As another new college semester begins, the majority of students are concentrating on the coming year of core classes, studying, pulling all-nighters, declaring a major and partying. What's not generally on the minds of college students is protecting their identity and clean credit files. But why would college students need to worry about identity theft and their credit? It turns out, college-aged young adults are one of the most targeted groups for identity thieves and fraudsters.
According to the Consumer Sentinel Network, which is maintained by the Federal Trade Commission (FTC), identity theft is on the rise. Over 440,000 people experienced this type of theft in 2018. In fact, of all the categories of reports that the Consumer Sentinel Network tracks, identity theft came in third in 2018, just behind imposter scams and debt collection.
Why college students are vulnerable to identity theft
Because they're primarily young adults, most college students have fewer accounts and less capital at risk than older demographics, but they're not untouchable. That same Consumer Sentinel Network report shows that people ages 20 to 29 are statistically more likely to lose money to fraud than older people.
The report also shows that credit card fraud is the most common type of fraud committed. In fact, the fraudulent act of creating new credit card accounts in someone else's name skyrocketed 24% last year. Even if you're a college student who has never opened a credit card of your own, a scammer could take your identity and use it to make an account for themselves.
And this is worth worrying about since financial identity theft is the most common type of identity theft, according to Eva Velasquez, CEO at the Identity Theft Resource Center. She explains that financial identity theft happens when "a thief uses another person's identity to access their existing financial accounts (bank accounts, credit cards, lines of credit) or to open new lines of credit/loans."
And ever since credit cards moved to microchips back in 2015, identity thieves have been looking for new routes to quick cash. They're finding college students particularly susceptible. There are a number of different types of college identity theft and fraud to watch for, including:
- Student loan fraud: Student loan fraud is trending up in a big way. The Consumer Sentinel Network took in over 6,000 reports of non-federal student loan fraud, a staggering 78% increase over the previous year. And while non-federal scams are more frequent than federal ones, keep an eye out for both. Real student loans will never ask you to pay any money to help with getting the loan, and they'll never ask for your Federal Student Aid ID upfront (never give that out until you're signing your loan). The U.S. Department of Education has more information on their website to help you avoid student loan fraud.
- Job scams: Finding work you can balance with your class schedule isn't easy. But don't get desperate. Job scammers promise employment, but they make you pay a fee, usually under the guise of a placement fee or payment to cover the cost of your future credentials. And, sure, job placement companies may ask you to pay for their services, but they have actual jobs waiting. Vet any companies you're thinking about using thoroughly. You can learn more about job scams from the FTC.
- Scholarship scams: You want money to help you pay for college, of course. Unfortunately, identity thieves and scammers are all too aware of your drive to find scholarships — and all too keen to capitalize on it. Make sure each scholarship for which you apply is legitimate. We have a guide to help you avoid scholarship scams.
- Digital scams: According to Velasquez, "Hackers know that college students and young people are less averse to sharing personal information and less informed regarding their vulnerabilities. Some [identity thieves] try to strike through social media and peer-to-peer file-sharing programs.”
- Unsecured mailboxes: You probably have sensitive documents like bank statements and credit card applications (more on that next) coming through your mail. If your mailbox on campus doesn't lock, make sure you check it very regularly, so no mail gets into the wrong hands.
- Credit card applications: Now that you're college-aged, it's a perfect time to start building your credit with what might be your first credit card. And credit card companies know that, so they start sending you credit card applications. The problem? These applications usually already have some of your personal information filled in. If you're not planning to apply for a card, shred these applications when they come in. Remember, new credit card account fraud went up by 24% last year.
- Unsecured important information: Velasquez explains, "Some [college students] might be carrying their social security number with them, a laptop that's not secure, sharing multiple addresses and phone numbers, and being exposed to a lot of new people." So be careful. Don't leave financial information, any forms of personal identification, or other important documents out, ever. You and your roommate, suitemate, or housemate may be the very best of friends. Even so, you can't control the people you live with or who they'll bring into your living space. Get a secure location for all of your important documents (preferably one that locks) and get in the habit of storing everything securely there. If the document has sensitive information, but you don't necessarily want to hang onto it long-term, shred it.
What you can do to avoid college identity theft
Fortunately, you don't have to spend your years on campus looking over your shoulder. Taking a few steps now protects your identify not just while you're getting your education, but for life. So what can you do? Here are some steps you can take:
- Know your risk. Consumer Affairs' 2019 identity theft statistics show that identity theft is most common in states that border the coast. If you're moving to college, stay informed about your risk in your new location. But don't use a move to the middle of the country as an excuse to get lackadaisical, either. Identity theft happens everywhere, especially with data breaches on the rise, as the Insurance Information Institute reports.
- Password protect your computer and use antivirus software.
- Wait until you have secure WiFi to do anything that could expose your identity, like logging into your bank account.
- Go over your account statements every month. Using software like Mint or Personal Capital can make it easier to see all of your spending in one place so you can flag any suspicious activity. Just make sure you keep your login information secure.
- Check your free credit reports (your bank or budgeting software might offer this) regularly and note any changes.
- Keep your personal identification, financial information, and all other important documents in a secure location, preferably one that locks.
As an expert on the topic, Velasquez has some more tips you can employ to keep your identity safe. She says:
- "Be sure to use strong, unique passwords on all university accounts and make sure to change them regularly. Never share your password with someone, regardless of their reasoning for having it. If you ever have to give out your username, change your password as soon as you can.
- Keep your social security number in a safe place.
- Store your laptop away safely when it's not with you.
- Use your home address as your permanent address
- Use a credit card instead of a debit card.
- Steer clear of peer-to-peer (P2P) networks.
- Check your privacy settings on your social media accounts.
- Don't click on links in emails or texts until you've verified with the source that whatever information you're receiving is legitimate.
- Check your accounts for suspicious activity and be aware of who you are sharing information with."
Want to take a closer look at ways you can prevent college identity theft? Here are eight in-depth online identity protection tips.
What to do if you become a victim of identity theft while in college
You're monitoring your accounts and checking your credit. This diligent work tips you off to the fact that someone is out there using your identity. That's definitely not great news, but don't panic. Here are the steps you need to take to protect yourself moving forward:
- File a police report and report your identity theft to the FTC. They make it easy to do this online.
- Contact any of the three credit bureaus (Experian, TransUnion, or Equifax) to put a one-year fraud alert on all your accounts. This makes it harder for identity thieves to open accounts in your name. When you alert one of the credit bureaus, they're legally required to notify the other two so your fraud alert goes in place across the board.
- Freeze your credit to prevent your identity thief from opening up any other accounts in your name. Learn more about a credit freeze and why it's so important.
- Call the company where the fraud occurred. For example, if the identity thief opened up an American Express credit card in your name, call Amex and talk with them about closing or freezing the account. You can use your FTC Identity Theft Report as verification, so they know you've been the victim of identity theft.
- Review your credit reports and account statements regularly in the coming months to ensure no further fraudulent activity occurs.
- Consider safeguarding your identity with identity theft and credit monitoring.
Keep yourself safe out there, students. Learn these guidelines now and you set yourself up for a life of identity protection.