A data leak occurs when unauthorized individuals gain access to confidential data. Individuals and organizations use firewalls, encryption, and the top 5 free redaction tools for data redaction to protect their sensitive information. However, data breaches can still occur if those tools are not implemented properly or if the wrong people are given access. These breaches can jeopardize the security and privacy of individuals and businesses and lead to millions in financial losses.
Since most of us use the internet daily to access company websites, order products, and manage our bank accounts, it is easy to see how a data breach can be inconvenient. However, there may be more serious consequences than having a fake Facebook profile created or not being able to access your account for several days. Read on to find out more about how a data leak can negatively impact your personal life in more ways than one.
Credit Card Fraud
Credit card fraud is one of the most common types of identity theft associated with data breaches. When sensitive information such as credit card numbers, expiration dates, and security codes is compromised, thieves can use these details to make fraudulent purchases online or withdraw cash from ATMs. These sneaky transactions can go unnoticed until the cardholder checks their credit card statement weeks later. Reporting such fraudulent transactions can be difficult since many card companies will not cover unauthorized charges if the cardholder failed to report the breach within a certain timeframe.
Identity Theft
Identity theft occurs when an individual uses another person’s personal information to commit fraud or other crimes. This is a major risk after a data breach because criminals can use the stolen information to open new bank accounts in the victim’s name, apply for loans or mortgages, or send false tax documents to the government. Identity theft can be difficult to detect because it can span several sources, including financial accounts and medical records. Victims may end up becoming liable for expenses related to the theft and may even be charged for crimes committed by the person who stole their identity.
Financial Loss
Even if your identity does not get stolen, your data can still be used by hackers to steal money from your bank accounts or open new credit card accounts. Unlike credit card fraud which only affects your credit account associated with the card, financial identity theft allows the perpetrator to have direct access to all your funds. They can transfer your funds from your bank account into others accounts or take out high-interest cash advances. Because it can be difficult to prove hacking or phishing and investigations can take months, victims are often left to cope with their financial losses or outstanding loan balances.
Credit Damage
Your credit report contains information that creditors use to make decisions about a variety of applications. It contains details such as your FICO score and credit accounts, along with records of late payments and bankruptcies. It is notoriously difficult to rehabilitate a poor credit report. When you are a victim of financial identity theft, you may face damage to your credit rating because your credit history will be linked with the criminal’s identity and activities—even after they have been arrested. This can result in denied loan applications or the loss of a job opportunity due to a negative credit check.
Reputation Damage
Even if you do not suffer any financial loss because of a hacker’s actions, your name may still end up being involved in criminal activity. For instance, if the thief has access to your private medical information, they may use this information to apply for medical services in your name or to obtain prescription drugs for illegal purposes. Your private information may also be published on the internet. Details about your personal life that you do not want to be public knowledge may be revealed. This can tarnish your reputation, cause personal problems, and even cost you a valuable professional opportunity that you were pursuing.
Legal Proceedings
When your identity is stolen, you will need to resolve the issue with the authorities as well as various financial institutions. The process can take time and it can be difficult if you are unfamiliar with law enforcement or legal proceedings. You may even find that you face criminal charges! Although you are the victim of the data breach, the perpetrator is seldom found. This means that you are liable for shouldering all the legal costs associated with protecting your identity and proving your innocence in the case of criminal charges. These costs can quickly become prohibitive and can cause you even more stress and trauma.
According to a report by the Identity Theft Resource Center (ITRC), data breaches have grown substantially in recent years. There were 1,862 data compromises in 2021, impacting approximately 294 million people. If you are unlucky enough to fall victim to one of these incidents, you may have to deal with a lengthy investigation, lost savings, legal costs, and more.
The Internet is a wonderful place to connect with others and be entertained, but it is important to stay safe when using it. Keeping your computer up to date, avoiding suspicious websites, and securing your personal information can go a long way in preventing a data breach from happening to you.