Special Report on Identity Theft

Identity Theft is the fastest growing crime in America today. Would you know what to do if it happened to you?

When someone else uses your name, address, Social Security Number, bank account number, credit card account, or other personal identifying information without your knowledge or consent, that is “Identity Theft.”

The Federal Trade Commission (FTC) reports that 9.9 Million Americans were victims of Identity Theft in 2003, and 9.3 Million more were victims in 2004. That’s nine percent (9%) of the US population in the last two years alone!

Identity Theft is a serious crime and a big problem. Victims can spend a lot of time and money cleaning up the mess thieves make of their good name and credit. You could lose out on job opportunities and loans for real estate, autos, and education. Your bank accounts could be wiped out. You could even get arrested for a crime you did not commit.

A professional thief can assume your identity in just a few hours. But it could take you years to restore your credit and your life. This article explores the Identity Theft problem and offers concrete steps you can take right now to minimize the risk to you and your family.

How They Steal Your Identity

Identity thieves use a variety of ways to steal or gain access to your personal information:

• They steal your wallet or purse.

• They steal your mail, including bank and credit card statements, pre-approved credit offers, new checks, or tax information.

• They complete a “Change of Address” form with the Post Office to divert your mail to another location.

• They rummage through your trash, the trash of businesses, or dumps (known as “dumpster diving”).

• They steal personal information from your home.

• They scam information from you by email or telephone by saying they’re from a legitimate, well-known company or institution (such as Citibank, PayPal, Bank of America, the IRS, etc.), and they tell you there is a problem with your account. They may also say they’re “taking a survey,” or that “you’ve won a prize.” (This practice is known as “phishing” online and “pretexting” by telephone.)

• They steal your credit reports by abusing their employer’s authorized access or by posing as a landlord, employer, or someone who may have a legal right to the information.

• They steal your credit and debit card account numbers as your card is processed by capturing the information in a data storage device (a practice known as “skimming”).

• They steal your information from businesses or institutions by:

  • stealing records from their employer

  • bribing an employee who has access to the records

  • conning information out of employees

  • hacking into the organization’s computers

How Identity Thieves Use Your Personal Information

Once identity thieves have your personal information, they can use it to commit fraud or theft. For example, they can:

• Open a bank account in your name and write bad checks on that account.

• Open new credit card accounts, using your name, date of birth, and SSN. When they don’t pay the bills, your credit gets trashed.

• Go on spending sprees using your credit card numbers to buy “big ticket” items that can be sold easily.

• Change the mailing address on your credit card account. When the thief runs up charges on your account, you won’t know about it because the bills are being sent to the new address.

• Counterfeit checks or debit cards, or authorize electronic transfers, and drain your bank account.

• Buy new cars by taking out auto loans in your name.

• Get a driver’s license issued with their picture on it and your name.

• Get a job or file fraudulent tax returns in your name.

• File for bankruptcy under your name to avoid paying debts they’ve incurred.

• Give your name to police during an arrest. If they don’t show up for court, an arrest warrant could be issued in your name.

How to Prevent Identity Theft

Although you cannot guarantee you will never be a victim of identity theft, you can take some steps immediately to minimize your risk:

• DO secure sensitive financial information such as bank statements, PIN numbers, paper checks, where others cannot access it, including family members, friends, neighbors, and domestic employees. (Family, relatives, friends, and neighbors make up half of all “known” identity thieves.)

• DO deposit outgoing mail in post office collection boxes or at the post office rather than in an unsecured mailbox. Remove your mail from your mailbox promptly or use a locked mailbox.

• DO shred your charge receipts, copies of credit applications, insurance forms, physician statements, checks and bank statements, expired charge cards, and credit offers you get in the mail.

• DO carry only the identification information and the number of credit cards you’ll actually need.

• DO place passwords on your credit card, bank, and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your SSN, or your phone number.

• DO pay attention to your billing cycles. A missing bill could mean an Identity Thief has taken over your account and changed your billing address to cover his tracks. If bills don’t arrive in time, follow up immediately with the creditor.

• DO keep your purse or wallet in a safe place at work.

• DO pick up new checks at the bank, rather than having them mailed to you.

• DO use and regularly update a firewall, anti-spyware, and anti-virus software on your computer.

• DO monitor your account balances and activity electronically at least once a week.

• DO NOT carry your Social Security Card in your wallet or purse; leave it in a safe place. (Lost or stolen wallets, purses or checkbooks are the number one “known” method of identity theft.)

• DO NOT give your SSN unless absolutely necessary. Ask to use other forms of identification when possible.

• DO NOT give out personal information on the phone, through the mail, or over the Internet unless you are the one who initiated the contact or are certain you know who you’re dealing with.

• DO NOT sign the back of your credit cards. Instead, put “PHOTO ID REQUIRED.”

• DO NOT put the complete account number on the “FOR” line when paying credit card bills with checks. Only put the last four numbers of the account.

• When you receive email from financial institutions (such as Citibank, PayPal, Bank of America, etc.), DO NOT use the link provided in the email. Type in their known address or call them instead.

During my research for this article, I discovered that identity theft can be devastating, and the process of restoring your name can be overwhelming and costly. Early detection is the key to minimizing damage if your identity has been stolen or compromised.

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