In 2023, our members were most affected by false applications, new account fraud, and tax fraud. Learn how these schemes work, whether they still pose a threat, and how you can stay protected in 2024 and beyond.
Throughout 2023, our identity specialists worked tirelessly to protect members like you from the ever-evolving landscape of identity theft.
Through it all, reports of fraudulent applications, new account fraud, and tax fraud continued to come in, revealing a pattern similar to previous years.
Identity thieves are known to switch up their tactics but it’s clear that these identity crimes will remain a threat in the coming year. Stay one step ahead in 2024 — and beyond.
Fraudulent applications were the most common crime
Out of all the cases our identity specialists faced last year, fraudulent applications were the most common at over 3,000 cases.
Not surprising, considering we faced a similar number of fraudulent applications in 2022.
In this scheme, fraudsters steal and use your personal information to apply for a line of credit in your name like a loan, mortgage, credit card, or auto lease. A lender must then review this credit application, which can trigger a "new inquiry" on your credit report.
If the fraudster successfully opens this new account or line of credit in your name, that’s considered new account fraud, the second most common fraud type we saw last year.
According to Vera Tolmachoff, Senior Restoration Manager at Allstate Identity Protection, criminals also frequently apply for checking and savings accounts using stolen personal information.
"It’s become easier for fraudsters to apply for fraudulent bank accounts partly due to the increased access and popularity of online banking. Sometimes, it only takes a few pieces of information to create an online profile," says Tolmachoff.
While these digital applications are convenient, they can present challenges to both financial entities and consumers.
Identifying a fraudulent inquiry on your credit report
A new inquiry on your credit report may be fraudulent if you know you haven’t...
recently applied for a line of credit like a new credit card or auto loan.
been added as an authorized user to a line of credit.
cosigned a line of credit for someone else.
New account fraud had the greatest financial impact
When you're approved for a new credit line or listed as an authorized user on an account, your credit report may show a "new account."
Opening a new credit account typically requires detailed personal information like your Social Security number or driver's license. Some accounts even require proof of income or address.
When a criminal gets access to this kind of personal information, they could open a new account on your behalf, resulting in new account fraud or "account opening fraud."
For new checking or savings accounts, it may be as simple as providing a photo ID.
While the number of new account-related crimes decreased by 18 percent from 2022 to 2023, it remained the second most frequently reported last year.
How do criminals steal the information they need to commit these crimes? Their methods of attack range from phishing to data breaches to malware.
“Phishing attacks are growing in both frequency and sophistication,” says Tolmachoff. “When in doubt, do not disclose any personal information until you are certain that the communication is from a trusted source."
Identifying new account fraud
You can tell if someone has opened an account in your name if you...
receive snail mail or email with information about an account you don’t recognize.
get a message from your bank that says someone has changed your account information like your phone number or email address.
see information about a new account you didn’t open when you review your bank statement or when you log in to your online bank.
Government and tax fraud peaked in the first half of the year
Another troubling pattern? Tax fraud spiked in the first two quarters of 2023 and was the third most reported crime for the year.
The weeks leading up to the tax filing deadline (typically mid-April for most Americans) are prime time for scammers to pose as IRS employees, attempting to get your information to file your taxes under your name.
Although we saw a decrease in this case type in the second half of the year, our identity specialists recommend staying vigilant for calls and texts from people claiming to be from the IRS all year long.
“File your taxes as soon as you receive your W2 or other relevant tax documents to prevent a criminal from filing on your behalf,” says Tolmachoff.
Since the IRS only accepts one submission per taxpayer, anyone attempting to file a tax return after you have already filed electronically or by mail will be rejected.
Identifying tax fraud
You can tell if someone has filed a tax return in your name if...
the IRS shows that you have filed more than one tax return.
you have a balance due or have had collection actions taken against you for a year you didn’t file taxes.
it's reported that you received wages from an unknown employer.
Looking ahead to identity theft in 2024
Fraudulent applications, new account fraud, and tax fraud have been common crimes in the past few years and that trend is likely to continue.
One thing’s clear: Fraudsters are eager to take advantage of your personal information through any means necessary.
But you’re not alone. While identity thieves may alter their strategies in the coming year, our commitment to keeping you informed and protected remains the same.
