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Digital identities make your online experiences frictionless, convenient, and consistent. But there’s a price users pay to use digital identities. In fact, a whopping 86% of users are worried about identity theft–and 90% would use a single digital identity service when it’s explained to them. Their worries are justified—$189,205,793 were lost to identity theft in 2022.
Let’s review the basics of digital identity, how they work, and the best way to protect your digital identity from data brokers and cybercriminals.
Think of a digital identity as an online version of yourself. It includes data that allows it to interact with digital services—including your online banking and social media accounts—as if it’s really you. Here’s an overview of the information your digital identity includes:
Digital identities are used across the internet to access online services, make transactions, communicate via email or social media, and more. Of course, platforms that require users to share their digital identity must also ensure the security and privacy of this information.
Unfortunately, security isn’t always guaranteed—even large companies like AT&T and Microsoft suffer data breaches.
Here’s an example of what the identity of Adam Smith, a fictional character, might look like:
Let’s break down what each of these four terms means:
Your online self takes various forms based on the type of digital service it’s interacting with and the personal data required for that interaction.
In cybersecurity, digital identities can include machine identities, cloud identities, and human identities.
But there are many other varieties of digital identities. The digital version of your legal identity, such as your passport and driver’s license, is also a type of digital identity.
Similarly, your temporary email addresses and phone numbers can also be classified as anonymous identities.
Here’s why managing digital identity is important in the modern world:
A digital identity is your key to accessing many aspects of modern life, especially online. Your professional and personal life might be very different if you don’t have a digital identity.
While a digital identity comes with various risks, there are ways to manage those risks and stay secure. Just following some basic principles and best practices can ensure you never fall victim to online scams or identity theft.
Here’s a quick overview of how digital identities work:
The first step is to create a digital identity. When you create a new digital identity, the entity you’re signing up with allows you to create a username and password and asks you to share personal information. Your personal information may be verified via means like SMS or email codes.
When you sign up on Amazon, you’re required to insert your name, address, email, and various other details. This helps Amazon create a digital identity for you in their database. Amazon also adds your credit card information to your identity if you save a credit card in your account for quick checkout.
Whenever the user wants to access their account, they use the username and password associated with their digital identity. For added security, users can configure multi-factor authentication (MFA).
This involves using a code sent to your phone or biometric verification. There are also digital identity verification services that help with identity proofing, document verification, and biometric verification.
For example, Amazon requires users to confirm their email with a verification link. The mode of verification depends on the service, the vendor you sign up with, and the type of information they ask for from clients—that’s why banks often require biometric verification.
Authorization helps the service determine what the user is allowed to do within the service after authentication. Each user is granted permissions based on their roles—administrators control these permissions with a feature called role-based access control (RBAC).
Amazon grants a set of permissions to your digital identity, which means if you’re a regular user, you can’t access any Prime features. Similarly, when you’re using enterprise software, not all users have access to all features, thanks to authorization and access control.
The system collects identity-wise data to track user activity for security audits, troubleshooting, and analytics, and to improve the user experience. The digital identities also need to be managed—users may request to change the password, recover their account when they lose their password, or request to deactivate or delete their account.
Amazon monitors and manages accounts too. It lets you change your password and deactivate your account. It also notifies you when someone logs into your account from another country or device.
Digital identity comes with various risks. More than 70% of U.S. adults said in a survey that they have experienced one case of identity theft–while about 27% said they have experienced it more than once.
Digital identities also include details like your address, which means risks may spill into the physical world as well. For example, you may fall victim to a brushing scam.
Being aware of the risks is a great first step towards protecting your digital identity. Here are some risks associated with digital identities:
A digital identity contains a wealth of personal information. This information is collected and stored by online services on their servers—information that one of the service providers might misuse.
For example, the provider might share your information with third parties without consent. Or a hacker might break through the provider’s security infrastructure and steal your information.
There are countless methods for cybercriminals to get your information. They could use a phishing link, social engineering, or man-in-the-middle attacks to get your information. And your information can include a wide range of data, including your banking or credit card information.
They might use the information to steal money out of your account or file your tax returns to falsely claim a refund to their account.
If a cybercriminal manages to steal the data associated with your digital identity, they can impersonate you, gain access to your accounts, and commit fraud. This could result in financial or reputational loss, and let’s not forget the cost of reclaiming your identity, which can be a lengthy process.
Let’s say you’re prepared to get through the lengthy process and reclaim the lost account with a password reset with help from the support team. But what if you were using your fingerprint or face ID to login? You can’t change either of those physical traits.
