Having your life’s savings obliterated with no warning, being hounded by debt collectors for thousands of dollars you never even spent, being arrested and potentially facing jail time—the worst-case scenarios that could arise out of identity theft aren’t just terrible. They’re also frighteningly rational fears, because they happen more often than most people think.
That’s not to say that you need to panic if your information has been stolen in a data breach. For most victims of data leaks, the consequences aren’t that dire, with a 2021 study by Javelin Strategy & Research (cited by CNBC) reporting that the average amount of financial loss arising out of identity scams that involve indirect interactions with consumers was $1,100. Still, numerous news stories demonstrate that these extreme outcomes can and do occur… and they could happen to you, too.
Simply put, identity theft can ruin your life, financially and otherwise.
When someone acquires enough of your personal data to steal your identity, your money is no longer safe. The criminal in possession of your information can quickly empty out your bank accounts and max out your credit cards with their own purchases. Every dollar you have to your name could disappear without warning and without a trace.
The risks aren’t limited to the money and lines of credit you already have. With your personal data, an identity thief can open new lines of credit and take out fraudulent loans in your name, running up the financial costs of their crimes well beyond the assets you already possessed. Victims of identity theft have reported being pestered by collections agencies. The damage done by identity theft can cause your credit score to tank, subsequently affecting your life in ways that range from difficulty securing a place to live (whether renting or applying for a mortgage) to reducing your chances of getting a new job.
Believe it or not, the potential problems you could face when someone has stolen your identity could get even worse. In some instances, identity thieves don’t only want your money. They want to use your identity to protect them from the consequences of other criminal activities. By giving your information, rather than theirs, to the authorities, a criminal can escape charges and punishment for their actions, and you could wind up arrested in their place.
A record-breaking number of data breaches occurred in 2021, CNET reported. Unfortunately, this trend shows no sign of changing, with the number of data breaches reported during the first quarter of 2022 rising again, according to CNET.
According to a report by the Identity Theft Resource Center, the 1,862 data compromise incidents that occurred in 2021 reflected a 68% increase over the previous year and a 23% increase over the previous all-time high of 1,506, which was recorded in 2017.
All in all, 293,927,708 unique individuals were the victims of data breaches in 2021.
More than one-third of fraud victims reported losing money, the Insurance Information Institute reported. While many of these victims get away with sustaining smaller losses—“only” a few hundred to over a thousand dollars—more than one-fifth of identity theft victims reported losing upwards of $20,000 in 2020, according to financial services company Define Financial.
Perhaps even more worrying, the same Identity Theft Resource Center report noted two startling pieces of information that, together, show how poorly prepared many identity theft victims are to protect themselves after a data breach. First, data breach notices are decreasing in transparency. More than 600 data breach notices sent out in 2021 were missing details and “actionable information,” the Identity Theft Resource Center reported.
Second, only a tiny fraction of consumers affected by a data breach take the right steps following a breach. According to the Identity Theft Resource Center, the percentage of consumers who “take the most effective protective action after receiving a data breach notice” is below 5%.
Who should be concerned about identity theft? Just about everyone. The statistics show that you don’t have to be ultra-wealthy to be the target of a data breach. Identity thieves have even been known to steal the information of children, who have no credit history and no money of their own, to commit crimes and fraud. Further, according to Define Financial, the number of identity theft victims earning less than $20,000 per year is almost as high as that of victims earning more than $75,000 per year.
You don’t have to have exceptional credit, own your own property, or have tens of thousands of dollars in the bank for a data breach to cause you and your family serious harm. Everyone should be taking precautions to protect their data and to proactively identify potential breaches and compromises of their data.
If you learn your information has been compromised in a data breach, it’s worth speaking to a data breach class action attorney about your rights and options at no cost. Many consumers don’t realize that a data breach is a legal issue. In recent years, data breach class action lawsuits have secured hundreds of millions of dollars in compensation for people affected by data breaches.
Console & Associates, P.C., will investigate your case at no charge and offer you thorough advice about how to most effectively proceed with your case. To schedule your free consultation, complete our secure contact form and a member of our team will be in touch.