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Identity Theft

Have you ever opened unsolicited mail and immediately thrown it in the garbage without reading it? Probably so; but are you aware that by doing this you could be giving a criminal exactly what he needs to support a career in crime? The same applies to other carelessly discarded documents including bills and bank statements. Throwing papers away casually can cost you greatly. A person with even a marginal criminal mind can use your personal information to steal your identity and apply for loans and credit cards in your name, or maybe even impersonate you in order to take over your credit card account.

This type of crime is called identity crime, and unfortunately, it's the fastest growing area of criminal activity in the US. The number of identity fraud cases has increased dramatically over the last couple of years. A September 2003 report by the Federal Trade Commission indicated there were nearly 10 million victims of identity theft in 2002, with costs to individuals estimated near $5 billion, and costs to businesses at $48 billion. Separately, the FTC reported that identity theft complaints were its number one consumer complaint in 2002. Statistics continue to be gathered within state and federal governments, and efforts to combat and investigate fraud continue across many boundaries including the FBI, the Federal Trade Commission, the US Postal Service, the Secret Service, the Social Security Administration, local authorities and state agencies.

E-Commerce and ever increasing Internet usage have created a wealth of targets for identity theft criminals. Specific personal data, such as your Social Security number, home address and mother's maiden name, can be all a thief needs to obtain a fraudulent driver's license. With this information, a thief's options are numerous. Thieves can obtain this personal information in a variety of ways. Credit card account statements contain a lot of sensitive information that you don't want in the hands of a thief. Even store receipts will frequently have your credit card number printed on them. Sometimes an account number is all one needs to make charges, obtain cash advances, take over existing bank or credit accounts, apply for new credit card accounts under your name, or divert card statements to a different address in an attempt to buy them more time on your credit limit. For this reason, if you don't receive a credit card statement on time, you should call your creditor immediately to verify that the address has not been changed.

Another source of potential identity theft is pre-approved credit offers. A thief who intercepts one may fill out the application and change the address to obtain a credit card in your name for which you will never receive a statement. To combat this, some creditors will not issue a card to a new address on a pre-approved offer certificate, but this policy isn't universal yet. The thief may even make the minimum payments for a while, until such time as the card is maxed out. Then the account would eventually be turned over for collections in your name, and listed on your credit report.

Pretexting is the practice of getting your personal information under false pretenses. This is another method that identity thieves use to access your information. Pretexters sell your information to people who may use it to get credit in your name, or maybe even steal your assets. Pretexters use a variety of tactics to get your personal information. For example, a pretexter may call and claim they are from a survey firm, and ask you a few questions. When the pretexter has the information they want, they use it to call your financial institution. They pretend to be you or someone with authorized access to your account. The pretexter may claim to have forgotten his checkbook and needs information about his account. In this way, the pretexter may be able to obtain personal information about you, such as your bank and credit card account numbers, information in your credit report, and the existence and size of your savings and investment portfolios.

These are just a few of the many different ways a criminal could obtain your personal information. With this in mind, it is relatively easy to protect yourself from these heinous crimes. Some helpful tips on protecting your personal information include paying attention to your statement cycles. Follow up with your financial institutions if your statements don't arrive on time. Review your statements carefully and promptly. Report any discrepancies to your institution immediately. Keep items with personal information in a safe place. Tear or shred your charge receipts, copies of credit applications, insurance forms, bank checks and other financial statements that you're discarding, expired charge cards and credit offers you get in the mail. Add passwords to 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 social security number, or your phone number, or a series of consecutive numbers. Be mindful about where you leave personal information in your home; especially if you have roommates or are having work done in your home by others. One of the best ways to keep track of new information that is added to your credit report is a credit check monitoring service, which provides online monthly monitoring alerts to inform you of any recent inquiries into your credit, and several indicators of possible credit fraud. These services usually charge on a monthly basis and would be well worth the money if you were unfortunate enough to be a victim of identity theft.

If you think you are a victim of identity theft you should contact your financial institution immediately. Close accounts that have been tampered with and open new ones with new Personal Identification Numbers (PINs) and passwords. Contact the fraud departments of each of the three major credit bureaus immediately. Tell them to flag your file with a fraud alert including a statement that creditors should get your permission before opening any new accounts in your name. Contact your local police as soon as possible, and ask to file a report. Even if the police can't catch the thief, having a police report can help you in clearing up your credit records later on. Contact the Federal Trade Commission as soon as possible as well. The FTC works for the consumer to prevent fraudulent claims made by creditors.

In October 1998, the US Congress passed the Identity Theft and Assumption Deterrence Act of 1998 (Identity Theft Act) to address identity fraud. However, even with the passage of new laws, one can assume that identity fraud will continue as long as criminals exist.

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