Protecting Yourself from Identity Theft
The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year. Victims pay $8,000 each, on average, to have their identities recovered. Educating yourself about Identity Theft is your best defense against becoming a victim.
What Is Identity Theft?
Identity theft occurs when a person's personal identifying information is stolen and used fraudulently. This may include your name, Social Security number, birthdate, driver's license number, banking account information, or credit card account number. Thieves will then use this information to steal from or charge to your accounts, open new accounts in your name, or even worse, create a new identity as you to obtain a car, a home, or even a job. The financial and emotional effects on you, the victim, can last for months, even years.
How Thieves Steal Your Identity
Never underestimate the creativity of thieves. The scams and techniques they deploy are almost endless, ranging from simple means like sorting through your trash to high-tech schemes that entail constructing elaborate but fictitious websites. Here are just a few of the ways that identity theft occurs:
- Mailbox theft. Identity thieves steal pre-approved credit card offers or stock brokerage, bank and credit card statements, tax information, and other documents containing your personal information from your mailbox. This is particularly common after year-end when such documents are routinely mailed.
- Change of address. Criminals file a change of address form with the Post Office and divert your mail to another location to steal your personal information.
- Bogus charitable appeals. A person calls you, claims to be affiliated with a reputable charity, and requests a donation for a worthy cause, which requires your credit card and other personal information. Seniors and the infirmed are vulnerable to these "appeals."
- Refinance now. A bank or refinance company calls and asks if you want to refinance your home to get a great rate. You're asked some innocent questions to get you used to answering and then they ask for your Social Security number so they can check your credit in order to get you the "most favorable refinance rate."
- Skimming. A waiter at a restaurant or service person at a business where you are making a credit card purchase passes your credit card through a small electronic device which copies the magnetic strip and other details. These are transferred on to a machine which copies the details on to a fake card.
- The government guise. An identity thief posing as the IRS mails you an official looking IRS form that you're asked to complete and return with your personal information so they can process your refund.
- Your husband has a problem. Thieves call you during the day posing as a credit card issuer. They inform you that "your husband's payment is overdue." Playing on your guilt and surprise, they request personal information in order to resolve his "problem."
- We owe you money. You get a phone call notifying you that you are entitled to a significant tax refund; they just need your credit card number to charge the nominal shipping expense and your Social Security number to confirm the refund amount.
Phishing by e-mail. You get an e-mail from your Internet Service Provider (ISP) offering to upgrade your service. The e-mail has a link to a website that looks and feels exactly like those your ISP uses. You're asked to enter your personal information to receive the upgraded service. Identity thieves then use your data to open new accounts and make purchases.
Trash pick-up. You conscientiously place your trash by the curb the night before pickup. Identity thieves posing as people out for an evening stroll go through your trash and remove documents with your personal information.
Credit check. Posing as your employer, landlord, or someone else with a legitimate reason, identity thieves request forms with your records to supply your Social Security number or other personal information.
- Inside job. An employee in Human Resources or Payroll with access to your personal information agrees to sell it to identity thieves who use it to create a new you and new accounts in your name at another address.
- Cleaning up. Domestic help or contractors enter your home with your permission and collect Social Security numbers and other information from documents you've left out unsecured. Dishonest neighbors and even family members that might be invited in have also resorted to this tactic.
- Hacking around. Identity thieves hack websites containing your personal information or account numbers, like catalog companies, and use it to create new accounts.
- Free checking. Thieves steal bill payments you've deposited in an outside mailbox, and learn your name, address, account numbers, and even how you sign your checks. Then they open a new account elsewhere and have statements sent to another address.
- Shoulder surfing. Thieves watch from a nearby location as you punch your telephone calling card or credit card information into a telephone or computer.
- Doing your taxes. Identity thieves file a tax return in your name using information they have stolen and have your refund check sent to them.
Safeguard Yourself Against Identity Theft
In this electronic age, your personal information is everywhere and easily accessible. No one can guarantee that you will never be a victim of identity theft but you can reduce your risk. By managing your personal information wisely, being aware of threats, and educating yourself, you can help guard against identity theft. Here are ten simple steps you can take to reduce the risk of your information being stolen and misused.
