IDENTITY THEFT

Introduction Prevention

Why Identities Are Stolen

Addresses
Who's At Risk The Law
How Thieves Steal

Resources

 

INTRODUCTION

In the course of a day you may write a check, make a credit card charge, rent a car, call home on your cell phone, or numerous other activities that require or use personal information. Chances are you don't give these routine transactions a second thought. But others may.

Because it is a relatively low-risk, high-reward gamble for criminals, identity theft is the fastest-growing crime in America.  There are over half a million new victims each year. Identity theft is the taking of a victim's existing accounts, apply for loans, establish accounts with utility companies, rent an apartment, file bankruptcy, or obtain a job using the victim's name.

Combine your Social Security number with a few additional pieces of data, such as your birth date, home address and phone number a criminal can apply in person for instant credit or through the mail posing as you. Once the first account is opened, they can continue to add to their credibility.  Thousands of dollars can be stolen without the victim knowing about it for months or even years.  It's not only an invasion of privacy, it can be a costly and timely ordeal, causing great emotional and financial distress. 

WHY IDENTITIES ARE STOLEN

While numerous variations of the crime exist, an identity thief can fraudulently use personal information to:

  • Open new credit-card accounts

  • Take over existing credit-card accounts

  • Apply for loans

  • Rent apartments

  • Establish services with utility companies

  • Write fraudulent checks

  • Steal and transfer money from a bank account

  • File bankruptcy

  • Obtain employment

Federal law limits a consumer's liability for credit-card fraud to $50 per account. Visa and MasterCard have recently adopted zero-liability policies. The real problem for most victims is straightening out a damaged credit history.

How much does it cost to reinstate your good name? According to a survey conducted by Privacy Rights Clearinghouse and the California Public Interest Research Group, victims reported spending from $30 to $2,000 on costs related to their identity theft, not including lawyer fees. The average loss was $808.

WHO'S AT RISK

Anyone with a social security number is at risk of identity theft--young, old, rich, poor, and even the deceased. Identity theft is a crime of opportunity. The thieves will impersonate anyone whose information they can obtain. Popular targets include people with common names, as well as mothers, daughters, juniors and seniors with the same name.

Here are some of the most common names in the United States, according to the U.S. Census Bureau:

Family names: Brown, Davis, Johnson, Jones, Miller, Moore, Smith, Taylor, Williams, and Wilson.

Males: Charles, David, James, John, Joseph, Michael, Richard, Robert, Thomas, and William.

Females: Barbara, Dorothy, Elizabeth, Jennifer, Linda, Maria, Mary, Patricia, Margaret, and Susan.

The more common your name, the more at risk you are. Where you live also increases your chances of identity theft.  Most thefts have occurred in California, Florida, New York, and Texas.

HOW THIEVES STEAL

To defend against identity theft, you must understand how the thieves operate. Here are some of the most common techniques used by criminals to steal identities:

Mail theft: The mailbox's red flag is an open invitation to identity thieves. If you leave outgoing bills in the mailbox for the postal carrier to pick up, a thief can pilfer the information to obtain credit in the your name. It takes only one outgoing bill or incoming bank-account statement to wreak havoc.

Fraudulent change of address:  The thief fills out a change-of-address form at the post office or with your credit-card company so that your mail is redirected to the thief's address or a mail drop. The thief then obtains mail with bank and credit-card information to take over your identity.

Dumpster diving: Business dumpsters are particularly attractive. Criminals know these receptacles may contain discarded letters with business and customer account information. Many of these "dumpster divers" disguise themselves as homeless people.

Shoulder surfing: Anytime you use an ATM or calling card in a pubic place, you put yourself at risk. Shoulder surfers are criminals who lurk around ATM machines and payphones in high-traffic areas such as airports, hotels, and shopping centers. They observe from afar, sometimes using binoculars or camcorders, hoping to catch a glimpse of your personal-identification or calling-card number.

