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With the rise of digital technology, came a new wave of security threats that threaten to compromise our online identities and accounts. Identity theft and account takeover are two of the most common types of cybercrime that are giving businesses and individuals serious concerns in today’s digital world. 

Identity theft occurs when someone obtains your personal information and uses it to fraudulently access your accounts. While account takeover occurs when someone gains access to your account and changes the login credentials. 

Both of these threats can have devastating consequences, leaving you vulnerable to financial losses and other forms of fraud. Fortunately, you can take steps to protect yourself and stay secure. This article will provide an overview of identity theft, account takeover, and offer tips for protecting yourself from these threats.

What is Identity Theft and How Does It Happen

Identity theft is a crime where an individual’s personal information, such as their name, Social Security Number (SSN), credit card number, or other identifying information, is stolen and used without their permission. This can occur in various ways, such as through phishing scams, data breaches, or by stealing mail or wallets. Below, we explain the different ways cybercriminals perpetuate identitity theft.

• Phishing scams

Here, scammers use fraudulent emails or websites to trick individuals into giving away their personal information. The emails mimic a legitimate organization, such as a bank or government agency, and request the individual to provide their personal information, such as their SSN or credit card number. However, once the individual provides this information, the identity thief uses it for fraudulent purposes. This can include stealing your money from your bank accounts or impersonating you.

• Data breaches

These are incidents where sensitive information, such as personal and financial data, is stolen from an individual, company or organization. The data may be stolen through hacking, malware, or other means. 

Once the identity thieves steal the data, they can use it to open credit card accounts or execute other fraudulent transactions. Criminals may also use stolen information to commit tax fraud by filing a tax return in the victim’s name and claiming a refund.

• Traditional means

In these cases, the identity thief may obtain personal information by taking your data from without any digital incursion into your data storage. So, they can  go through mailboxes or stealing wallets. 

It’s important to be aware of the various ways that identity theft can occur and take steps to protect yourself. Identity theft is a serious crime that can have severe consequences for the individuals affected. You can help reduce your risk of becoming a victim of identity theft by staying vigilant and being proactive.

Additionally, if you believe that your identity has been stolen, it’s important to report the crime to the appropriate authorities and take steps to resolve the issue.

What is an account takeover, and how does it happen

Account takeover (ATO) is a type of cybercrime in which the criminal gains unauthorized access to and comandeers a person’s online account, such as a bank, email, or social media account. Once the hacker has access to the account, they can steal personal information, commit fraud, or cause other damage.

ATO happens in various ways, some of which include;

• Use of stolen credentials

This happens when an attacker obtains login information through a data breach or phishing scam. Once they have the login information, they can use it to access the account and carry out fraudulent activities.

• Malware attacks

This type of malware steals login information and other personal information from a person’s computer or mobile device. For example, some hackers use malware such as keyloggers to record keystrokes and steal login credentials. Others may be able to use “session hijacking” techniques to gain access to a user’s session without their password.

• Social engineering

Social engineering is when a cybercriminal tricks an individual into giving away their login information or other personal information. This is done through phishing emails, social media messages, or by posing as a customer service representative or other trusted sources.

How to know that hackers have taken over your account

There are some signs that can indicate that an account has been taken over, such as:

• Unusual login attempts
• Sudden changes to account settings
• Unfamiliar transactions or charges
• Unexpected password reset emails

If you suspect that your account has been taken over, report the incident to the appropriate authorities to resolve the issue.

How prevalent is identity theft and account takeover

Identity theft and account takeover are both serious cybercrimes that are becoming more prevalent in today’s digital age.

According to the Federal Trade Commission (FTC), identity theft is the most common type of consumer complaint received by the agency. In 2020, the FTC received around 3 million complaints related to identity theft, with the most common types of identity theft being government documents/benefits fraud, credit card fraud, and phone or utility fraud.

On the other hand, account takeover is also becoming a growing concern for businesses and consumers. A study by Security.org found an estimated 22% of adults in the US falling victim to this type of fraud, and average losses of around $12,000 per case.

These numbers demonstrate the scale and seriousness of the problem. So, it’s important to stay vigilant and take steps to protect your personal information and accounts from being stolen.

How to stay secure in the digital world

Below are some best practices for businesses and individuals to prevent identity theft and account takeover.  

For Businesses

1. KYC and AML verification

One of the most effective ways businesses can protect their customers against identity theft and account takeover is to implement a robust know-your-customer (KYC) and anti-money laundering (AML) verification process. The KYC compliance process involves collecting and verifying information about customers, such as their name, address, and government-issued ID, to confirm their identity. The more you know about a user, the less likely you are to allow fraudsters on your platform.

2. Implement multi-factor authentication

Multi-factor authentication (MFA) is an additional layer of security that requires users to provide multiple forms of verification. This includes a password, fingerprint, or facial recognition, to access an account. This makes it much more difficult for cybercriminals to gain unauthorized access to a customer’s account.

3. Conduct regular security audits and vulnerability assessments

Regular security audits and vulnerability assessments help businesses identify and address any potential security vulnerabilities in their systems. This helps to prevent data breaches and cyberattacks that could result in the loss of personal information and account takeover.

By implementing these measures, businesses protect their customers from identity theft and account takeover and mitigate the risks of fraud and financial losses. Additionally, organizations must have an incident response plan, to enable them to react promptly and effectively during a security breach. Having business insurance can further protect organizations from the financial impacts of security breaches and facilitate their recovery process.

For Individuals

These tips can also help you protect your personal digital interactions: 

1. Use strong and unique passwords

One of the most important steps individuals can take to protect themselves against identity theft and account takeover is to use strong and unique passwords for each of their accounts. Strong passwords should be at least 12 characters long and include a mix of letters, numbers, and special characters. Using unique passwords for each account ensures that if one password is compromised, the cybercriminal won’t have access to other accounts. 

2. Beware of public Wi-Fi networks

Public Wi-Fi networks are easy targets for hackers, so it’s best to avoid them if possible. If you must use a public network, ensure it is secure. Also, do not access any personal accounts while connected. 

3. Avoid clicking on links in emails or messages from unknown sources

Phishing is a common tactic used by cybercriminals to gain access to personal information and accounts. So, do not click on suspicious links in emails or messages from unknown sources, to reduce the risk of falling victim to phishing scams.

4. Use two-factor authentication

Two-factor authentication (2FA) provides an additional layer of security by requiring a second form of verification, such as a text message or fingerprint, in addition to a password. This makes it more difficult for attackers to gain unauthorized access to an account.

5. Monitor your accounts and credit reports regularly

Checking your accounts and credit reports regularly can help you identify any suspicious activity, such as unfamiliar transactions or charges, and take action to resolve the issue.

6. Be cautious when providing personal information online

Individuals should be careful when providing personal information online, especially when dealing with unknown or untrusted sources. Avoid providing personal information via email or social media. Also, be sure to read the privacy policy of any website before entering your information.

7. Secure personal documents

Physical documents containing sensitive information, such as Social Security numbers, should be kept in a secure location and disposed of properly by shredding them.

Wrapping Up

The digital world has become an essential part of our lives, but it also brings multiple security threats. Identity theft and account takeovers are two major problems that can cause serious financial harm. It is essential to understand how these types of attacks work to protect yourself better.  

Fortunately, taking proactive steps such as using secure passwords, monitoring your accounts, and being aware of phishing scams can reduce the risk of identity theft and account takeover. Finally, it is also important to remain alert and report any suspicious activity immediately so that appropriate measures can be taken.