As we come to rely more and more on the Internet and credit cards to pay bills, shop online, and to engage in other financial transactions, the threat of identity theft and fraud becomes a more pressing issue. At the same time, it is important to keep things in perspective. According the FTC, identity theft affects about 9 million Americans every year. Although this seems like a huge number, identity theft affects about 3% of the population in the United States. According to the U.S. Census Bureau, the current population of the United States is 315,202,646. Nevertheless, identity theft and fraud has serious and negative consequences for individuals who are unfortunate enough to fall victim to it.
Even though only 3% of the population is affected by identity theft, almost everyone is a potential victim. Identity theft takes many forms ranging from credit card theft, stolen passwords and login names, stolen Social Security numbers, to name a few. One of the other dangerous aspects of identity theft is that the victim is usually not aware that his or her identity has been stolen until well after the fact. The time delay in recognizing theft compounds the problem. Serious damage to an individual’s credit, financial resources, and good name can occur before an individual is aware his identity has been stolen.
Concerns over identity theft and fraud has led some companies and financial institutions to provide Identity Theft Insurance to their employees, however, this does not come free of charge. While identity thieves can be sophisticated and tricky, there are a number of things individuals can do to protect themselves. Some of the preventive measures are simple common sense.
What Do Identity Thieves Do With the Information?
Identity thieves use your personal information in a variety of ways. The bottom line is that they profit from it and you are the one that foots the bill. Some of the typical activities identity thieves engage in with stolen information include the following.
- (1) Open a new credit card account in your name. You are left with the bills.
- (2) Open up a new telephone or utility account in your name.
- (3) Engage in banking or financial fraud. This may involve making counterfeit checks using your name and account number; cloning your ATM card and make withdrawal, or taking a loan out in your name
- (4) Engage in government fraud. This ranges form making a fake driver’s license or a fake ID card in your name to receiving Social Security benefits in your name.
- (5) Using your identity to rent a house or to pay for medical services.
How to Prevent Identity Theft
The first step in protecting yourself against identity theft is to understand the basic techniques that thieves use to steal your identity and personal information. Identity thieves utilize a number of approaches, from high-tech to traditional thievery and everything in between, to steal an individual’s personal and financial information. Here are a few important steps to greatly reduce your risk of becoming a victim of identity theft.
- (1) Don’t simply throw personal information in the trash. Identity thieves rummage through trash and dumpsters to find information. Shred bills, receipts, and band statements. It is also important to shred pre-approved credit card offers and similar solicitations.
- (2) Don’t be tricked by fraudulent offers from financial institutions, cell phone companies. This particular form of fraudulent practice is referred as “Phishing,” Identity thieves are simply trying to trick an individual into revealing personal information such as Social Security numbers, account number, or password information.
- (3) Invest in a locking mailbox. Identity thieves are just as interested in traditional mail as in electronic mail. Thieves will steal important information directly from the mailbox.
- (4) Monitor your bank accounts and financial information. Financial diligence is essential for catching a thief at work before it gets worse. Many victims are nor aware of a problem until a loan is denied or the get a call from a debt collection agency. Monitor your monthly statements. Look for unusual transactions. Immediately report unauthorized withdrawals to your bank. Always keep your checkbooks and credit cards safe and secure.
- (5) Pay attention to red flags and warning signals. If your email or mailing address has been changed, contact the sender. A common practice is to divert the victim’s mail by filling out change of address forms.
- (6) Use strong/unique passwords. Use a different password for every account. Don’t use information such as a maiden name, birthday, telephone number, street address. This information is easily accessible. The password should contain at least right characters; a combination of lowercase, uppercase letters, numbers and symbols. Never save passwords or login usernames on computers. It should go without saying that this is a major no-no on a public computer but, the same cautions should be taken with laptops and home computers. Security experts recommend changing logins and passwords on a monthly basis
- (7) Be careful with online information. Online shopping is convenient and, in many cases, a more economical. Online shopping, however, also greatly raises the risk of identity theft or fraud. Identity thieves are always on the lookout to nab passwords and account numbers.
- (8) Keep the anti-virus and anti-spyware software up-to-date.
It is easy to become lazy or complacent with personal information. Most of us take for granted that our homes are relatively safe. The sad truth is that many identity thieves actually know their victims. Don’t tempt potential identity thieves with personal information you leave laying around the home or on your home computer.