Identity theft usually begins when your personal data is exposed through hacking, phishing, data breaches, or other means. Next, a criminal makes use of your exposed information to do something illegal, such as opening an account in your name. Some forms of identity theft can take years to detect and hundreds of hours to untangle — but with Allstate Identity Protection, you’ll never have to manage the recovery process alone.
Millions of Americans are affected by identity theft every year. In fact, according to Javelin Strategy & Research, it’s one of the fastest growing crimes in the country.
Here at Allstate Identity Protection, it’s our mission to help you stay one step ahead.
Stories from our members show that identity theft cases come in all shapes and sizes. We’ve seen fraudsters use stolen personal information to open new financial accounts or even obtain government benefits in someone else’s name.
Still, the process of identity theft and recovery usually follows the same three-step blueprint.
Here’s what you need to know about how identity theft often unfolds — so you can spot the signs as quickly as possible.
Step 1: The acquisition of personal data
The first step of identity theft is when thieves steal your personal data.
This can happen through a variety of means, including hacking, fraud and trickery, phishing scams, mail theft, and data breaches.
Data breaches are among the most common ways identity thieves collect personal data. According to the Identity Theft Resource Center's 2021 Data Breach Report, the number of reported data breaches jumped 68 percent in 2021 — marking an all-time high record.
The majority of Americans have now experienced a data breach. But it’s important to know that even if your personal information — including your Social Security number, address, or other details — has been exposed, it doesn’t constitute identity theft.
Thieves have merely stolen your personal data; they haven’t made use of it. Identity theft is what happens next.
Step 2: The use of the stolen identity
The next step of identity theft occurs when thieves begin using the personal data they’ve collected.
This can result in a series of trials where thieves test the validity of the stolen information. If a scammer is able to successfully use your information for their financial gain, it probably means you’re experiencing identity theft.
Some of the most common ways identity thieves use personal data include:
Opening new accounts
Taking over existing accounts
Selling the identity on the black market
Acquiring additional identity-related documents, like health insurance cards and passports
Filing fraudulent tax returns
Committing insurance fraud
Renting and stealing rental cars
Step 3: The discovery and correction of identity theft
Some forms of identity theft can be caught right away. For example, victims are likely to notice an unfamiliar account on their credit report.
But unfortunately, other types of fraud can go undiscovered for years. When identity thieves target children, it can fly under the radar because kids don’t typically check their credit reports.
The longer it takes to catch identity theft, the harder it might be to untangle.
The correction process can be a lengthy one. However, the good news is you don’t have to go through it alone.
If you’re an Allstate Identity Protection member, we’ll be by your side throughout the whole process. Our identity specialists are on call 24/7 to help you through any issue you’re experiencing.
Plus, our free educational resources — like this article — are designed to help people better protect themselves from fraud, whether they're covered by our identity protection plans or not.