Financial identity theft occurs when someone steals your personal and financial information, such as your name, address, Social Security number, credit card or bank account numbers, and uses it to make unauthorized purchases or to access your financial accounts without your permission.
The goal of financial identity theft is to gain access to your financial resources, steal your money or use your credit for their own purposes. This can damage your credit score and financial standing, and it can take a lot of time and effort to resolve the situation and recover your losses.

How Does Financial Identity Theft Happen?
- Skimming: Thieves can use skimming devices at ATMs or gas pumps to steal your credit or debit card information.
- Phishing: Scammers can send emails or text messages that appear to be from your bank or other financial institutions, asking you to provide personal information such as your account number or password.
- Social engineering: Thieves can use social engineering tactics, such as impersonating someone in authority, to trick you into giving them your personal or financial information.
- Data breaches: Hackers can gain access to large databases of personal and financial information through data breaches at companies or organizations that store your data.
- Stealing mail: Thieves can steal mail from your mailbox or trash to obtain your financial information.
- Shoulder surfing: Thieves can look over your shoulder while you’re entering your PIN number or other financial information.
- Malware: Thieves can use malware to infect your computer or mobile device and steal your personal and financial information.
Signs of Financial Identity Theft
Here are some signs that you may be a victim of financial identity theft:
- Unexplained charges or withdrawals: You notice charges or withdrawals on your financial accounts that you didn’t make or authorize.
- Unexpected bills or collections notices: You receive bills or collections notices for services or products that you didn’t purchase.
- Denied credit or loan applications: You’re denied credit or a loan, even though you have a good credit score and financial history.
- Unknown accounts or inquiries: You see new accounts or inquiries on your credit report that you didn’t initiate.
- Missing mail: You stop receiving mail, such as bills or financial statements, that you normally receive.
- Poor credit score: Your credit score drops unexpectedly, even though you haven’t changed your credit habits.
How Can You Prevent Financial Identity Theft?
The following are some steps you can take to prevent financial identity theft:
- Monitor your accounts: Regularly check your bank and credit card accounts for any unauthorized transactions.
- Use strong passwords: Use unique, strong passwords for your financial accounts, and avoid using the same password across multiple accounts.
- Be careful with personal information: Don’t share personal information such as your Social Security number, date of birth, or bank account details with anyone unless you are sure of their identity and need for the information.
- Protect your mail: Make sure your mailbox is secure and collect your mail promptly. Consider using a locked mailbox or a post office box.
- Shred documents: Shred financial documents before throwing them away, including credit card offers and statements.
- Use secure websites: Only use secure, trusted websites when making online purchases or entering personal information.
- Be cautious of public Wi-Fi: Avoid using public Wi-Fi networks to access financial accounts or enter personal information.
- Check your credit report: Regularly check your credit report for any unusual activity or errors.
- Consider identity theft protection services: Consider using identity theft protection services that can monitor your credit and alert you to any suspicious activity.
What Should You Do if You Suspect Financial Identity Theft
If you suspect financial identity theft, it’s important to take immediate action to minimize the damage and protect your financial accounts. Here are the steps you should take:
- Contact your financial institutions: Call your bank and credit card companies and report the suspicious activity. Ask them to freeze or close any accounts that have been compromised.
- File a report with the authorities: Contact your local law enforcement agency and file a report. This can help with any legal action and can also help you get any fraudulent accounts or charges removed from your credit report.
- Check your credit report: Request a free copy of your credit report from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) and check for any unauthorized accounts or inquiries.
- Place a fraud alert: Consider placing a fraud alert on your credit report to alert lenders to verify your identity before issuing credit.
- Monitor your accounts: Regularly monitor your bank and credit card accounts for any further unauthorized activity.
- Update your passwords: Change the passwords for all of your financial accounts and make sure you use strong, unique passwords for each one.