In the course of an ordinary, busy day, you may write a check at the dry cleaner, charge tickets to a concert, reserve a hotel room, mail your bills, call your doctor on your cell phone, order new checks, or apply for a bank loan. Chances are you don’t give these everyday transactions a second thought. But others may. In the 1990s, a new variety of crime called identity theft became rampant and it involves everyday transactions. Each transaction requires you to share personal information: your bank and credit card account numbers; your Social Security number (SSN); and your name, address, and phone numbers. An identity thief steals some piece of your personal information and uses it without your knowledge to commit fraud or theft. An all-too-common example is the act of using your personal information to open a credit card account in your name. The FBI says identity theft is the nation’s fastest-growing white-collar crime. An estimated 500,000 Americans have their identities stolen each year. A sign of the times: at least four insurance companies now offer ID-theft policies. The Privacy Rights Clearinghouse, which works with identity theft victims, says it takes an average victim of identity theft two years to clear his or her credit rating. Can you completely prevent identity theft from occurring? Generally no, especially if someone is determined to commit the crime. But you can minimize your risk of being ripped off by managing your personal information with a greater awareness and with heightened sensitivity.
Identity theft happens when someone steals your personal identifying information in order to open new charge accounts, order merchandise, or borrow money. Review list of identifying information in the slide . A person targeted by an identity thief usually doesn’t know he or she has been victimized until the thief fails to pay the bills or repay the loans, and collection agencies begin hounding the person (whose identity has been stolen) for payment of accounts that he/she didn’t even know he had. Other fraudulent activities that identity thieves perpetrate are: taking over the victim’s financial accounts, opening new bank accounts, applying for Social Security benefits, renting apartments, and establishing services with utility and phone companies.
According to the Federal Trade Commission (FTC), the most common forms of identity theft are: Credit Card Fraud. These are situations where a new credit card account is opened with a victim’s name and address or an existing credit card account is “taken over” by a fraudster, who charges items using a victim’s name and account number with no intention of paying the bill. Communications Services Fraud. This is where identity theft starts telephone, cellular, or other utility service in the victim’s name. Bank Fraud . This is where a fraudster opens a checking or savings account in a victim’s name, and/or writes fraudulent checks. Fraudulent Loans. These cases involve the identity thief procuring a loan, such as a car loan, in a victim’s name. Internet Fraud. Here an identity thief uses Web sites, e-mail and off-line methods to try to steal someone’s identity and make off with their assets. Once an ID theft is in the works, the Internet can make the job considerably easier.
Despite your best efforts to take precautions with accessibility to your personal information or to keep it private, skilled fraudsters may use a variety of methods -- low- and high-tech -- to gain access to your data and your life. According to the FTC, this is how identity thieves get your personal information: They steal wallets and purses containing your identification and credit cards, and ATM cards. They steal mail from your mailbox, including your bank and credit card statements, bills from retail stores, pre-approved credit offers, telephone calling cards, as well as tax information. They fill out a “change of address forms” to divert your mail to another location. They rummage through garbage cans or the refuse of businesses for personal data that has been discarded in a practice known as “dumpster diving.” They commit fraud to obtain your credit report by posing as a landlord, employer, or someone else who may have a legitimate need for and legal right to -- the information.
Here are several more ways you can have your identity stolen by fraudsters: They get your business or personnel records at work. This is usually an “inside job,” done sometimes by a disgruntled employee. They find personal information in your home -- perhaps they are sharing an apartment with you. They use personal information you share on the Internet. Web sites, particularly e-commerce sites, collect a lot of data from visitors. If you buy a book or a CD at a bookstore and pay cash, there will be no record linking you to the purchase. But the books, magazines, music, and movies you buy online are all linked to you by name. Web retailers are collecting a sizable database of information on individual purchases (e.g., who’s buying certain prescription drugs or books). E-commerce sites routinely share your information, or sell it. If an e-commerce site you bought from goes bankrupt, it could be legally required to sell your data to the highest bidder as a company asset. Also, sites routinely sell or exchange your personal information. Privacy advocates are seeking federal legislation requiring Web sites to let users “opt out” of sharing data, as has recently happened in financial services. Sometimes identity thieves buy your personal information from “inside” sources. For example, an identity thief may pay a store employee for information about you that appears on an application for goods, services or credit. Identity thieves also do some of their best work just by looking over your shoulder (a.k.a., “shoulder surfing”) as you dial your telephone calling card number or punch in your account number or PIN at an automated teller machine (ATM). To avoid having account data stolen in this manner, shield the key pads with your hand whenever you use a public phone or ATM.
