Protecting Your Finances from Cyber Threats

Kurt Knutsson warns about sophisticated AI scams as cybercrime losses hit nearly $21 billion last year. The FBI data shows investment fraud alone cost victims $8.65 billion. To help families secure their finances, Knutsson offers a free live class on safeguarding money and accounts.

Understanding Identity Theft

Many assume identity theft involves accessing existing bank accounts or credit cards. However, another form involves criminals using personal data like your name, Social Security number, or birthdate to open new accounts. This type is harder to detect.

Javelin Strategy & Research reported a 31% increase in new-account fraud victims in 2025, rising from 4.2 million to 5.4 million. Fraudulent accounts may include credit cards sent to unfamiliar addresses or phone and utility accounts with unknown companies. This makes detection challenging since existing accounts remain untouched, leaving you unaware until unexpected bills, credit checks, or debt collector calls occur.

How New-Account Fraud Works

Fraud involving existing accounts often appears through unusual charges or bank alerts. New-account fraud is subtler. Criminals use enough of your personal information to apply for new accounts and redirect communications to addresses they control. Indicators include hard inquiries on credit reports or mail for accounts you never signed up for. Not all new accounts appear on credit reports, especially phone, utility, or buy-now-pay-later activities.

Growth of New-Account Fraud

More stolen personal information is available due to data breaches, exposing details used to impersonate individuals. Criminals combine data from breaches, phishing, or data brokers to build convincing profiles. Online applications increase opportunities for identity misuse, as the Federal Reserve notes, particularly with available stolen information and advancing technology.

Detecting Fraud Clues

Signs of new-account fraud can appear in several places:

• Credit Reports: Investigate unfamiliar accounts or inquiries on Equifax, Experian, and TransUnion reports.
• Unexpected Mail or Email: Stay alert for account-related messages from applications you didn’t initiate.
• Debt Collector Communications: Verify debts with sources before dismissing them.
• Account-Monitoring Services: These can provide alerts for phone, utility, or buy-now-pay-later accounts not on credit reports.
• Strange Address Entries: Unknown addresses on credit reports warrant further investigation.

Steps to Prevent New-Account Fraud

1. Check Credit Reports: Regularly review Equifax, Experian, and TransUnion reports at AnnualCreditReport.com for free weekly access.
2. Be Alert for Unfamiliar Entries: Investigate unknown accounts or details on your reports.
3. Consider a Credit Freeze: Freezes restrict access to your credit report, hampering new account openings. Contact all three credit bureaus to initiate freezes.
4. Monitor Mail and Email: Look for messages related to unknown accounts.
5. Activate Monitoring Services: Use bank-provided alerts and identity theft monitoring for additional vigilance.

Responding to Fraudulent Accounts

If you discover unrecognized accounts, follow these steps:

1. Contact the company’s fraud department to explain the situation and request account closure or suspension.
2. Submit a report at IdentityTheft.gov to create an FTC Identity Theft Report.
3. Set a fraud alert or credit freeze. Contact one major credit bureau for the fraud alert; they will notify others.
4. Dispute fraudulent entries with credit bureaus, using the FTC report and personal identifications.
5. Enable monitoring services and alerts on your financial accounts.
6. Keep detailed records of communications and confirmations related to the fraud.

Kurt’s Key Takeaways

New-account fraud often goes unnoticed as criminals ignore monitored accounts. Regularly check all three credit reports for unauthorized activities. Consider credit freezes and alert services to catch irregularities early. Prompt action enhances the chance of minimizing damage.

Check your credit reports regularly. Share your experience at CyberGuy.com.