Lost or stolen purse/wallet: Old-fashioned pick-pocketing is still a lucrative trade. However, cash is often the last thing that motivates a criminal. A lost or stolen wallet or purse provides the identity thief with a wealth of personal information, which may be used to obtain credit or commit crimes in your name.

Insider access: An employee of a business may illegally retrieve personal information that a business has collected for legitimate reasons. The employee then sells or uses the information to obtain credit in your name.

Internet: Hackers can acquire personal information via the Internet and obtain credit in your name. A target of high-tech identity thieves is personal web pages. Genealogy fans like to research family trees. They often place details online such as a mother's maiden name. However, such information is commonly used as a password for credit cards and bank accounts.

Skimmers: The advent of skimmers has made it easy for criminals to victimize businesses that accept credit and ATM cards. Here's how the scam works: Identity-theft rings recruit runners who then find temporary work within restaurants, hotels and retail outlets. The runners are given skimmers, a device smaller than a deck of cards that can read the magnetized strips on bank and credit cards the same way credit-card scanners and ATM machines read card information. They capture and retain information from cards, including account numbers, balances and verification codes. When unsuspecting customers pay a bill, their card is first swiped through the legitimate credit card machine, but also secretly swiped through the skimmer. The runner then gives the device to identity-theft ringleaders who download the information onto a computer and make a fake card.

Pretexting: Sometimes identity thieves will try to trick others into revealing personal information. One way they do this is by phoning under false pretenses such as contacting banks and posing as the account holder. In other cases, the identity thief may contact the victim directly.

PREVENTION

There are steps you can take to minimize your risk and protect yourself from becoming a victim of identity theft.

  • Invest in a personal shredder. Shred all documents, including pre-approved credit applications received in your name, insurance forms, bank checks and statements you are discarding, and other financial information.  If you do not want to receive these offers, call 1 888-567-8688 to be removed from the lists of all three major credit bureaus.   
      
  • Do no use your mother's maiden name, your birth date, the last four digits of your social security number, or a similar series of number as a password for anything.
  • Use passwords whenever possible. Password protect your credit card, bank, and phone accounts.  Avoid using passwords that contain easily available information (see above).  Use a different password for each account. Do not store written passwords in purses or wallets where credit cards are kept.
  • Before revealing personal information, find out how it will be used. Ask whether it will be shared with other companies. Many businesses will provide you with their "privacy policy." 
  • Do not give personal information over the phone, the Internet or email unless you initiated the contact or know whom you are dealing with.  Most businesses that need bank account information, passwords or credit card numbers already have all the information they need.
  • Give your Social Security number only when absolutely necessary (for loans, deposit accounts, or tax forms, for example). Ask to use other types of identifiers when possible.  
  • If a business requests your social security number, give them an alternate number and explain why. If a government agency requests your social security number, there must be a privacy notice accompanying the request.
      
