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The letter I got in the mail came out of the blue from a bank I’ve never done business with. I was informed they had received my application to open a Frontier Airlines credit card, but were declining the request.
The trouble was I hadn’t applied for any credit cards (I also never fly Frontier). Cue my internal panic.
After calling the bank and checking my credit reports, I discovered the truth: A fraudster, presumably with my Social Security number and other personal information from a data breach, had tried to open not one but three different airline credit cards in my name.
I quickly froze my credit with all three credit bureaus (Equifax, Experian, and TransUnion). This prevents anyone from opening new credit card accounts or taking out loans in my name. I also changed all of my account passwords and ensured there were no unauthorized transactions on any of my financial accounts.
Financial catastrophe averted.
But for millions of Americans who fall victim to identity theft each year, the outcome isn’t as rosy.
In 2024, U.S. consumers lost more than $12.5 billion to fraud in 2024, up 25% over the previous year, according to data from the Federal Trade Commission. Additionally, there were more than 1.1 million reports of identity theft made to the FTC.
Experts say these figures are likely much higher, though, because many people who are victims of identity theft never come forward to report it.
Identity theft happens when a criminal steals your personal or financial information and uses it to commit financial crimes in your name.
The two most common types of identity-theft-related financial fraud involve new account fraud and unauthorized account access, said Blythe Figurelle, vice president of member fraud education, experience, and advocacy with USAA Federal Savings Bank.
With new account fraud, criminals use stolen identity information to open new credit cards, loans, or deposit accounts. Oftentimes, victims don’t find out about the fraud until they check their credit reports and find inquiries or accounts they don’t recognize. Plus, if you get a notice about being denied a loan or collection actions, chances are it’s new account fraud, Figurelle said.
For unauthorized account access, fraudsters use your credentials — account usernames, passwords, or authentication codes — to gain access to existing bank or credit card accounts. From there, criminals have a direct line to your money to make unauthorized withdrawals or transfers, she added.
“Identity theft affects consumers across all ages and demographics — no one is immune,” Figurelle said.
There’s no sure-fire way to avoid falling prey to identity theft, but being proactive and taking some preventative measures can help reduce your chances, said Danny Karon, a veteran attorney and founder of “Your Lovable Lawyer,” a legal wellness company. Here are some steps he recommends.
Use complex, alphanumeric passwords, and change your chosen password if a site says it’s weak. Also, don’t reuse the same password across multiple sites, otherwise, if thieves crack it, they’ll have access to your accounts. Don’t choose obvious security questions (your mother’s maiden name, where you grew up, etc.); those details are often easy to discover or guess.
Enabling 2FA on financial accounts may feel like an annoying extra step, but it’s worth it, Karon said. This can be the single line of defense that keeps fraudsters out of your financial accounts.
When sites or browsers prompt you to save your password, don’t do it. Auto-populating passwords can make it easier for scammers if your device or account is compromised. Instead, consider paying for a secure password generator and storage service.
Keeping your security software and checks up to date when prompted is essential. Why? Those updates often patch security holes that scammers love to exploit.
Avoid giving out personal or financial information if someone asks via email, text, phone calls, or social media. Check the sender’s email domain; scam messages often have a non-official address or a minor typo that trick their victims. Always double-check requests by going to the company’s official website and contacting them from there.
If you don’t plan on applying for a loan or credit card anytime soon, freeze your credit with all three bureaus: Equifax, Experian, and TransUnion (as I did). Proactively doing this before potential fraudsters strike offers an added layer of protection. Plus, you can always temporarily thaw or unfreeze your credit when needed, Karon noted.
“It keeps people from opening accounts in your name and running up purchases on those accounts that aren't even yours,” Karon said.
If you fall victim to identity theft, don’t waste any time, Figurelle said. “Early reporting can significantly reduce financial impact and make recovery easier,” she emphasized.
Take these immediate steps if you suspect identity theft:
