Guarding Against Identity Theft: Understanding the Threats and Utilizing AI for Protection

July 19, 2023
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This paper examines the escalating frequency of identity fraud, a prevalent criminal activity. It discusses the occurrence of "Identity theft," its impact on individuals, how to detect it, and the necessary steps to take if victimized. "Identity theft" refers to the unauthorized acquisition of personal data or information with the intention of assuming one's identity for various criminal purposes, such as opening new accounts, conducting transactions, or engaging in illicit activities. It has become the fastest-growing crime worldwide due to the widespread availability of personal information, including names, addresses, driver's licenses, credit card numbers, and social security numbers, on the internet. Although progress has been made in combating identity theft, there is still much work to be done. The advancement of Artificial Intelligence (AI) has played a significant role in facilitating identity theft, as criminals employ AI and its subsets like machine learning and deep learning to efficiently process, verify, and authenticate identities.


Identity theft occurs when an individual pilfers personal data or information, exploiting it without consent or knowledge. There are various forms of identity theft, each with distinct implications. While it is impossible to completely shield oneself from identity theft, being aware of potential risks and the methods employed by fraudsters enables individuals to safeguard their data, taking prompt action if their information is compromised.

How Identity Theft Occurs

Identity theft is a broad term encompassing instances where personal information, such as Social Security numbers, is stolen and misused to establish new accounts, make unauthorized purchases, or commit fraud. Given the nature of technology and the internet, personal information is perpetually vulnerable. Without vigilant monitoring of one's credit file, victims often remain oblivious to the theft until substantial damage has been done.

  1. Data Breaches: Data breaches occur when unauthorized individuals gain access to an organization's data. Commonly stolen information includes full names, Social Security numbers, and credit card numbers. In 2018, the Identity Theft Resource Centre reported 1,244 data breaches in the U.S., compromising over 446 million records. Given the multitude of accounts individuals possess across various organizations, it is nearly impossible to secure their information completely. However, certain measures can minimize the risk.
  2. Unsecured Browsing: Safe internet browsing is crucial, particularly when accessing well-known websites. However, sharing information on unsecured websites or compromised platforms exposes sensitive data directly to potential thieves. Certain browsers may provide alerts when attempting to access risky websites.
  3. Dark Web Marketplaces: The dark web serves as a repository for stolen personally identifying information. Instead of using the acquired information themselves, hackers often choose to sell it to individuals with malicious intentions. Accessing the dark web requires specialized software to ensure anonymity, providing fraudsters a haven. When personal information becomes available on dark web marketplaces without the victim's knowledge, anyone can purchase it, further endangering their identity.
  4. Malware Activity: Malware refers to harmful programs or files that can compromise a user's computer. Examples include computer viruses, worms, Trojan horses, and spyware. These programs can steal data, encrypt or delete sensitive information, hijack core computing functions, and monitor user activity without consent or knowledge.
  5. Credit Card Theft: Credit card theft or fraud is a simple form of identity theft. If a thief gains access to a credit card, they can make unauthorized purchases. Credit card theft often occurs through data breaches, physical theft, credit card skimming, or compromised online retail accounts where card information is stored.
  6. Mail Theft: Identity thieves have long targeted mail to find documents containing personal information, such as bank and credit card statements. Even discarded mail poses a risk, necessitating the proper shredding of documents that may contain personal data.
  7. Phishing and Spam Attacks: Phishing attacks employ email or malicious websites to collect personal and financial information or infect machines with malware and viruses. Scammers may also use text messages and other electronic forms of communication to steal sensitive information. These deceptive messages often appear to originate from reputable sources, requesting victims to divulge personal information. To mitigate spam, enabling filters on email programs can prove effective, although checking junk folders is advisable to ensure proper filter functionality.
  8. Wi-Fi Hacking: Public Wi-Fi networks, such as those in airports or coffee shops, can be exploited by hackers to steal data from individuals using computers or phones. Many Wi-Fi networks remain vulnerable to security breaches, making it essential for individuals to secure their wireless networks with passwords to protect themselves.
  9. Mobile Phone Theft: Smartphones are prime targets for identity thieves, especially if access to apps and personal information is not properly secured. Stolen or unlocked phones provide thieves with access to a wealth of sensitive information found in apps, emails, text messages, and more. It is crucial to employ secure passcodes, biometric screening, and avoid storing passwords in plain text on phones.
  10. Card Skimming: Thieves employ skimming devices to capture information from card readers, such as those found at ATMs or fuel pumps. These devices mimic the appearance of genuine card readers and collect data from the magnetic stripe when a card is swiped. Subsequently, criminals use this information for purchases or other illicit activities.

The ramifications of identity theft vary depending on the type of theft and how criminals exploit the stolen information. Immediate financial losses, credit damage, and emotional distress are common consequences. Resolving identity theft can take anywhere from a day to several months or even years. Victims may face challenges such as late payments, medical bills, IRS penalties, and compromised accounts, resulting in a loss of privacy.

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How to Check for Identity Theft

While it is impossible to completely avoid the risk of identity theft, proactive measures can help detect potential fraud before it escalates. Regularly monitoring credit reports is crucial. Free reports are available annually through, and additional summaries can be accessed through free or paid credit monitoring services. Checking for trade-lines that were not opened and monitoring credit scores for sudden unexplained drops can serve as indicators of potential identity theft.

There are other signs that suggest one's identity may have been compromised. These include not receiving important mail, receiving bills or credit card statements for unauthorized transactions, being denied credit despite a good credit rating, unauthorized bank transactions, being notified of personal information compromise in a data breach, denial of electronic tax filings, receiving unrequested authentication messages for unknown accounts, receiving notifications of unauthorized access to personal accounts, and receiving bills or explanations of benefits for healthcare services not sought.

What to Do if You Think You're a Victim

If one suspects they have fallen victim to identity theft, it is crucial to limit potential damage. Immediately contact the card issuer and bank if credit or debit card theft is involved, as some banks offer the option to lock accounts via mobile apps until fraud is reported. Double-check credit reports with the three credit bureaus (Experian, TransUnion, and Equifax) to identify any unusual activity and seek assistance in dealing with identity theft. In case of discrepancies, consider locking or freezing credit or setting a fraud alert, which informs lenders of the identity theft, prompting them to take additional verification measures. Reporting the crime to local law enforcement agencies is advisable, as they can file reports and remain vigilant for any suspicious activity linked to one's name or address. Prior to reporting the crime, filing a report with the Federal Trade Commission is recommended. The agency provides guidance, necessary paperwork, and instructions on dealing with police reports, as well as assistance in disputing fraudulent charges. Recovering from identity theft is a time-consuming and challenging process, involving forms, interactions with agencies and businesses, and protecting one's privacy.

Other Types of Identity Theft

There are less common types of identity theft that individuals should be aware of:

  1. Child ID Theft: Children's identities are highly vulnerable and may remain undetected for several years. By the time they reach adulthood, significant damage may have already occurred.
  2. Tax ID Theft: Thieves often use stolen Social Security numbers to file fraudulent tax returns with the IRS or state governments.
  3. Medical ID Theft: Fraudsters may steal Medicare IDs or health insurance member numbers to obtain medical services, leading to fraudulent billing.
  4. Senior ID Theft: Seniors are frequently targeted due to their frequent interactions with medical professionals or caregivers who have access to personal and financial information.
  5. Social ID Theft: Personal information displayed on social media platforms, including names, photos, and other details, can be used to create fake accounts.

Using AI to Fight Identity Fraud

Identity fraud is a rapidly growing problem. In 2017, a record 16.7 million US adults experienced identity fraud, an 8% increase from the previous year (Javelin's 2018 Identity Fraud study). Fraudulent transactions, data breaches, and identity theft instances continue to rise as hackers and fraudsters become more sophisticated. AI-powered ID scanning solutions offer various levels of security, from scanning barcode information to conducting forensic and biometric tests to detect forged IDs.


Identity theft exists in numerous forms, necessitating vigilance in monitoring personal data and promptly addressing any discrepancies. Many businesses provide products and services to aid individuals in safeguarding their information, monitoring public and private records (such as credit reports), and receiving alerts for transactions and status changes. Government agencies and nonprofit organizations also offer assistance and resources to avoid, remedy, and report identity theft incidents. Thieves primarily use computer technology to acquire personal information, searching through stolen or discarded computers' hard drives and employing malware to infect computers. Additionally, they browse social networking sites and employ deceptive emails and text messages to perpetrate identity theft.

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