Three in five Americans (60%) think it’s likely that identity theft will cause them financial loss next year, according to a new study conducted by The Harris Poll on behalf of the American Institute of CPAs ( AICPA).
“Law enforcement has reported a sharp increase in online scams during the COVID-19 pandemic. Take the time to review your bank statements and credit card activity for unauthorized transactions, while putting in place safeguards such as strong passwords, credit card usage alerts, credit, and two-factor authentication, can go a long way in mitigating the threat of identity theft, ”Gregory J. Anton, CPA, CGMA, Chairman of AICPA’s National CPA Financial Literacy Commission. “Security measures also include being careful when reading emails and clicking on links, finding the latest scams, and taking into account your online presence.
As online shopping increases, few people are taking action to protect themselves
More than half of Americans (56%) say they have increased their online shopping overall since the start of the pandemic, and almost a third (31%) say it has increased significantly. While convenient, shopping online is not without risk. Scammers can gain access to private website data, such as your personal and financial information, which can be used to make unauthorized purchases, or even open new accounts that leverage your identity.
The survey found that since the start of the pandemic, more than a third of U.S. online shoppers (37%) have stored login details, passwords, or credit / debit card information on sites. Web or apps, while only 3 in 10 (28%) have it set alerts on their credit or debit card when a purchase is made without their card present. These statistics may explain why in the past year, one in five Americans (19%) have experienced identity theft or attempted identity theft. These incidents can be quite costly, as Americans lost a total of $ 16.9 billion in 2019 to identity fraud, according to Javelin strategy and research.
While basic steps can help avoid being a victim of fraud, few buyers accept them. The survey found that less than half of Americans (45%) have checked their credit or debit card statements to make sure the charges match their actual purchases since the start of the pandemic. Additionally, nearly 2 in 5 Americans (39%) admit to using the same username and / or password on multiple websites.
“Using the same username and / or password on multiple websites is like using a master key for every locked door in your life. If only one online account is compromised, crooks will have the keys to the information behind each password-protected account, ”said Kim Hardy, CPA / CFF, member of the AICPA’s National CPA Financial Literacy Commission. “The surge in online activity as people spend more time at home during COVID has given bad actors even more opportunities to steal identities. In this environment, it is essential that Americans defend their personal information against fraudulent threats. “
Low-income households less likely to know their credit report
While the survey finds that two-thirds of Americans (67%) have at least checked their credit report, that leaves one-third (33%) of Americans who have never checked their credit report. And those with a household income of less than $ 50,000 were twice as likely to never have checked their credit report as those with a household income of $ 100,000 + (45% vs. 21%). A credit report lists all the debts incurred in your name and serves as a clear way to see if there are any inaccuracies such as someone taking out loans or credit cards using your identity that can ruin your business. credit score.
“Maintaining a good credit rating is important to Americans of all income brackets. A good credit rating can unlock many benefits for long-term financial health, such as access to loans and credit cards on the most favorable terms. While bad credit can make it more difficult to rent a car, buy a home or do a background check for a new job, ”added Anton.
Checking your credit report is the best way to understand your current credit position. Unfortunately, for many, this can lead to a nasty surprise. A majority of those who checked their credit report (68%) had to take action to correct the inaccuracies, the average being 8 specific corrections among those who took action at least once.
Tips to Help Americans Protect Their Identity
Hardy, who has years of forensic accounting experience, suggests that online shoppers take the following four steps:
- “Don’t wait for suspicious activity to happen. Take the time to check your credit score for free at least once a year with one of the three major credit reporting agencies. And if you find that you have been a victim of identity theft, report it immediately to Federal Trade Commission, your local police department and credit reporting agencies. “
- “Shop online from home where you know the device and network are secure. On-the-go shopping online, while convenient, puts your personal information at risk. You have no control over who may use this unsecured public network. “
- “Make sure the shopping websites you visit are secure. The URL, also known as a web address, will indicate whether a website is secure. Look for a website address that begins with “https: //” instead of “http: //” which does not contain the “s”. If you shop on an insecure website, crooks can steal your personal and financial information from any forms you fill out. “
- “Beware of any unsolicited communication regarding COVID-19 that requests your personal information. Federal Trade Commission maintains an up-to-date list of commons scams on their website. “
Americans who want to learn more about the steps they can take to protect themselves against identity theft can visit: 360FinancialLiteracy.org/SafeID.
Additional findings of the investigation:
- One in five Americans (20%) think it is extremely it is likely that identity theft will cause them financial loss next year.
- When it comes to online shopping accounts, only half of Americans (49%) update their passwords more than once a year. A quarter (26%) of Americans only update their passwords online when prompted by a website. And 9% never update their passwords.