cut up expired credit and debit cards, and cut through the numbers before you dispose of them.
  
• Secure personal documents at home. If you have roommates, employ outside help, or have contractors in your home, ensure personal documents are in a safe place – preferably under lock and key – and not lying out in plain sight. Minimize personal information on checks. You don’t need to include your Social Security number, driver’s license, or phone number.
  
• Be alert to phishing attempts. Scammers are sophisticated; their phishing attempts may come via email, text, social media messages, or even phone calls. Be suspicious of any unsolicited communication asking you for personal information. Whether it’s a supposed tech support call, an offer for a free cruise, or a charity plea, they may be after your personal information. Click here for BBB’s tips on phishing and tech support scams.

Protect yourself against hackers

Use strong passwords or passphrases. Avoid using your birth date, child’s name or birth date, mother’s maiden name, the last four digits of your Social Security number, or really obvious ones like “123456” or “password.”

• Change your passwords frequently.
  
• Use different passwords for each online account or website.
  
• Be careful about the types of information you share online, especially if it is information that could be used to get past security questions on your accounts (things like your first car, first pet’s name, city where you were born).
  
• Shred outdated documents with personal information. While you should keep your tax returns forever, you should shred supporting documents for your tax returns after seven years. After one year, shred bank statements, pay stubs, and medical bills (unless you have an unresolved insurance dispute). Shred utility bills a month after they had been paid.