- Order your credit report. Order your credit report each year from each of the three major credit reporting agencies (see below). Check each report for accuracy including your name, address, and Social Security number, and for indications of fraud such as:
Guard your Social Security number.
Your Social Security number is often used by companies and businesses as an identifier. Whenever possible, avoid this practice and keep your Social Security number locked away in a safe place. Don't write or have your number printed on your checks. Finally, check your Social Security Earnings and Benefits statement each year to ensure no one is using your number for employment.
Protect your mail from theft. If possible, use a locked mailbox and mail outgoing bills from post office collection boxes rather than an unsecured mail box. Ask your post office to hold your mail when you are away. Monitor your billing cycles and keep track of incoming mail, particularly tax forms, pay stubs, credit card bills, and bank statements. If it's an option, receive these documents electronically by e-mail, or retrieve them online. Pick up new checks at the bank rather than having them sent to your home mailbox.
Destroy documents before disposal. Tear, or better yet, shred your charge and ATM receipts, copies of credit applications, insurance forms, physician statements, checks and bank statements. Also, destroy expired credits cards and convenience checks or credit offers you get in the mail. If you do not want mailed credit offers, contact the three major credit reporting agencies and have your credit report marked "no solicitation."
Shop online with caution. Designate one distinct credit card with a low limit for online shopping. Never use a debit card. Make sure the website is a secure site that complies with industry security standards before you provide any credit information. To determine if a site is safe, look for the "lock" symbols in the status bar at the bottom of your browser window and the words "Secure Sockets Layer" or the acronym "SSL" in the merchant's privacy statement. Never send payment information via e-mail.
Practice Safe Computing. Update your virus protection software regularly. Download and install security patches for your operating system or browser. Use a firewall program, especially if you use a high-speed Internet connection like cable, DSL or T-1, which leaves your computer connected to the Internet 24 hours a day. The firewall program will help prevent persons from accessing your computer and your personal information. Before disposing of a computer use a "wipe" utility program to overwrite the entire hard drive and make files with personal information unrecoverable. Never store personal information on a laptop computer, which is more easily stolen.
Choose PINs carefully. Do not use any part of your Social Security number as a Personal Identification Number (PIN). Avoid using "easy-to-guess" PINs such as your birth date, pet's name, mother's maiden name, address, telephone number, or consecutive numbers. Memorize all PINs and do not write them down. Finally, shield the PIN pad when you are entering the number in a retail establishment or at an ATM to prevent others from observing your PIN.
Lock up important documents. Keep all documents with personal or account information under lock and key in your home. Don't leave them unsecured and accessible to visitors. Always keep your purse or wallet in a safe place at work, preferably a locked drawer. Carry only those cards you need.
Record your credit and bank account information. Make a list of, or photocopy, all of your credit and debit cards, including the account number, expiration date, credit limit and the telephone numbers of customer service and fraud departments. Safeguard these lists; if one of your cards is stolen, you can contact card issuers and banks faster with the right information. Make a similar list for your bank accounts.
Don't take that call. Don't give out personal information on the phone, through the mail, or over the Internet unless you initiated the contact. Identity thieves may pose as representatives of mortgage companies, banks, credit card companies, Internet Service Providers, and even government agencies to get you to reveal your personal information.
- credit accounts that you did not open
- applications for credit that you did not complete
- credit inquiries that you did not make
- charges you did not authorize
- delinquencies that you did not cause.
Ordering Your Credit Report from Major Credit Reporting Agencies
Regular periodic review of your credit report is an essential step in protecting your identity. We recommend that you order your credit report from each credit reporting agency once a year. It is best to alternate your requests between different reporting agencies every four months, rather than obtain all reports at once. This will help you detect problems through the course of the year.
Annualcreditreport.com is a website which allows you to request a free* credit report once every 12 months from each of the nationwide consumer credit reporting companies:
*Eligibility for an annual free credit report is determined by your state of residence based on the rollout schedule set by federal law. The website lists when a free credit report becomes available in your state.
For more information on Identity Theft, visit the Federal Trade Commission website at www.ftc.gov.