Millennials may be unaware of the negative consequences identity theft brings
Nov 04, 2013 Dave King
Identity theft is a crime that can impact people in numerous ways, perhaps the most significant being damage to consumer credit scores. In a perfect world, Americans would be able to avoid identity theft altogether, but that typically isn't the case.
For this reason, short term lenders need to be one of the first lines of defense, with strong ID verification procedures to help ensure applicants aren't using stolen names.
Additionally, it is important that consumers understand the seriousness of this type of crime, but it appears as though younger Americans don't get it just yet. According to a survey conducted by TunnelBear, 33 percent of Millennials would rather be the victim of identity theft than reveal their Facebook history - more than double all other demographic groups combined.
What can identity theft do to consumers?
With younger Americans more willing to be a victim of identity theft than revealing their Facebook history, it is clear that there needs to be more education on the crime. Financial institutions, such as banks and short term lenders, can take the lead to inform clients about the dangers of having personal information compromised.
Barry Paperno, community manager for Credit.com, said identity theft can do major damage to a person's credit score that may take a long time to be repaired.
"Long term, there should be no damage to your credit from ID theft," he said. "But, in the short run, you could lose more than 100 points from your score and not reclaim all of them until after the fraudulent credit information is removed from your credit report, which could take weeks, and in some complex cases even months."
Simple steps to avoid identity theft
Short term lenders and other financial institutions might also want to consider providing clients with a few tips on how to prevent identity theft from happening in the first place, including:
- Buy a shredder: The option is available to receive bills and bank statements online but many people still choose to have these documents mailed. Consumers who opt for mailed statements should invest in a shredder, as identity thieves attempt to search through trash for personal information, according to LearnVest.
- Monitor accounts and credit reports: People need to keep an eye on their accounts via online banking to check for any unrecognized charges. It is also recommended to pull a copy of a credit report a few times a year to see if there are any fraudulent accounts.