Identity theft has become the fastest growing crime in the world. In tops the list as the number one consumer complaint in the United States, with 19 people becoming victims of identity theft every minute. Unfortunately, with increased use of the Internet, the problem is projected to grow.
So what is identity theft and how could it affect you? Identity theft is a form of fraud that occurs when an individual or group of people steals your personal information for the purpose of obtaining financial or social benefits. It happens in a number of ways. Thieves steal credit card payments and other outgoing mail from private mailboxes on the sidewalk. They submit an address change form in the victim’s name to divert mail and collect personal and financial data. They search garbage cans or trash cans for canceled checks, bank and credit card statements, and pre-approved credit card offers. They use malicious software to steal your information over the Internet. They also use email phishing to get you to provide them with your personal information. Of course, these are just a few of the common ways this crime occurs. New tactics are being introduced all the time.
While most of these crimes involve theft for profit, there are many different types of identity theft, ranging from theft of driver’s license identification to theft of social security number. Statistics tell us that 19% of identity thefts involve credit cards or bank accounts. These are the four most common types of identity theft complaints as reported to the Federal Trade Commission:
1. Document Fraud and Government Benefits – this represents 46% *. This crime includes things like the theft of your social security number or driver’s license, your Veterans Administration benefits, or your tax refund check. Complaints in this category increased 27 percentage points from 2010. The FTC said that tax or wage fraud explains the growth in this area. Tax returns, mainly those where a refund is expected, are new targets for criminals. Another scheme uses your social security number so that illegal immigrants can get a job.
A CBS News report from June 2006 stated that 81 people were using a woman’s social security number. The woman, who lived in San Francisco, California, only found out about this when she received a tax return from the IRS stating she owed $ 15,813 in back taxes, even though she hadn’t worked in years. Ironically, the taxes were applied to work done in Texas.
2. Credit card fraud: this represents 13% of identity theft *. It can happen in a number of ways. Every time you give your card to a waiter, or pass it at a gas station, or use it online to buy something, you open yourself up to this type of fraud.
A reported problem occurs at gas stations. The thieves install a type of skimmer in the pump that reads your credit or debit card information when you swipe your card for gas. They then sell this information.
In January 2014, ABC News reported that two Mexicans were arrested at the Texas border after using information stolen from a Target credit and debit card security breach to buy several thousand dollars. The Target security breach is believed to have involved 40 million credit and debit card accounts and the personal information of 70 million customers.
3. Telephone and utility fraud: this represents 10% *. Someone steals your personal information to use your name and credit to establish an account with the water company, the telephone company, or the electric or gas company. These people will steal your good name and credit for their own benefit, even selling your information to a third party, where it could be used by hundreds of people.
This crime also occurs with cell phones (wireless phone accounts) and is expected to become the number one complaint in this category.
4. Bank account fraud: this represents 6% *. This ranges from counterfeiting to the issuance of bad checks and the electronic transfer of large sums of money.
An LA Times article from January 2014 shared a story about a woman who had five compromised accounts at three different banks.
A January 2014 report from the Wet Paint website claims that an ex-con was charged with bank fraud after he opened a company account and funneled bad checks, stolen airline retirement checks, and proceeds from auto loans to the bill. It was reported that he used his new company to access the information of certain people to commit this fraud.
5. Others: this represents 25% *. It includes all other categories, including medical fraud and attempted fraud.
A news article published in 2008 reported that a young sailor had lost his wallet while at a training camp in South Carolina. After training camp, he was stationed in California. It was almost a year later, when his mother called him and informed him that he was wanted for car theft. He also owed more than $ 20,000 in medical bills. It turned out that a South Carolina man had used his driver’s license to test drive and steal new cars. This same man also received medical treatment for kidney stones and an injured hand. Before the Marine could clear up the whole mess, his state tax return check was garnished and his credit was ruined. He also faced potential problems with his medical records. If you were visiting family in South Carolina and needed medical care, your current medical history could influence the type of medical treatment you may receive.
According to the Bureau of Judicial Statistics, identity theft cost Americans $ 24.7 billion in 2012. For many victims, the financial and psychological effects can be damaging and can last a long time. So what can you do to help protect yourself against identity theft? Here are some tips to help reduce your chance of becoming a victim:
– To protect against identity theft, never give your Social Security number, credit or debit card numbers, unless you know the organization or person requesting this information. Treat it as confidential information.
– Avoid carrying your Social Security card and passport unless they are necessary.
– Keep these and all important government and insurance documents in a safe place
– Never print your Social Security number on your checks.
– Carry as few debit and credit cards as possible and periodically check that you still have them.
– Confirm all passwords in memory. Never write them down or carry them with you.
– Make your PIN and passwords difficult for someone else to guess. Do not use your date of birth, phone number, or the last four digits of your Social Security number.
– When using an ATM, make sure no one is standing over you and can see you enter your password.
– Keep a list of your credit card numbers and financial accounts with phone numbers in a safe place. Notify your bank or credit card company of any suspicious phone inquiries, such as those requesting account information.
– Always check your monthly financial and credit card statements. If you see an unknown transaction, notify your bank or credit card company immediately.
– Report lost credit and debit cards and lost checks immediately. Your bank can immediately block the funds in the account.
– Instead of signing the back of your credit card, write “See Photo ID”, this way if your car is taken by a thief, it cannot be used to make a large purchase in person without your ID.
– Shred bank statements and financial requests before disposing of them. To avoid deleting paper statements, sign up to receive statements and bill payments through Online Banking.
– Place outgoing mail in an official and secure Postal Service collection box.
– Install antivirus and antispam software on your computer. Don’t open email attachments from people you don’t know. Be careful of pop-ups on your computer. Sometimes you think you are clicking out of them, when you passively accept a form of malware.
– Periodically review your credit file and make sure the information is correct. You are entitled to one free credit report per year from each of the three major credit bureaus (Equifax, Experian, and TransUnion). The three consumer reporting companies across the country have created a central website, toll-free number, and mailing address through which you can request your free annual report. For a free report, visit http://www.annualcreditreport.com or call 877-322-8228.
When used, these tips provide proactive measures that can help avoid the time and financial difficulties that accompany an identity theft incident. However, there is no complete testing system that guarantees that you will never be a victim. And that’s why the best advice I could offer is to suggest that you purchase an identity theft protection plan. There are many companies that offer these plans, so it would be wise to do a comparison before signing a contract. Most plans include credit monitoring, public records monitoring, and incident alerts that help with preventative measures. Where most plans differ is when your identity is compromised. Some companies send you a DIY kit, while others will provide some type of telephone consultation. However, the best plans provide a comprehensive identity restoration package that includes investigators or licensed agents who step in to help and do the “heavy lifting” for you. In times of crisis, it would be of great benefit to have a professional lead your identity restoration efforts.
Unfortunately, identity theft will be with us for the unpredictable future. While the fear factor reaches a high level, the good thing about all this is that there are measures we can put in place to provide protection for ourselves and our families.
* United States Federal Trade Commission, 2013