Identity theft can be extremely costly and can drag your credit score into the mud. The real cost also includes up to hundreds of hours of your time to recover.
Identity theft can be a massive headache — and the cost of identity theft is over $1k for the average incident. The crime causes victims a significant amount of money in most cases and hours and hours to clean up the mess. This is a dive into the big question of how much does identity theft cost.
Identity theft can be so bad that the harm could cling to victims for years via their credit score. In most cases, it’s possible to get your credit back on track. But, you better be willing to put in serious effort to do so if you fall victim to identity theft.
We are taking a deep dive into how much identity theft costs, including how long it takes on average to recover from identity theft.
To start with, it would be best to talk about what exactly identity theft is. In short, identity theft occurs when someone steals your information to use for their own betterment and commits fraud.
The most common forms are when thieves use your personal information such as a Social Security number to open credit cards, file taxes, commit a crime, or even get medical services under your name. Things can get ugly fast if you don’t catch the identity theft quickly. Bills can go unpaid and debts can rack up on an unsuspecting victim’s credit history.
So, how much does identity theft cost?
The actual cost of identity theft on a case-by-case basis varies widely depending on what was stolen, what sort of scam occurred and how long it went undetected.
The total cost of identity theft in 2020 was $56 billion, the highest number in recorded history. Identity fraud scams cost victims $43 billion and traditional identity fraud cost victims $13 billion, according to a 2021 study by Javelin Strategy & Research.
The difference between a traditional fraud and a scam is that in the case of a scam, victims can pinpoint the moment where they were tricked by a criminal whether it be by text, email or phone. These are typically phishing scams.
In traditional identity fraud cases, the criminals steal personal information at the institution level. An example would be in a data breach.
Identity theft cases jumped in 2020, thanks in part to the pandemic, according to experts. In 2019, the cost of identity fraud was $16.9 billion, according to the Javelin report. In 2019, 5.1% of consumers were impacted by identity fraud or theft.
One in three adults in the United States has experienced identity theft, according to a report from Proofpoint.
How long does it take to recover from identity theft?
The biggest factor in how long it will take to recover from identity theft is how long it took a victim to realize they had been affected.
It takes victims, on average, six months and approximately 200 hours of work to record from identity theft, according to a report from the SANS Institute. If the monetary damages alone aren’t convincing enough, the time needed to recover surely will encourage most people to be proactive in preventing identity theft.
It’s not only time and money that are stolen. It’s also mental health. According to the Identity Theft Resource Center, 77% of victims reported increased levels of stress and 55% reported fatigue or decreased energy.
Identity theft can leave victims feeling helpless and decrease the peace of mind. The study by the Identity Theft Resource Center went further and stated that victims reported trust issues with friends and family and issues with employers and schools.
In a study by the Identity Theft Center:
- 84% of victims of identity theft reported issues with their sleep habits.
- 77% reported increased levels of stress.
- 64% had problems with concentration
- 56% have persistent aches, pains, headaches or cramps.
Clearly, identity theft is painful in many more ways than just financial! That’s why is so important for you to act immediately and know what to do when someone steals your SSN.
How to prevent identity theft
There are ways one can avoid identity theft, but the best way is to consistently check your bank accounts and other accounts for any signs of shady activity.
Here are a number of other ways to prevent identity theft:
- Be aware when using public Wi-Fi. Scammers can easily trick you into connecting to a free public Wi-Fi connection and steal your passwords and other personal information.
- Use strong passwords. This should be self-explanatory, but one of the best protections against identity theft is a strong password and two-factor authentication.
- Be aware of social engineering scams, which is why you should know how to avoid phishing scams.
- Dispose of important documents after you no longer need them. You should shred anything that potential thieves could use to steal your identity, such as bank statements, before throwing them in the trash.
- Watch out for recent data breaches. Data breaches can result in your personal data leaking out into the internet without you even knowing it. This can be extremely dangerous, especially when it is common that victims of these data breaches often don’t hear about them for months or even years after the fact.
A proactive tool for preventing yourself from falling victim to the next data breach is Privacy Bee’s premium service, which sends deletion requests on your behalf to companies demanding they delete your personal data from their servers.
RELATED: The real cost of a data breach