Once identity thieves have secured a piece of your personal identification, it is relatively easy to use it to wreak havoc on your life. They may use it for a number of illegal activities such as: Calling your credit card issuer and pretending to be you. They then ask to change the mailing address on your credit card account. Next, they run up charges on your account. Because your bills are being sent to the new address, it make take some time before you realize there’s a problem. Opening a new credit card account using your name, date of birth, and Social Security number. When they use the credit card and don’t pay the bills, the account now in default is reported on your credit report. Establishing phone, cable, or wireless service in your name. Again, these bills go unpaid until service providers contact the victim looking for payment. Opening a bank checking account in your name and writing bad checks on it. Filing for bankruptcy under your name to avoid paying debts they’ve run up under your name, or to avoid eviction from their apartment. Counterfeiting checks or debit cards , and draining your bank account. Getting access to a PIN number and draining your retirement account. Buying cars by taking out auto loans in your name. Buying other big ticket items and charging them on store accounts, then never making a payment.
The Federal Trade Commission acknowledges that, while you probably can’t prevent identity theft entirely, you can lessen your risk. By managing your personal information wisely, cautiously, and with an awareness of the dangers, you can help protect against identity theft. Here are the best ways to minimize your risk : Store items with personal information in a safe place . To foil an identity thief who may pick through your trash to retrieve personal information, tear up charge receipts, copies of credit applications, insurance forms, physicians’ statements, and bank checks and statements that you are discarding, as well as expired charge cards and credit offers you get in the mail. Better still, purchase an inexpensive shredder. Give your Social Security number (SSN) only when absolutely necessary . Ask to use other types of identifiers when possible. Pay attention to your billing cycles . Call your creditors if your bills don’t arrive on time. A missing credit card bill could mean a fraudster has taken over your credit card account and changed your billing address to cover his tracks. Guard your mail from theft . Deposit outgoing mail in post office collection boxes or at your local post office. Don’t leave mail unattended at your residence mail box to be picked up. Promptly remove mail from your mailbox after is has been delivered. If you’re planning to be away from home and can’t pick up your mail, call your local post office to request a vacation hold. The Postal Service will hold your mail at your local post office until you can pick it up. Ask to establish passwords on your credit card, bank and phone accounts . Avoid using easily available information like your mother’s maiden name, your birth date or your spouse’s, the last four digits of your SSN or your phone number, or a series of consecutive numbers, like 1, 2, 3, 4.
Here are some additional identity theft precautions: Carry as little identification information and as few credit cards on your person as possible . Carry only what you’ll actually need and leave the rest at home. Do not give out personal information on the phone, through the mail, or over the Internet unless you have initiated the contact or know who you’re dealing with. Identity thieves often pose as representatives of banks, Internet service providers, and even government agencies, to persuade you to reveal your Social Security number, financial account number, and other identifying information. Legitimate organizations with whom you do business already have the information they need and will not ask you for it. Be cautious about where you leave personal information in your home , especially if you share an apartment with roommates, employ housekeeping or outside help, or are having service work done in your home. Be aware of who has access to your personal information at work and verify that the records are kept in a secure location. This is particularly important if you are in a position where you may have dealings with disgruntled employees.
Here are several more ways to protect your personal information: Don’t carry your SSN card in your wallet ; leave it in a secure place at home. Save your ATM and credit card receipts to check against your bank and credit statements . Review them carefully and promptly. Alert family members to the dangers of pretexting . Tell them that only you, or someone you authorize, should provide personal information to others. Before you reveal any personally identifying information, find out how it will be used and whether it will be shared with others . Ask for their specific policies about sharing information. Can you choose to have it kept confidential? Order a copy of your credit report from each of the three major credit reporting agencies every year . Make sure that it’s accurate and includes only those accounts and credit transactions that you’ve authorized. One credit report per year is free from each of the major credit bureaus for New Jersey residents. A credit file request form is available on the Rutgers Cooperative Extension MONEY 2000 Web site at www.rce.rutgers.edu/money2000 .
