Articles: Business-to-Consumer
Consumer-Advice Articles - Personal Finance
How to Protect Yourself from Identity
Theft
It’s the Nation’s Fastest-Growing Crime – and it Costs Billions
of Dollars Annually – But You Can Take Steps to Protect Yourself,
Says a Banking Professional
Chances are good that you’ve heard of identity theft. It’s the
act of someone stealing another person’s identification, personal
or financial data – Social Security number, birth date, credit
cards, etc. – and using the information to fraudulently open
or use credit card or bank accounts, take out loans, establish
wireless service or even buy a car, leaving the victim on the
hook for the debt and a world of related troubles.
What you may not know is just how prevalent, costly and pernicious
identity fraud has become. It is easily the fastest-growing crime
in America, and the numbers are staggering. By the latest estimates,
identity fraud affects 900,000 Americans each year – that’s almost
2,500 per day, or one every 35 seconds. The costs are even more
astronomical: in 2000, Visa and MasterCard reported domestic
fraud losses of more than $1 billion, a 45 percent increase since
1996.
That doesn’t even begin to factor in the costs incurred by federal,
state and local law enforcement, government agencies, banks and
other financial companies to combat identity fraud. Nor does
it consider the personal toll of lost wages, time, materials
and anguish that victims pay.
High Personal Cost
Indeed, it is the very real – and very high – cost to the victims
of identity fraud that should serve as the cautionary tale and
motivation to all of us to protect our identity and financial
information by all means available. That toll can include being
denied a mortgage or other financial services, bouncing checks,
finding your accounts drained, having credit card or other credit
applications rejected, having your cards rejected when you try
to use them, being harassed by debt-collection agencies – and
even being falsely arrested and jailed.
Victims interviewed for a recent General Accounting Office (GAO)
report on the prevalence and cost of identity theft also expressed
feelings of “invaded privacy,” “continuing trauma,” feeling “personally
violated,” and a “lack of closure.”
The latter owing to the well-documented fact that law-enforcement
efforts to pursue identity-theft claims remain woefully inadequate.
In fact, another GAO report released in June is titled, “Identity
Theft: Greater Awareness and Use of Data are Needed.” The findings
in this report leave little doubt that if you don’t protect yourself
against identity theft, your recourse through the justice system
is limited at best.
The report states: “…because identity theft is still a ‘nontraditional’
crime, some police departments may be unaware of the importance
of taking reports of identity theft, much less initiating investigations….the
number of investigators and prosecutors for addressing identity
theft often is insufficient. Further…because many identity theft
cases present multi- or cross-jurisdictional issues – such as
when a perpetrator steals personal information in one city and
uses the information to conduct fraudulent activities in another
city or state – law enforcement agencies sometimes tend to view
identity theft as being ‘someone else’s problem.’”
How Identity Theft Can Occur
Think for
a moment about how much personal and financial identifying information
you provide to employers and governmental agencies, how much
you carry with you and keep in your home, how much arrives
in your mailbox (credit card offers and bills, medical information)
and how much you disseminate on a daily basis (writing a check,
making a credit card purchase, using a personal identification
number at an ATM or when making a debit card purchase, making
a purchase on the Internet).
Our lives are awash in identity information, and thieves’ attempts
to get at it range from clunky to sophisticated. Understanding
some of their methods can help you better understand some of
the steps you can take to protect yourself (listed below). Identity
thieves:
- rummage through your trash, or the trash at businesses, seeking
personal data.
- steal your mail, looking for pre-approved credit card offers,
bank and credit card statements, tax information, phone cards,
etc. They also steal your outgoing mail, looking for the same
kinds of information.
- look over your shoulder at an ATM or merchant terminal to
steal your PIN, known as “shoulder surfing.”
- steal your purse or wallet (sometimes even at work – “office
creepers” often target easily accessible high-rises and other
workplaces).
- steal your information from your home (not necessarily burglars,
but cleaning and repair workers whom you have brought into
your home).
- fraudulently obtain your credit report by posing as someone
who might have a legitimate right to the information (your
employer, landlord, etc.).
- complete a change-of-address form to divert your mail.
- hack into your computer to steal information off your hard
drive or from Internet transactions.
- buy your information from a store clerk or someone else they
can pay off for access.
How to Protect Yourself
Fortunately,
there are a number of steps you can – and should – take to protect yourself
from identity theft. The following Top 15 Strategies is by no means a comprehensive
list, but it provides concrete, useful steps that might spark even more ideas
for self-protection.
- Keep tabs on your credit report. Any unauthorized
or unrecognized activity might be an indication of fraud, or
attempted fraud. The three main credit bureaus – Equifax (www.equifax.com,
1-800-685-1111); Experian (www.experian.com,
1-888-397-3742); and TransUnion (www.transunion.com,
1-800-916-8800 – typically charge $9 for a report. However,
some state laws allow their residents to get the reports at
a reduced rate, or even free; check with the agencies to determine
your cost.