Internet companies want your information and cybercriminals want to earn commissions by illegally selling them your data.. Cybercriminals use various techniques, including man-in-the-middle attacks, phishing, and social engineering to steal your personal information.
And cyberattacks aren’t going away any time soon. In fact, the Federal Trade Commission (FTC) reported over 100,000 instances of credit card fraud in Q1 of 2024 alone.
Ignorance is your biggest enemy here because it’s not about if a breach will occur. In many cases, it’s about when. If you’re not protecting yourself against these risks by delinking your information, using a password manager, encrypting your storage, and learning about best practices for online security, a criminal might gain access to your account and steal your money or your identity.
Now that you’re aware of the risks, let’s talk about ways to protect your digital identity.
Social media is a hacker’s number one choice for harvesting personal information. This is because people are often reckless about what they share online. Information like your birthday, the name of your first school, and even your first car is often readily available on your profile. This helps them answer security questions when trying to gain access to your account.
To protect this information, crank up the privacy settings on your online accounts. Of course, the best solution is to never post sensitive information—posting a picture of a new car’s picture is fine if you’re using the right privacy settings–but never share your SSN online.
Not sharing information is a great way to protect personal data, but what about personal information that’s already wandering about the web? That’s where a tool like Cloaked can help. Cloaked is an extensive personal privacy solution that helps you safeguard personal information across a broad range of threats.
Speaking specifically about finding your personal information: Cloaked scans databases of data brokers across the web for personal information—name, phone number, address—and gives you insights about your level of personal online privacy.
Suppose a Cloaked scan reveals that hundreds of data brokers have your information. What then? The next step is to use Cloaked’s data deletion feature to wipe all that data. But remember, a service provider can sell your data to more than one broker at different times.
Regular housekeeping is necessary; a one-off cleanse is not enough. As part of the cleaning process, request websites you suspect are selling your data. They’re not always easy to identify, but if you start receiving a lot of spam on your email or phone number after registering with a new provider, it’s time to ask them to remove your data and cut them loose.
With AutoCloaking and Data Deletion, Cloaked ensures compromised digital identities from your past won’t come back to haunt you.
There are more ways to verify your identity than using your real information. For example, you can use Cloaked to receive one-time codes to your masked email or phone number. You can also configure token-based or biometric verification to eliminate the need to use your login credentials.
Set up one or more of these verification methods on your account for added security.
Once you’ve taken all the security measures, it’s time for comprehensive protection. For complete security and privacy, join Cloaked, a platform with various tools to protect your information. You can essentially make your data invisible by cloaking your digital identities.
Cloaked helps you generate digital identities for every part of your online life, from shopping to dating and beyond. We also offer identity theft protection that covers you against losses from identity theft.
For example, you can create separate identities for your Amazon and Tinder accounts. This helps minimize privacy risks because none of these platforms have any real information about you. They also can’t use one of your accounts to find another.
If you already have online accounts with personal information, use Cloaked to scan and delete data from sources where you don’t want it. You can also use AutoCloak to replace personal information across popular online platforms with a single click.
With Cloaked, you also get plenty of other privacy tools and features, including:
Let’s talk about some other common questions you may have about digital identities.
Digital identities are most commonly used in:
A digital identity’s security depends on the underlying technologies deployed to protect it, the way it’s managed, and the vigilance of users and service providers. This means that authentication methods, encryption, regular updates and patches, and setting a strong password, all impact the security of a digital identity.
Yes, you can have multiple digital identities. In fact, it’s common for people to have multiple digital identities. Creating multiple identities allows you to separate personal and professional communication and keep your real identity secure and away from the internet.
Using multiple identities is an effective way to de-risk. But managing different identities can be a hassle unless you use a tool like Cloaked, which helps you generate unlimited identities and easily manage them.
Digital identities are baked into a modern citizen’s daily life. Cybercriminals won’t stop lurking on the internet anytime soon, but there are ways to protect your personal information and prevent financial loss.
That’s why you need to protect your digital self with a comprehensive privacy solution like Cloaked. That’s where Cloaked steps in, offering a powerful, three-pronged approach to securing your online presence: Identify, Remove, Protect.
Our privacy platform helps you secure personal information by creating multiple digital identities that contain fabricated information. You can create new emails, phone numbers, and entire identities—this means you never have to use your real information on the internet.
Start your journey towards a more secure online space where your digital version is safe and away from data thieves by signing up for Cloaked!