By law, in New Jersey, you are able to receive one free copy of your credit report from each of the three major credit reporting agencies every year. Free reports are also available for identity fraud victims, persons on welfare, and the unemployed. Otherwise, the law allows credit bureaus to charge you up to $8.50 for a copy of your credit report. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills , who has made inquiries about you over the past two years, and whether you’ve been sued, arrested or you have filed for bankruptcy. Checking your report on a regular basis can help you catch mistakes and fraud before they destroy your credit rating. Take advantage of your rights as a consumer and order by mail, phone, or Internet your free credit report from each of the three major credit bureaus -- Equifax, Experian (formerly TRW), and Trans Union. Equifax -- www.equifax.com -- To order your report, call: 800-685-1111or write: PO Box 740241, Atlanta, GA 30374-0241. To report fraud, call: 800-525-6285 and write: PO Box 740241, Atlanta, GA 30364-0241 Experian -- www.experian.com -- To order your report call: 888-EXPERIAN (397-3742) or write: PO Box 2104, Allen TX 75013. To report fraud, call 888-EXPERIAN (397-3742) and write: PO Box 9532, Allen TX 75013 Trans Union -- www.tuc.com -- To order your report, call: 800-916-8800 or write: PO Box 1000, Chester, PA 19022. To report fraud, call: 800-680-7289 and write Fraud Victim Assistance Division, PO Box 6790, Fullerton, CA 92634
It is possible that an identity thief can strike even though you’ve been very careful about keeping your personal information protected. If you suspect that your personal information has been stolen and used to commit fraud or theft, take action immediately, and keep a record of your conversations and correspondence. The steps you should take to protect yourself will depend on your situation and how your identity has been misused. However, the Federal Trade Commission (FTC) states that three basic actions are appropriate in almost every case: First, contact the fraud departments of each of the three major credit bureaus. -- Tell them that you’re an identity theft victim. Ask them to place a “fraud alert” in your file, as well as a victim’s statement asking that all creditors call you before opening any new accounts or changing your existing accounts. This can hinder an identity thief from opening more accounts in your name. At the same time, order copies of your credit reports from the three credit bureaus. Credit bureaus must give you a free copy of your report if your report is inaccurate because of fraud, and you ask for it in writing . Go over your reports with a fine tooth comb to make sure no additional illegal accounts have been opened in your name or unauthorized changes made to your existing accounts. Also, check the section of your report that lists “inquiries.” Where these “inquiries” appear from the company(ies) that opened the fraudulent account(s), ask that these “inquiries” be removed from your report. In a few months, order new copies of your reports to verify your corrections and changes, and to make sure no new fraudulent activity has occurred. Second, contact creditors for any accounts that have unauthorized fraudulent activity or have been opened illegally, both by telephone and in writing. Close accounts that have been tampered with and open new ones with new Personal Identification Numbers (PINs) and passwords. Third, file a report with your local police or police in the community where the identity theft took place. Secure a copy of the police report in case the bank, credit card company, or others need proof of the crime. Even if the police can’t prosecute the identity thief in your case, having a copy of the police report can assist you when dealing with creditors.
To minimize the amount of information a thief can steal, do not carry extra credit cards, your Social Security card, a birth certificate or a passport in your wallet or purse, except when needed . To reduce the amount of personal information that is “out there,” consider removing your name from the marketing lists of the three credit reporting bureaus . This will limit the number of pre-approved offers of credit that your receive. * Sign up for the Direct marketing Association’s Mail Preference Service and the Telephone Preference Service . Your name is added to computerized name deletion lists used by nationwide marketers. * Have your name and address removed from the phone book and reverse directories (i.e., directories that list people by their addresses rather than their names). * Don’t put your Social Security number on checks . Ask your financial institution to add extra security protection to your account. Most will allow you to use an additional code (a number or word) when accessing our account. If you become a victim of identity theft, report the crime to the police immediately . Give them as much documented evidence as possible, and get a copy of the police report. Credit card issuers, banks, and the insurance company may require you to show the report in order to verify the crime. Then report your case to the federal authorities. The Federal Trade Commission has a special identity theft hotline to provide information to consumers and take complaints from victims by phone (1-877-438-4338) or online (www.consumer.gov/idtheft). As soon as possible, call the fraud units of the three major credit bureaus . Ask to have a fraud alert placed on your credit report -- this will let companies know that someone else has been using your information and that you wish to be informed by phone before any new credit is granted. Close the accounts and get replacement cards with new account numbers.
To understand what actions consumers are taking to reduce the risk of identity theft
Data collected from an online self-assessment tool (sample bias)
20 questions; 1 (never) to 5 (always)
Higher score: more frequent use of risk reduction practices
Data from 287 respondents in 2003
Web Site Address For The Online Identity Theft Quiz www.rce.rutgers.edu/money/identitytheft/default.asp The online quiz provides both personalized feedback to users and a database for ongoing research