How to protect yourself from identity theft

12 minute read Published on Nov 2, 2023 by BrokerLink Communications

How to protect yourself from identity theft

Identity theft is a very real issue all across Canada. That is what makes identity theft protection so important. Continue reading to learn more about what identity theft is, the different types of identity theft out there, and how you can protect yourself from identity theft with identity theft insurance.

Identity theft defined

First off, let’s dive into the question: What is identity theft? Identity theft is when someone uses personal or sensitive data to steal from another person or pose as them, often for financial gain. Thus, two key components of identity theft are fraud and deception. Identity thieves are known for a wide range of illegal behaviour, including stealing money from the victim’s bank accounts, opening new lines of credit in their name, filing taxes in the victim’s name to steal their tax refund, using their insurance information to receive medical treatment, or giving law enforcement a fake identity following an arrest. It is believed that identity theft results in the loss of millions of dollars each year, making it a major threat to a person’s financial security.

Types of identity theft and how to identify them

There are various types of identity theft out there. It’s important to be aware of each in order to properly protect yourself against them. Below, we outline a few of the most common forms of identity theft, as well as how you can identify them:

Credit identity theft

Credit identity theft is when a criminal uses your personal information to apply for and open a credit card or line of credit under your name. They may only need your date of birth and social insurance number to do this. If you notice an unexpected change to your credit score or a new account appears on your credit report, this could be a sign that you have fallen victim to credit identity theft.

Child identity theft

Similar to credit identity theft, child identity theft is when a criminal steals the personal information of a child and applies for credit using the child’s name. Child identity theft can be more difficult to discover. In fact, it often takes years - until the child needs to apply for credit of their own, such as when they go off to university and need to take out a student loan. One way to identify whether your child has been the victim of child identity theft is if you start receiving offers for credit cards in your child’s name or calls from debt collection agencies mentioning your child’s name.

Medical identity theft

Medical identity theft is when a criminal uses your identity to pay for medical services not covered by provincial healthcare. If you notice strange claims or payments on your health insurance policy, this could be a sign of medical identity theft. Note that medical identity theft can be extremely dangerous, especially since it can result in medical histories being altered.

Criminal identity theft

Criminal identity theft is an extreme form of identity theft that involves a criminal impersonating someone else during an arrest or investigation. For example, they may give another person’s name and home address to a law enforcement officer using a fake driver’s licence or passport. If you are a victim of criminal identity theft, you may be contacted by the police and possibly even detained. You could also be rejected or fired from a job due to something being discovered in a background check.

Synthetic identity theft

Synthetic identity theft is another type of identity theft that occurs when a criminal uses a wide range of details to create a fake consumer. To do this, the criminal may create a fake social insurance number or use a child’s social security number combined with a different name and address. They then use this patchwork of information to apply for loans, credit cards, and more. Since synthetic identity theft may also target children, it can be difficult to identify until the child is older and starts applying for credit or loans of their own.

Taxpayer identity theft

Taxpayer identity theft is when someone gets a hold of your social insurance number and uses it to file a tax return on your behalf, and then steals the tax refund or tax credit. You should be able to tell if you have been the victim of taxpayer identity theft when you go to file your tax return and it shows that a return has already been filed. You may also receive an email or letter notice from the Canada Revenue Agency (CRA) with your file confirmation.

Financial account identity theft

If a criminal uses your personal information to gain access to your financial accounts, and then changes the passwords to those accounts so that you no longer have access to them, this is known as financial account identity theft. Thus, if you receive a notification from your financial institution or bank that mentions a password or other change to your account details, you should take it seriously.

How identity theft can happen

Now that you know the different forms that identity theft can take, let’s examine how this type of crime happens. There are several ways that a criminal may gain access to sensitive information about you. For example, losing your wallet or using a public Wi-Fi network can make you an easier target for thieves. Keep reading to discover some of the most common ways that identity theft happens in Canada:

Losing your wallet

A lost wallet is easily one of the most common ways that identity theft happens in Canada. Since wallets often contain a wide range of personal information and identification, including but not limited to a person’s driver’s licence and credit card, if someone picks up your wallet, they can easily steal your identity. To prevent this, avoid carrying your SIN card in your wallet and only carry the cards that are absolutely necessary.