Most consumer advocates advise checking your credit
report once or twice a year. But identity theft can happen
so quickly that your finances may be devastated by the time
you discover you are a victim of identity fraud.
Many banks nowadays (including Fifth Third) offer an identity
theft protection service to their customers. These services typically
cost about $9 to $10 per month and automatically check your credit
report every day, alerting you to any new activity (so you can
immediately discover and deal with attempted fraud). These services
typically provide additional benefits as well, such as ID theft
insurance, credit and debit card registry, financial advice and
fraud counseling services, among others.
- Lock up all the personal information in your home in
a file cabinet or fire safe, especially if you employ anyone
who works inside your home (cleaners, maintenance personnel,
etc.) or have a roommate.
- Shred all your financial and identifying documents –
pre-approved credit card offers you’re not accepting, debit
and credit card receipts, old checks and bank statements, insurance
and doctor’s forms – and cut up expired credit cards. Always
save and shred your ATM, debit and charge receipts; never throw
them away in a public trash can.
- Protect your mail. Never leave your outgoing
mail in an unsecured mailbox for pickup. Instead, drop it in
a post office collection box or at your local post office.
Also, pick up your mail promptly after it is delivered. And,
if you’ll be out of town, always have a trusted neighbor pick
up your mail for you, or call the U.S. Postal Service at 1-800-275-8777
to request a vacation hold.
Also, keep track of your billing
cycles; know when to expect delivery of your regular monthly
bills. If they don’t arrive on time, call your creditors. It
could mean an identity thief has taken over your account or
filled out a change-of-address form to divert your mail.
- Beware of callers or e-mailers asking for personal
information. Never give out personal or financial
information by mail, over the phone or on the Internet unless
you initiated the transaction and can verify with whom you’re
dealing. Common scams by identity thieves include calling
or e-mailing victims posing as their bank, Internet service
provider or a government agency and asking to “verify” or
“update account information.” They might ask for your Social
Security number (SSN), mother’s maiden name, account numbers,
etc. DON’T give them anything.
- Protect your SSN. Don’t carry your Social
Security card in your wallet or purse. Keep it locked up instead.
Only provide your SSN when it’s absolutely necessary; ask if
you can use another form of ID instead. And never use your
SSN as your driver’s license number; let the state assign you
a randomly generated number instead.
Your Social Security number
is, in effect, your cornerstone piece of personal information.
With it and minimal other information about you, an identity
thief can wreak havoc.
- Carry only the debit, credit and phone cards that
you use on a regular basis. Keep the rest locked
up at home; only carry them with you when you know you will
be using them that day. Never carry a large portfolio with
all your credit and other cards; if you lost it, it could
be a goldmine for an identity thief.
- Choose PINs or passwords wisely. Select
a PIN for your cards and accounts that could not be easily
figured out if your purse or wallet is stolen. Don’t use your
birthday, address, telephone number, Social Security Number,
etc., for your PIN. And avoid using your mother’s maiden name
as a password; ask if you can use something else instead.
- Protect your valuables at work, just as you would
at home. Never leave your purse or wallet unattended
in the workplace; lock it up if you’ll be away from your
work space for any length of time. Also lock up your insurance,
pension or other investment information you might keep at
work.
- Keep your computer’s virus-protection software and
operating system updated. Most virus-protection
software nowadays can be set to update itself automatically.
The current version of Windows, the most popular operating
system, also can be set to update itself. If yours are older,
getting into the habit of updating once a week is a good
idea. Keeping both your operating system and virus protection
current is vital, since most hackers and viruses attempt
to exploit weaknesses in operating system, browser and Internet
security, and the most widely used e-mail programs.
- Ensure that your Internet transactions are secure. If
you keep your system software updated, you’ll be using the
latest browser version available. When making a purchase, checking
your bank account online or performing some other financial
transaction, always look for the small yellow padlock icon
on the bottom of your screen, and check to see if the Internet
address in your browser has changed from http: to https: (secure).
Both are signals that your transmission is being encrypted
and is secure. If you don’t see at least one of these, don’t
input any of your sensitive information.
- Check out Web site privacy policies. Nearly
all reputable transactional Web sites today list their privacy
policy, which details how the information you provide them
will be used. Sites typically will allow you to opt out of
receiving marketing-type inquiries, and will clearly state
the proscriptions on using your information.
- Don’t download files, or click on links, sent by
unknown sources. Again, these are typical virus-transmission
ploys. Simply delete the files or the e-mails containing
such links.
- Use a password to log into your computer. Do
this both at home and at work. Do not use an automatic log-in
that either requires no password or saves your password and
automatically inputs it. Change the password regularly, and
don’t even write it down (let alone tape it to your drawer
or pin it to your bulletin board). Always log out when you’re
finished with the computer.
- Keep sensitive data off your computer; wipe the drive
if you’re disposing of it. Don’t store your SSN,
birth date, account numbers or other information on your
computer – especially if it’s a laptop. If you’re disposing
of your computer or donating it, first delete any sensitive
information, then use a “wipe” utility, which overwrites
your hard drive, leaving no trace of the information previously
on the drive.
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