Identity theft can wreak havoc on your financial life. According to a 2018 Harris Poll, 48% of Americans think it's at least somewhat likely that they'll experience a financial loss associated with identity theft in the next year.

"Consumer information is a commodity," says Ed Bides, information security officer at Florida Capital Bank in Jacksonville. "Hackers usually are not the ones that use your stolen information; they're the brokers and sell for profit."

Data breaches have played a significant part in the growth in identity theft. There were 1,579 data breaches exposing nearly 179 million personal financial records in 2017, according to the Identity Theft Resource Center. The number of data breaches increased by 44% over 2016's figures, while the number of records affected rose an astonishing 389%.

Recovering from identity theft after the fact can be difficult. Learn how to recognize the warning signs to minimize the financial fallout. (See also: Identity Theft: How to Avoid It.)

How to Tell If You're a Victim of Identity Theft

There are some obvious – and not so obvious – indications that an identity thief is at work.

"Some signs that your identity has possibly been compromised include withdrawals from your bank account that you cannot explain, unfamiliar accounts or charges on your credit report, debt collectors calling you about debts in your name that aren't yours or lack of bills or other mail," says Laura H. Stover, CEO investment advisor at LS Wealth Management, LLC in Bryan, Ohio. Missing mail could mean that an identity thief is redirecting your bank account or credit card statements to keep you from noticing any suspicious financial activity.

Identity theft can also become apparent at tax time. "You may realize your identity has been stolen if the Internal Revenue Service notifies you that more than one tax return was filed in your name or you have income from an employer you don't work for," Stover says. Receiving an IRS notification for unpaid taxes is another sign that your personal information may have been compromised.

Trevor Buxton, fraud awareness and communications manager with The PNC Financial Services Group, Inc.'s (PNC) Enterprise Fraud Group, notes that there are other subtler clues that your identity has been stolen. Those include:

  • Receiving bills for products or services you didn't order or receive
  • Being declined for government benefits because benefits are already being paid to another account using your Social Security number

In addition, Bides says that an increase in inquiries on your credit report could suggest that someone is trying to use your information to open credit accounts. Your online accounts can also tip you off to identity theft, if "for example, you logged into your email five times yesterday, but the history shows you logged in 35 times."

The same is true of your credit card accounts. If logins have been locked, passwords changed or your email, mailing address or phone number updated, that could all point to potential identity theft. (For more, read: How to Recover From Identity Theft.)

Identity Thieves Can Also Target Your Kids

It's important to remember that it's not just your personal information that can be compromised. Your child's Social Security number or other personal details could also be at risk for identity theft.

"Hackers will try to use your child’s Social Security number to open accounts because it's clear and clean because of age," Bides warns. According to a study from Javelin Strategy & Research, more than one million children under age 18 were targeted for identity theft in 2017, resulting in $2.6 billion in losses and more than $540 million in out-of-pocket costs to families. The problem with detecting it is that you or your child may not realize it has happened until the child grows up and tries to apply for credit as an adult. (See also: Protect Your Kids Against Identity Theft.)

Like adult identity theft, warning signs of child identity theft include:

  • Your child being turned down for government benefits because benefits are already being paid to an account under his or her Social Security number
  • Receiving IRS notices that your child has an outstanding tax bill
  • Debt collection calls or notices for your child
  • Receiving pre-approved offers for credit cards or loans addressed to your child

Each of the three major credit bureaus – Equifax, Experian and TransUnion – allow parents to check for a credit report in their child's name. It's a bit more complicated than pulling your own credit report, but it's worth the trouble if you suspect someone is using your child's information fraudulently. You could also consider a credit freeze as a pre-emptive measure. (For more, see: Now You Can Freeze Your Credit File for Free.)

Use Tech to Detect Identity Theft

The best way to spot identity theft is to be vigilant about monitoring all your financial and personal accounts, including email. One of the easiest ways to do that is by taking advantage of credit monitoring services.

"These companies offer fraud and identity protection and some even include personal information, Social Security, address change and court records monitoring," Stover says. Some services are free, while others require a free, but "it could save you money in the future if you were to become a victim of identity theft."

Setting up text or email alerts with your bank and credit card companies is another simple way to detect fraud. You can set up alerts to notify you when:

  • A new debit or credit transaction posts to your bank account
  • A new Automated Clearing House (ACH) or wire transfer is initiated from your bank account
  • Your banking or credit card passwords are updated, or a failed login attempt is made
  • New purchases or cash advances post to your credit card accounts

"Such alerts can help to verify that you, the account owner and not a hacker, are requesting the changes," Buxton says. You can also set up a 90-day alert on your credit file, requiring credit agencies to notify you any time someone attempts to get credit in your name.

Bides advises that, if you regularly use credit for purchases, you should consider a credit card that will allow you to freeze or unfreeze your account at your discretion. That way, if your card is lost or stolen, you can block any new purchases from being made without your authorization.

Finally, two-factor authentication can also be helpful in spotting and even preventing identity theft. Two-factor authentication requires you to enter a special code to login to your accounts, in addition to your user name and password. (See also: Banking: Online and Mobile Banking Precautions and Safeguards.)

The Bottom Line

In an age when personal and financial information is increasingly readily available online, identity theft is a very real threat. Awareness of what it can look like if and when it happens to you is crucial. The sooner you're able to spot identity theft, the sooner you can act to stop identity thieves and protect your personal and financial information. (For additional reading, check out: Identity Theft: What to Do, Who to Call.)