Benjamin Franklin is often credited with the quote “an ounce of prevention is worth a pound of cure” and in colonial times he wouldn’t have been faulted for that sentiment. But in today’s Internet Age of email, online banking applications, credit card transactions, personal data breaches and a host of scams that old Ben could never dreamed of – an ounce of prevention doesn’t go very far when attempting to avoid the ever-increasing threat of identity theft that we all face on a daily basis. In this article we’ll review and detail the perils that unsuspecting consumers face and we’ll show you how best to avoid becoming a victim of identity theft without disconnecting your telephone, moving into a cave, cutting up all of your credit cards, shredding your ATM/debit cards, or picking up your mail at the local post office.
Identity Theft Defined
Identity theft is broadly thought of by most people as a fraud where someone obtains a piece of your personal information and uses it to steal something of value from you. The Federal Bureau of Investigation , FBI, provides the following, more detailed definition – which in part explains why identity theft has grown so quickly and can be very lucrative for criminals. Hint: it’s not just about separating you from the cash in your pocket. “Identity theft involves the misuse of another individual’s personal identifying information for fraudulent purposes. It is almost always committed to facilitate other crimes, such as credit card fraud, mortgage fraud, and check fraud. Personal identifying information, such as name, Social Security number, date of birth and bank account number is extremely valuable to an identity thief.”
Types of Identity Theft
The different types of identity theft is what makes it so difficult to guard yourself and family from being victimized by well-informed criminals. The Federal Trade Commission (FTC) serves as the government’s lead agency for collecting complaints and coordinating efforts to combat identity theft. The most recent survey from the FTC highlights the most common types of identity theft and the way in which consumers learn that they have become another identity theft statistic.
While financial crime remains the main driver of identity theft, an increasing number of non-financial identity thefts involving driver’s licenses, firearm identification, and even business licenses have become frequently reported. These general identity thefts have caught the attention of U.S. Homeland Security (DHS) because document fraud involving identity can be a cover for terrorism or other public safety concerns. The DHS has partnered with the FBI, FTC and other state and federal agencies to intervene and disrupt identity theft activities, both in the U.S. and abroad where many of the most elaborate schemes originate.
When consumers learn that they have fallen victim to identity theft they learn of their misfortune in several ways. This learning process is one of most important tools for understanding and preventing identity theft.
Consumers learn of identity theft on their own – when they review their credit report, apply for credit or a job, monitor their account online, or receive a bill in the mail – nearly fifty-five percent of the time. The remaining forty-five percent of the time they are notified by their creditor, a credit monitoring service(paid), a debt collector or other means – often law enforcement investigating another victim. Clearly, checking your own credit report and reviewing your credit card, bank statements, mortgage records, and medical insurance bills can help prevent identity theft.
Know your Credit Report
One important resource is AnnualCreditReport.com which is a service that the three major credit-reporting firms; Trans Union, Experian, and Equifax have created to provide a free copy of all three firms credit files to consumers once a year for free. This single effort will in most situations identify any errors or frauds on your credit report. You can then investigate further with each creditor and contact law enforcement if necessary. If you should determine that a fraud has occurred you have options as to how you can best address the issue. The American Association of Retired Persons (AARP) has developed a recommended procedure for blocking or “freezing” access to your credit report details and credit score. Only your existing creditors will be able to access your credit file. This will defeat any attempt to review your credit history or to open any account in your name based upon your social security number. Since you social security number is the key to your credit record, no one will be able to steal your identity even if they possess credit card information or your actual social security number.
Don’t give out your Social Security Number
This brings us to a very important matter when it comes to preventing identity theft. Your social security number is the single most valuable asset you have and the most important tool you can use to prevent identity theft. Never give out your number to anyone. Never carry your card with you in your purse or wallet. If you should receive a call from any creditor who asks for your number, hang up immediately. They should already know at least the last four digits. Ask them to send their request to you in writing at the address that they have in their files. The Social Security Administration (SSA) has an excellent program for managing and safeguarding your number. While the most common use of your number is for your credit report, it also is the key identifier for your Social Security retirement and disability benefits. The SSA recommends that you review your annual statement for any errors or indication of fraud. Types of fraud may include benefits being paid to someone other than you or taxes being paid into your retirement account by someone else may reveal that someone is using your number with another employer in a fraudulent manner. All of which can negatively impact your benefits.
As we just mentioned your social security number is the key identifier for you taxes and the Internal Revenue Service (IRS) provides useful guidance on the topic of identity theft and how to prevent it. The fraudulent use of your social security number (also referred to as your taxpayer ID) may result in unpaid taxes, fines, late fees and levies against your bank accounts or property. The IRS is aware of many scams designed to lure consumers into providing their taxpayer ID to criminals attempting to steal identities. The IRS will never contact a consumer by email and any contact by telephone or mail can be verified by calling the regional IRS office to confirm the contact.
Old Time Methods for Identity Theft
The internet has not put an end to the “old school” methods of getting personal data for identity thieves. In fact, the “tried and true” of identity theft remain in constant use and information from the Privacy Rights Clearinghouse (PRC) now sheds more light on these “favorite” tools of the trade.
Source: Privacy Rights Clearinghouse
One of the technology-dependent scams involves a tool called “phishing”. Phishing essentially employs email and a website that the email directs unsuspecting consumers to for the purpose of confirming information about an existing account or giving personal information in the form of a survey or contest or sweepstakes entry form online. Scammers piece together this information to steal identities and commit larger frauds. One group that focuses on educating online consumers to the dangers posed by the internet and email is the Anti-Phishing Working Group (APWG). They provide many resources for individuals and businesses to prevent and combat identity theft efforts by criminals and organized groups on the internet. It appears from the data that the FTC has provided that identity theft occurs in greater numbers in the age groups 19 to 59. Many analysts feel that this is due to the large number of consumers in this age group who use the internet for email, bill-paying, online purchases and general surfing that leads to encounters with cyber-thieves and fraudsters. The other age groups do not suffer the same rate of victimization and this may be due in part to lower internet use.
One of the last remaining tools of identity theft that can be prevented to some extent is mailbox theft of credit cards, bank statements, employment records or retirement information. The U.S. Postal Inspective Service (USPIS) is charged by the U.S. Postal Service to investigate mail theft and mail fraud. While there are many data points that support the prevalence of mail theft and fraud in certain geographic areas, the FTC data indicates that the Top Ten states for identity theft, regardless of mail theft or online theft include some of the most populated states.
In summary, the best way to prevent identity theft is to become informed and educated. This article has highlighted many tips and provided valuable links to resources that will help you protect yourself and your family.
Take the time to use this information and you’ll save yourself a lot of aggravation over the longer-term. Many victims of identity theft never learn how their personal information was obtained by thieves. If you follow the guidance above, you’ll never have to learn the hard way what you should have done differently.