Identity Theft: A Growing Threat to Your Bank Account
Vivian Thornton, a small business owner from Charlotte, NC, experienced a jarring financial shock when she discovered an unauthorized debit charge for over $2,000 on her bank account. The charge, for concert tickets she never purchased, plunged her account into a negative balance. Thornton shared her experience, recounting that she had only used her debit card once that day, to fill her gas tank. “I later went to deposit some checks online and noticed that unfamiliar charge… it was a really huge shock,” she explained. This unfortunate incident, which Thornton also described in a TikTok video, highlights the very real threat of identity theft, a crime that can drain your checking or savings account.
Identity theft is a pervasive issue, consistently ranking as one of the most reported types of financial fraud to the Federal Trade Commission (FTC). In 2023, the FTC received over 1 million reports of identity theft, underscoring the scale of this problem.
The FTC has designated January 27-31, 2025, as Identity Theft Awareness Week, an opportunity for consumers to educate themselves about this crime and the steps they can take to protect their assets.
What is Identity Theft?
Identity theft occurs when someone gains unauthorized access to your personal information and uses it without your consent. This sensitive data includes your name, address, Social Security number, bank account details, and credit card information. Fraudsters use this information to make unauthorized purchases, receive money, or even obtain medical care. The primary motive behind identity theft is almost always financial gain.
Joannie Wei, Assistant Director, Midwest Region, FTC, notes that the first indication of becoming a victim of identity theft might be unauthorized withdrawals or debits from a bank account or unusual charges on a credit card.
How Identity Theft Occurs
Safeguarding personal information is increasingly challenging due to the numerous ways criminals access data. Some of the most common methods thieves use include:
- Your Wallet: Despite the prevalence of digital theft, some criminals still target wallets for credit cards, ATM cards, and cash.
- Your Trash: Discarded financial statements can be intercepted by fraudsters who engage in “dumpster diving.”
- ATMs, Cash Registers, and Gas Pumps: Skimming devices installed at these locations can record your card number and PIN.
- Public Wi-Fi: Transmitting financial information over public Wi-Fi networks renders it vulnerable to interception.
- Phishing: Scammers often impersonate banks and request passwords or other sensitive data via email. A similar tactic, known as “smishing,” utilizes text messages.
- Social Engineering: Criminals may attempt to build trust to trick you into divulging sensitive data, such as bank account numbers or passwords.
How Identity Theft Affects Your Bank Account
Fraudsters exploit stolen information to drain existing bank accounts or open new accounts in the victim’s name.
Victims of identity theft, like Vivian Thornton, often face a period of financial recovery while the bank investigates the fraudulent activity. In Thornton’s case, it took around two weeks for her credit union to investigate and reverse the unauthorized charges.
Criminals may also open bank accounts in your name to write bad checks, evade taxes, launder money, or stash funds obtained through illicit activities. If an account is opened fraudulently using your information, it can hinder you from opening future bank accounts or getting credit.
“When somebody has your Social Security number and your other identifying information, when they open a bank account in your name, that’s an indication they’re using your information in other nefarious ways as well,” explains the FTC’s Wei. “It’s possible they’ve filed a tax return or unemployment benefits in your name.”
Ways to Protect Your Bank Account from Identity Theft
Implementing these simple steps can help safeguard your money and prevent it from falling into the wrong hands:
- Safeguard Debit Cards: Keep infrequently used ATM and debit cards secure and separate from those you use regularly. The same logic applies to credit cards and your Social Security card.
- Limit Debit Card Use: Recognize that recovering stolen funds from bank accounts can take time during a bank’s investigation. Credit cards often provide stronger fraud protection.
- Use Multifactor Authentication: Enable multifactor authentication, where your bank sends a unique code via text or email each time you log in, adding a second layer of security.
- Exercise Caution: Never respond to calls, texts, or emails asking for bank account information if you didn’t initiate the contact. Wei advises, “A cardinal rule that would prevent so much identity theft and fraud is just don’t give out personal or financial information to anyone in response to a request you did not expect.” Even if your bank’s name appears on caller ID, it could be a scam.
- Avoid Suspicious Links: Refrain from clicking on links provided in unsolicited emails, particularly if they appear to come from your bank. Instead, access your account independently, and be wary of offers that seem too good to be true.
- Set Up Alerts: Enroll in bank account alerts for transactions over a certain amount. An immediate notification of a suspicious charge might be a sign of identity theft.
- Consider Extra Security Measures: Some banks offer verbal passwords to authorize transactions, either in person or by phone. Take advantage of these features to enhance your account security.
What to Do if You Suspect Identity Theft
If you suspect you’ve become a victim of identity theft, take immediate action:
- Freeze Debit Card: Immediately freeze any debit cards linked to the affected account using the bank’s mobile app or by contacting your bank.
- Report to Your Bank: Contact your bank’s fraud department as soon as possible to report unauthorized activity. They will likely initiate an investigation and freeze further transfers and withdrawals.
- Change Credentials: Create a new, strong password and ensure multifactor authentication is active. Also change your security questions.
- Freeze Credit Reports: Set up a security freeze with all three major credit bureaus to limit access to your credit file and prevent fraudsters from opening new accounts in your name.
- Monitor Credit Reports: Regularly check your credit reports for signs of suspicious activity. This may be very important if it is believed that someone has also accessed your bank account.
- File an FTC Report: Report the identity theft to the FTC. You will receive a recovery plan to guide you through the next steps, track your progress, and pre-fill forms and letters.
Eva Velazquez, CEO of the nonprofit Identity Theft Resource Center (ITRC), emphasizes the importance of regularly monitoring your bank account transactions. “It’s a lot easier to remedy these things when we catch them early. We encourage people to look often.”
The Bottom Line
Identity theft, including the unauthorized taking of funds from your account, represents a significant danger. You must be vigilant in safeguarding your personal information, frequently monitoring accounts, and being ready to recognize and report any potential fraudulent activities.
The most critical responses to identity theft involve quick action, transparency, and the use of resources that provide help.
“When it comes to identity theft, a lot of times people feel ashamed or embarrassed about what they didn’t know,” says ITRC’s Velazquez. “I would encourage people to let go of that and ask for help. The message for people is to reach out to the free and trusted resources available to them.”
