“Identity theft occurs when someone uses your personal identification information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes.” according to the Federal Trade Commission.
We have all heard the statistics cited by those trying to sell us Identity Theft Insurance that, throughout the world, tens of thousands of such thefts occur daily and the problem is growing. You probably have been a victim of identity theft or know someone who has been.
Years ago, the biggest worry we had was a lost credit card or forged checks and we were limited to the deductibles on credit cards and the irritation of putting stops on our checks.
What can identity theft do to you?
Now, with all that is available to the thief, someone stealing your identity can wreck your life, and cost you thousands of dollars and months of time to rectify the damage and you might not even know for weeks or months after the event that your identity has been stolen.
In your name, thieves may take out a driver’s license and a social security card; thieves can make purchases that range from incidental items to cars; they can take luxury trips on your credit; they can empty bank accounts, stock accounts, and retirement plans; they can get house loans; they can clone ATM and Debit Cards in your name; they may file a fraudulent tax return in your name; and they can even commit crimes-all in your name with your identity.
For a first hand account of several victims of identity thefts look at these testimonial horror stories. Some of the victims of identity theft can still be fighting it ten years later. Estimates of its impact indicate that as many as one in five of us will be a victim. That figure is probably rising as thieves get more organized and more sophisticated internationally.
How do these thefts occur? A few of the more common methods are:
- First and most obvious is outright theft of your wallet or purse. But even if you stop all credit cards and put a stop on your financial accounts, the thieves now have your personal information and can use that years later.
- Criminals may engage in “shoulder surfing” which is watching you punch in your telephone calling card number or credit card number or PIN number, or listening in on your conversation if you give your credit-card number over the telephone to a hotel, airline, or rental car company.
- The ever popular dumpster diving in which thieves hire someone to go through rubbish and look for discarded credit card receipts, bills, mail, credit card offers, or anything with personal information on it.
- Skimming occurs when a device is inserted into a scanning machine and stores your credit card information until it is retrieved and used by the thieves.
- Phishing over the internet when thieves pretend to be banks or government agencies seeking to verify your information (see our article on internet fraud).
How will you know if your identity has been stolen? Unfortunately, many consumers learn they their identity has been stolen after some damage has been done, but the FTC says that there are several red flags that would prompt immediate action:
- You may find out when bill collection agencies contact you for overdue debts, debts you never incurred.
- You may find out when you apply for a mortgage or car loan and learn that problems with your credit history are holding up the loan.
- You may find out when you get something in the mail about an apartment you never rented, a house you never bought, or a job you never held.
- You may find out when bills you have received regularly, stop coming to you.
No matter how you find out, the effects of identity theft can be devastating and long-term. In our next article we will look at how to prevent this theft and what to do if you do become a victim.