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Identity Theft
Written by Max Uhls, Highland High School, Highland, IL
Introduction
Identity theft is an expression used to refer to all kinds of crime in which someone wrongfully obtains and uses another person's private information in some way that involves fraud or deception, typically for financial gain. Your personal information, especially your Social Security number, your bank account or credit card numbers, your telephone calling card number, and other valuable identifying data can be used, if they fall into the wrong hands, to personally gain at your expense. In the United States and Canada, for example, many people have reported that unauthorized persons have taken funds out of their bank or financial accounts, or, in the worst cases, taken over their identities altogether, running up huge debts and committing crimes while using the victims' names. In many cases, a victim's losses may include not only financial losses, but significant additional financial costs associated with trying to reinstate his reputation in the community and correcting erroneous information for which the criminal is responsible.
Identity theft is a serious crime. There has been over 10 million people fall victim to identity theft. Victims spend an average of $1,500 and 175 hours to recover per person – a total cost of $50 billion. People whose identities have been stolen can spend months or years – and thousands of dollars – cleaning up the mess thieves have made of their good name and credit record. In the meantime, victims may lose job opportunities, be refused loans for housing, cars, education, or even be arrested for crimes they did not commit. Humiliation, anger, and frustration are common feelings victims experience as they endure the difficult task of reclaiming their identity.
How Identity Theft Occurs
Despite your best efforts to manage the flow of your individual information or to keep it to yourself, experienced identity thieves may use a host of different methods to gain access to your data. Here are some of the ways thieves can get your personal information and take over your identity.
- They steal wallets and purses that contain your identification and credit and bank cards.
- They steal your mail, including your bank and credit card statements, per-approved credit offers, new checks, and tax information.
- They complete a “change of address” form to divert your mail to another location.
- They rummage through your trash, or the trash of businesses, for personal data in a practice known as “dumpster diving.”
- They fraudulently obtain your credit report by posing as a landlord, employer, or someone else who may have legitimate need for, and legal right to, the information.
- They find personal information in your home.
- They find personal information you share on the Internet.
- They scam you, often through email, by posing as a legitimate company or a government agency you do business with.
- They get your information from the workplace known as “business record theft” by stealing files out of offices where you are a customer, employee, patient, or student. They bribe an employee who has access to your files. They “hack” into electronic files.
How Identity Thieves Use the Information
Whether they find your information in a stolen wallet or buy it from a shady Internet trader, with enough of your information, criminals can assume your identity and quickly commit a flurry of costly crimes. The estimated annual tab: $53 billion. Most common ways of using the information is listed below.
- Some charge to an existing credit card account, but most create new ones. (Thanks to new safeguards, this method has been trending down since 2002.)
- 16% of all identity-fraud complaints mention opening new phone accounts. 5% mention utility charges.
- Twice as many draw from (and drain) existing accounts as create new ones. Fraudulent electronic fund transfer has doubled since 2002.
- Using stolen name and identity to get hired is up 4% in the past three years.
- Criminals use your information to obtain bogus Social Security cards and driver’s licenses. Other government crimes include tax fraud and stealing of benefits.
- Identity thieves use your information to acquire loans, mostly business, personal, or student loans. Other loans include auto loans and mortgages.
- Other identity theft crimes include using stolen identification when caught committing another crime. Still others include insurance and securities fraud, health-care scams, and bankruptcy schemes.
How to Minimize Your Risk of Identity Theft
While you can not prevent identity theft entirely, you can minimize your risk. By managing your personal information wisely, cautiously, and with an awareness of the issues, you can help guard against Identity theft.
- Photocopy all credit account information, including cards, investments, and bank info.
- Always keep credit card receipts.
- Place a pre-emptive fraud alert on all credit reports.
- Contact credit card issuer if cards do not arrive in a timely manner.
- Never use the last four digits of your Social Security number as your pin number.
- Avoid your mother’s maiden name, your birth date, middle name, or pet’s name as a password. Use a mixture of numbers and letters (upper and lower case) in your passwords.
- Avoid using your Social Security number unless it is absolutely necessary. Check your Social Security earnings and benefits statement each year for fraud (call 800-772-1213 for more information).
- Install a firewall on your computer, keep virus protection software updated and password-protect key files. Always remove computer data with a “wipe” utility program before disposing of a PC.
- Review bills each month for evidence of misuse.
- Shred pre-approved credit offers before disposing of them.
- Store canceled checks safely.
What to Do If Your Identity Is Stolen
Sometimes an identity thief can strike even if you have been very careful about keeping your personal information to yourself. If you suspect that your personal information has been misused to commit fraud or theft, take action immediately, and keep a detailed record of your conversations and correspondence. Exactly which steps to take to protect against further damage depends on your circumstance and how your information was misused. However, three basic actions are appropriate in almost every case.
- Place a fraud alert on your credit reports by calling Equifax (888-766-0008), TransUnion (800-680-7289) or Experian (888-EXPERIAN). Review your reports carefully for unsolicited inquiries, unknown accounts and new debts. Get bogus information purged immediately.
- Close all accounts that have been compromised. Follow up in writing with copies of supporting documents. Choose new passwords for all new accounts. For fraudulent charges on existing accounts, fill out a fraud-dispute form; for new, unauthorized accounts, submit the FTC’s ID Theft affidavit (www.consumer.gov).
- File a report with the local police or the police in the community where your identity was stolen. Get a copy of the police report (or its number) to help deal with any creditors who require proof of the crime. If you are having trouble, contact your state Attorneys General (www.naag.org).
- File a complaint with the Federal Trade Commission (complaint form).
References
Last Updated:
08/02/2005
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