  • Minimize the amount of personal and identifying information you carry. Many people have several credit cards, including cards for individual retailers; carry them in your purse or wallet only when necessary. Do not carry Social Security cards, passports or birth certificates in purses or wallets unless necessary. Consider canceling credit cards that are rarely used.
  • Write down credit card and bank account names, account numbers, expiration dates, and the phone numbers and addresses of each creditor. Store them in a safe place where you will have access to it 24/7. It's important to cancel your credit cards immediately if they've been stolen,
  • Photocopy both sides of  the contents of your wallet.  This includes credit cards, driver's license, etc. By doing this, you will know what you had in your wallet and you will have the phone numbers and account numbers to report them stolen or lost. Keep this photocopy in a safe place.
  • Check your credit report once a year. Order a copy of your credit report from each of the three major credit reporting agencies (see below). Make sure the report is accurate, includes only authorized  activities.  Correct all mistakes on your credit report in writing. send the letter return receipt requested. Identify the problems item by item and send with a copy of the credit report back to the credit reporting agency. You should hear from the agency within 30 days.
  • Maintain good financial records and keep them in a safe place.
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  • Pay attention to billing cycles. Follow up with creditors if bills don't arrive on time. An identity thief may have changed your billing address and started to use the credit card.
  • Scrutinize monthly billing statements. Open bills promptly and check your accounts monthly. Look for charges you don't recognize and report them immediately. Save receipts to compare with your billing statements.
  • Keep your eyes on your credit card during all transactions and get it back as soon as possible.
  • Just say no!  Tell merchants no when they ask for your credit card number on your personal check. Not only is it illegal in some states, but it opens consumers to possible identity theft. 
  • Be careful using ATM's and phone cards. Someone may look over yo ur shoulder and get your PIN numbers, thereby gaining access to your accounts.
  • When you order new credit cards in the mail or if one has expired, watch the calendar to make sure you get the card within the appropriate time. If the card is not received within that time, call the credit card company immediately to find out if the card has been sent. If you don't receive the card, check to make sure a change of address was not filed.
  • Cancel all credit cards that you have not used in the last six months. Open credit is a prime target.
  • Take your receipts. If a store payment is made by credit card, some receipts list the full card number. Do not dispose of the receipt in a public place. At home, either file necessary receipts or cross out the card number and shred the receipt.
     
  • Don't put your driver's license, social security number, or telephone number on your checks.  Shred all canceled checks, and when it's time to order new checks, request your driver's license number be removed.
  • Have new checks delivered to the bank. This will eliminate an opportunity for a thief to steal them from your mailbox. If they are delivered to your mailbox, be sure that the package has not been tampered with and that individual checks are not missing.  When you order new checks, do not have them sent to your residence. Pick them up at the bank instead.
  • Guard the mailbox from theft. Deposit bill payments at the post office or in post office collection boxes. If going on vacation, ask the post office to hold your mail until you return.  Don't leave outgoing checks or paid bills in your residential mailbox. Take your mail to the post office or drop it in a U.S. mailbox. Consider paying bills electronically.  Install a residential mailbox with a locking mechanism or purchase a door with a mail slot.
     
  • Limit the amount of information you place on your Internet homepage and websites detailing family genealogy.
  • Only use secure Internet sites for e-commerce. When banking online or shopping with a credit card, most sites will note when you enter or exit a secure connection. Look for a small yellow "padlock" in the toolbar and "https" in the web address.
  • Never give out your password on the Internet and always use a nickname in chat rooms.
     
  • Reduce the amount of junk mail you receive. Pre-screened credit card offers are an easy target for identity thieves. To opt out of receiving pre-screened credit card offers, call: 1-888-567- 8688. To get your name removed from national direct mail lists, write: Direct Marketing Association, P.O. Box 9008, Farmingdale, NY 11735-9008.

THE LAW

Currently, 47 states have passed laws relating to identity theft. At the federal level, Congress passed the Identity Theft and Assumption Deterrence Act of 1998. The law made it a federal crime when anyone "knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law."

Violations of the act are investigated by federal investigative agencies such as the U.S. Secret Service, FBI and U.S. Postal Inspection Service, and prosecuted by the Department of Justice.

RESOURCES

Equifax ($8)
To report fraud (800) 525-6285
To order credit report: (800) 685-1111
www.equifax.com

Experian
To report fraud (888) 301-7195
To order credit report: (888) 397-3742 ($8)
www.experian.com

TransUnion
To report fraud: (800) 680-7289
To order credit report: (800) 916-8800 ($8)
www.tuc.com
www.transunion.com

Social Security Administration Fraud Line: 1-800-269-0271

Federal Trade Commission
1-877438-4338; TDD 202-326-2502
Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, DC 20580.
http://www.consumer.gov/idtheft/index.html

For more information about preventing identity theft, visit kNOw Fraud, the Federal Trade Commission's fraud protection web site for consumers.

Privacy Rights Clearinghouse
http://www.privacyrights.org/identity.htm