The effects of identity theft can go far beyond financial crises. Learn about the costs of becoming a victim of this potentially ruinous crime.
Many people mistakenly think that identity theft is, at best, simple to resolve, and at worst, a minor inconvenience. What most people don’t know is that unlike traditional theft wherein you lose something tangible and can account for the value of the lost item right away, a stolen identity can possibly leave you with long-lasting effects ranging from a ruined credit rating, convoluted medical and health records, and legal problems, not to mention the emotional toll it takes on you to try and clear your name.
Financial Effects of ID Theft
One of the first signs that you have become a victim of identity theft is when money is stolen from your bank account. Maybe you try to withdraw money from an ATM only to find out that a large chunk of your hard-earned cash has recently been taken out. Or maybe you try to pay for your purchases with your credit card and the cashier informs you that your card has been declined, even when you are certain that you still had more than enough funds to cover the payment. This kind of issue is usually dealt with by banks and credit card companies rather swiftly as soon as you report the identity theft since they have insurance policies in place and can refund the money you lost.
However, another scenario would be if the perpetrator opens up a credit card (or two, or three!) in your name – or your child’s – and maxes them out with no intention of paying for them leaving you in debt. You wouldn’t discover the theft until creditors start hounding you, or until your child is turned down for college scholarship, and by then the damage has been done.
According to the U.S. Department of Justice and the Javelin Strategy & Research, as of April 2015, the average financial loss per identity theft incident amounts to $5,130. In addition, the Federal Trade Commission conducted a survey that showed that 8.3 million Americans were victims of identity theft in 2005, and that the median time spent by the victims resolving their problems was four hours. However, ten percent of the victims spent at least 55 hours resolving issues, and half of those spent at least 130 hours. Most of the work done by victims to recover their identity and repair the damages caused by the theft include keeping track of creditors, replying to letters, making phone calls, working with law enforcement agencies and working with credit bureaus.
Your credit rating is also at stake. When a thief opens a new line of credit and runs up a significant amount of debt in your name and the debt remains unpaid, your credit score will plummet. As a result, your loan applications will be denied, your insurance premiums will skyrocket, and you can get turned down for a job.
A fraudster who gets ahold of your personal information can use your medical benefits in order to obtain medication and receive medical treatments, quickly using up your available benefits in the process. You would be left with one of two options: pay for your treatments with cash, or delay getting the medical attention that you need. Another dangerous implication of medical ID theft would be if your medical records get mixed up with another person’s – any medical mistakes made, such as a misdiagnosis or errors in prescriptions, can be potentially lethal.
If someone else uses your information to obtain prescriptions from a pharmacy, you might not be able to fill your own needed prescriptions, especially if the thief’s medications conflicted with those of yours since – meaning taking the medications together would be life-threatening.
Disentangling your legitimate medical records with a fraudster’s can be time-consuming and costly, and can cause delays to obtaining your much-needed treatment and medications. The Ponemon Institute 2013 Survey on Medical Identity Theft revealed that 36 percent of the respondents paid an average of $18,660 in out-of-pocket costs for identity protection, credit reporting and legal counsel; medical services and medications because of lapse in healthcare coverage; and, reimbursements to healthcare providers to pay for services to imposters. The survey also stated that the amount of time it takes to deal with the theft may discourage victims from trying to resolve it and to prevent further incidents. 36 percent of the respondents stated that trying to resolve the crime consumed almost a year or more of their lives, while 48 percent of the respondents said that the crime remains unresolved.
Legal Problems Caused by Identity Theft
While less common than financial and medical effects, identity theft can lead to complications with the law for the victim. There have been cases in which criminals used stolen identity and had their crimes pinned on the oblivious identity theft victim. If a thief who has stolen your identity is arrested for a crime and provides your stolen identification, then you will be the criminal. The police will come looking for you once the real lawbreaker fails to show up for a court appearance or is suspected of further wrongdoing.
You will be faced with having to prove your innocence and that furthermore, you have been a victim of identity theft. Some victims of ID theft have found themselves in utterly embarrassing and devastating situations, being handcuffed and in the back of a police car. Some have landed and spent a few days in jail for crimes they didn’t commit. The fallout from stolen identification used in crimes do not end there. The victims face nightmarish months or years of effort to get the problem cleared up and the records expunged.
The emotional effects of identity theft on victims are akin to those of other crimes’, such as a home invasion or assault. For victims of this highly intrusive crime the feeling of vulnerability, of having been violated, takes a long time – if at all – to go away, therefore leading to a loss of trust, and sense of personal security. If the theft was committed by someone you knew, you could feel betrayed and have trouble trusting anyone, even those close to you, ever again. This betrayal by a family member or a friend can hinder people from reporting the crime to law enforcement in an effort to protect their loved ones. There’s often a pressure to keep such incidents within the family, leaving the victim to suffer alone and try to recover on their own.
Still, other victims are not able to determine who stole their identities, leading them to feel exposed and that they’ve lost all sense of control. They go through prolonged periods of helplessness and hopelessness, always second guessing their decisions, such as when it comes to swiping their credit cards or presenting identification to others.
Many people whose identities have been stolen feel guilty and blame themselves for not being more careful about their personal information. In some cases, there are those who feel embarrassed and blame themselves for having had their identities stolen in the first place, so much so that they feel hesitant to seek help from authorities, believing that they brought the crime on themselves.
It can take years for victims to feel safe again, and often only through professional help.