Using a public Wi-Fi network

It may be easier for hackers to gain access to your personal information when you are using a public Wi-Fi network. Thus, it’s best to avoid using public Wi-Fi for any sort of transaction, such as online shopping, as well as to check sensitive information, like a tax refund or bank statement.

Mail theft

Another way that a criminal could steal your identity is by stealing your mail. If they gain access to your mail, they could start taking it and even have it forwarded to a different address. So if you suddenly stop receiving mail, it could be a cause for concern. Be careful about locking your mailbox after use and retrieve mail shortly after it has been delivered when possible.

Phone scams

Phone scams have become increasingly common in Canada, and they can be dangerous. For example, a criminal may phone you to tell you that you have won something, that you owe money to the CRA, or that you are in danger of being arrested. The criminal will then state that you need to provide personal information, such as your home address, banking information, or credit information, to resolve the issue. Never provide personal information over the phone.

Cyber incidents

Cyber incidents, such as hacks and data breaches, are another way that someone can gain easy access to your personal information. It is usually companies that are hacked rather than specific individuals, though both are possible. However, even if it is a company whose data is breached, if that company has your personal data stored, such as if you purchased an item from them in the past, it could still have repercussions for you.

Stolen SIM card

Some criminals steal another person’s identity by stealing their SIM card or swapping their existing SIM card out with another one. If you stop receiving calls or texts or receive a notification that a new SIM card has been activated, it could be a sign that you have fallen victim to a SIM card swap. Make sure that your mobile phone is password protected and turn on two-factor authentication for all sensitive accounts.

Tips to protect yourself from identity theft

Although identity theft is extremely common in Canada, there are several ways that you can reduce your odds of falling victim to it. From regularly reviewing your bank account statements to keeping a digital wallet instead of a physical one, continue reading for a list of tips to protect yourself from identity theft.

1. Do not share personal information on social media

First and foremost, it’s important to adopt safe practices online. Stolen digital identities are becoming increasingly common and are getting easier and easier for criminals due to the amount of information people willingly choose to put online. To keep yourself safe, one thing you can do is to avoid sharing personal information on social media. For instance, avoid sharing your full name, email address, and home address. In addition, never post photos of your driver’s licence, passport, bank account, or social insurance number. You can learn more about how social media is increasing the risk for identity theft by contacting BrokerLink.

2. Don’t log in to personal accounts when using a public Wi-Fi network

If you are using a public Wi-Fi network, or any unsecured Wi-Fi network for that matter, do yourself a favour and avoid logging into personal accounts. For example, if you’re working at a coffee shop, do not try to access your online bank account.

3. Use strong passwords and change them frequently

Speaking of online accounts, using strong passwords, turning on multi-factor authentication, and changing your passwords frequently are all good habits to get into. This probably won’t come as a surprise, but weak passwords are a common factor in identity theft cases, so take extra precautions to improve your password protection. A few tips for this include using different passwords for each account, creating unique, hard-to-guess passwords, and keeping a record of your passwords hidden.

4. Never give out personal information to unverified sources

Tip number four is never to give out personal information to unverified sources. For example, if you receive a suspicious phone call or email that asks for sensitive information, such as your home address, bank account number, credit card number, or social insurance number, do not respond. Hang up the phone or delete or archive the email. The odds are extremely high that it is a scam. If the person on the other hand is posing as your financial institution or the CRA, hang up and contact the organization directly using a verified phone number and ask them to confirm the details.

5. Review bank account statements regularly

Reviewing all bills and account statements regularly is one of the fastest ways to detect identity theft. If you frequently check your statements, you will clearly notice if there is any suspicious activity, such as strange charges or withdrawals. As soon as you find anything out of the ordinary, contact your financial institution as soon as possible.

6. Keep paper records in a secure place and shred any you no longer need

Keeping your physical forms of identification and paper records safe is just as important as your digital information. To safeguard all paper records, keep them somewhere secure in your home ideally someplace you can lock, like a filing cabinet or safe. Further, as soon as you no longer need a piece of ID or statement with sensitive information, shred it. Do not simply fold it up and place it in your recycling bin.

