How to Keep Your Personal Information Safe from Identity Theft
What is Identity Theft
Identity theft – the taking of a person’s financial or personal information and assuming that person’s name or identity in order to make purchases or other types of transactions – is one of the most talked about crimes of the past few years.
Today, this crime goes far beyond simply stealing one’s credit card number or drivers license. Those who are involved in the stealing of others’ identities may even rent an apartment, establish a phone or utility account, or obtain loans – without the rightful owner even being aware that the crime is being committed. Tax-related identity theft is a rapidly growing crime in the United States, as reported here.
The Prevalence of Identity Theft
It has been estimated that over 9 million Americans become the victims of identity theft every year. With the ease of online access to information, identity thieves continue to steal and utilize the identities of innocent victims – many without even having knowledge that their identities have been stolen. In fact, in many instances, victims remain completely unaware of the fraud being committed until they are contacted by a debt collector. At that point, it is often much too late.
How Identity Thieves Operate
Once an identity thief has even just one single piece of information such as a credit card number or other type of financial account details, a fake drivers license or Social Security card can be created, along with other accounts that require this type of information to open and activate.
Identity thieves can be tricky, and they are oftentimes armed with numerous ways to obtain the personal information of their victims. In many instances, consumers feel safe in giving out small bits of information, feeling that it is not enough for an identity thief to use. However, this is not the case.
While identity thieves can obtain personal information by stealing wallets and purses that contain it, some of the other more prevalent – and less obvious – ways in which these individuals and entities can obtain the information that they need can include:
- Stealing mail from the mailboxes of homes and businesses.
- Sifting through the trash at homes or businesses in search of bills or other paperwork that contains personal details.
- Changing the address on consumers’ and businesses’ billing statements to another location where such information can then be received by the identity thief.
- Stealing the credit and debit card numbers from individuals by using a special storage device when processing a card for a purchase transaction.
- Posing as a business or financial institution and sending email spam asking for personal and/or financial details. (This is often referred to as phishing).
- Calling consumers and businesses and claiming to be collecting information for a firm that is conducting research. (This is also known as pretexting).
How Stolen Personal Information is Used by Identity Thieves
Once an identity thief has obtained the information that they need, it can be used in many different ways. Some of the most common types of fraud that is committed by identity thieves include:
- ATM Card Cloning – In some cases, an identity thief will “clone” or make an identical copy of a victim’s ATM card for the purpose of making electronic withdrawals of cash. The fraudster may also go so far as to open lines of credit or obtain a loan in the name of the victim.
- Bank and Financial Fraud – Using bank or financial fraud, an identity thief will create counterfeit checks using the name and bank account number of a victim. Once the checks are created, they are used to make purchases and/or to obtain cash.
- Credit Card Transactions – Using a victim’s information, an identity thief may also open credit card accounts. He or she will then make purchases using the card, but will not pay the bill. In this case, the credit card company will come after the victim for payment – and, the unpaid balances can actually have a negative effect on the victim’s credit report.
- Opening Utilities and Other Accounts – Identity thieves may open accounts for wireless or cell phone service in the name of a victim, and then run up charges on the account. Cable television and electric utility accounts may also be fraudulently opened in the name of a victim.
- Drivers License and Other Government Document Fraud – In this type of fraud, an identity thief will obtain a drivers license or other type of official ID card from a consumer. Although the card will have the personal information of the victim, the photograph will be of the identity thief or other scammer. Such ID cards may then be used for fraudulently obtaining loans, government benefits, and even filing phony tax returns for the purpose of obtaining a tax refund check.
How to Combat and Prevent Identity Theft
There are several ways to help combat identity theft and ensure that you do not become a victim. One way is to monitor credit, as well as to have your name removed from lists such as pre-screened offers of credit or insurance.
Another product on the market today is fraud alert. These indicators are placed in an individual’s credit file or report for the purpose of warning potential creditors to use reasonable policies and procedures in order to verify identity prior to issuing credit to anyone who asks for it.
In addition, it is also suggested that consumers obtain and review their credit report at least once per year. In doing so, it is easier to keep tabs on any potentially fraudulent activity and to prevent further damage if fraud has been detected.