7. Be careful when using your credit card in public

Take extra precautions when using your credit card in public. You might be surprised to learn how easy it can be for a criminal to steal your identity simply by looking over your shoulder or using the phone on their camera to monitor you. For example, if you’re using an ATM, cover the PIN pad when entering your PIN and only take out your credit card when it’s ready to be inserted into the machine. In addition, if you’re using a digital wallet, keep the brightness on your phone dimmed and try to hold it close to your body to make it harder for others to catch a glimpse.

8. Keep an eye on your credit report

Just as you should regularly check your bank statements, you should also check your credit report. Credit reports can be accessed online from major credit bureaus like Equifax and are free of charge to obtain. By reviewing your credit report regularly, you can ensure that there is no strange activity, like new lines of credit or accounts opened. If you notice anything, report it immediately.

9. Freeze your credit as soon as you notice anything suspicious

If you check your credit report or bank statements and notice any suspicious activity, contact your credit bureau or financial institution right away and have them freeze your accounts. When your accounts are frozen, no one will be able to open a new line of credit under your name, giving you time to deal with the situation before it gets worse. It is important to note that as the account holder, you have complete control over when your accounts are frozen or unfrozen, so you can choose to unfreeze them whenever you wish.

10. Protect your social insurance number at all costs

If there is one piece of identification that is worth protecting in Canada, it’s your social insurance number. Your social insurance number (SIN) is the key to all your personal information. Thus, it’s important to take all kinds of precautions to safeguard it. Avoid carrying a physical copy with you, do not give it out unless absolutely necessary, and safely dispose of any documents that contain your SIN by shredding them.

11. Turn on alerts from your financial institution

Find out if your financial institution offers alerts or notifications when transactions are conducted on your bank account. Most do, and they can easily be linked to your phone number or email. By doing this, you will be aware the moment that your credit card is used, whether money is withdrawn from it or charged to it. The faster you identify suspicious activity, the sooner you can freeze your accounts and shut down the thief.

12. Use a digital wallet instead of a physical one

Gone are the days of physical wallets. Nowadays, everything can be stored on your smartphone, and doing so is often more secure than having a wallet full of physical cards in your bag. Link your credit and debit cards with your smartphone so that you can complete transactions virtually. When you pay for things digitally, all transactions are tokenized and encrypted, which makes them far safer.

13. Install an anti-theft device in your car

Did you know that your vehicle is a goldmine for thieves? It’s true. Car break-ins are not uncommon, and while sometimes a thief may be looking for a wad of cash or a stereo to pawn, other times they may be looking for identification that they can use to impersonate you. Thus, it’s important to keep your vehicle secure. Purchase a car with a high safety rating and one with lots of safety features. You can also install an anti-theft device in your car with GPS tracking. Further, before buying a car, do some research to determine which models of vehicles are targeted by thieves at higher rates and then avoid buying these models. Parking your car in a secure place, such as a garage, rather than on the street will also reduce your odds of theft. Finally, do not leave valuable information inside your vehicle, such as your wallet or phone that may contain personal identification or information, such as your driver’s licence, credit card, etc.

14. Buy identity theft insurance

One final way to protect yourself from identity theft is to purchase identity theft insurance. This type of insurance is designed to protect policyholders before, during, and after they fall victim to an identity theft attack. With identity theft insurance in your back pocket, you can be covered for various costs associated with identity theft incidents, like ordering new personal identification, reapplying for loans, lost income due to missed work, and more. Some insurance companies even have a 24-hour identity theft assistance hotline, as well as provide legal advice for policyholders who fall victim to identity theft. Please note that identity theft insurance is typically added as a rider or endorsement to an existing home insurance policy. Speak with a BrokerLink insurance advisor about the benefits of identity theft insurance, including how it can protect you. A BrokerLink insurance advisor can also provide you with a free identity theft insurance quote to give you an idea of how much it would cost to add this type of coverage to your property insurance policy.

Reach out to BrokerLink to learn more about identity theft in Canada and how identity theft insurance can protect you

As you can see, identity theft is a very real problem in Canada. It can be easy to fall victim to. However, it’s also easy to avoid, if you take the proper precautions. To learn more about how you can protect yourself from identity theft by purchasing identity theft insurance, contact BrokerLink today.