What is ID Theft?
Identity theft is when somebody steals and uses your personal information for financial gain. They can pose as you to open bank accounts and apply for loans or mortgages, purchase goods using your stolen credit card, and drain your financial accounts using stolen PIN numbers. You are left on the hook to pay back the loans they defaulted on, and with your credit score demolished, banks and insurance companies will turn down any application you give them. You may not even know that somebody stole your identity until creditors phone demanding goods you never bought, or worse, the police arrest you for bank fraud.
According to the Better Business Bureau, nearly 10 million Americans are victims of identity theft every year, costing nearly $50 billion to victims and businesses. It also costs an individual about $600 each to clear their name. Fortunately, strong laws are now in place making this a crime, but nothing can repair the feeling of your privacy being invaded.
How Do Thieves Steal My Data?
Any piece of personal data can be used as fraud, if passed into the wrong hands. There are a variety of ways to do this, and thieves are coming up with more sophisticated methods. The most common ways include:
- Dumpster Diving - Thieves can find your credit card number, account statements and your address and phone number by sifting through your trash or the trash of businesses you deal with. Note that this is NOT illegal, as anything you throw out is legally in the public domain.
- Steal Your Wallet or Purse - The good old traditional method of snatching your purse or picking your pocket, except now your ID cards and driver’s license is worth a lot more than the cash you hold.
- Break and Enter - Gone are the days where you had to buy a new t.v. after a thief stole your old one. Now they look for your Social Security number and steal your computer to unlock your saved passwords.
- Eavsdropping - If you give your credit card number over the phone in a public place, a stranger may jot down your number.
- Shoulder Surfing - A stranger will look over your shoulder, memorize the account on your card, and watch you punching in your P.I.N. number. Criminal organizations can then manufacture your bank card without having to steal it, and quickly drain your account.
- Skimming - High tech thieves place fake covers over an Interact or bank machine and record all the information on swiped cards.
Online Theft
The internet is another opportunity to steal your information. Though there is a lot of publicity surrounding theft on the web, online fraud is actually only 10% of total identity thefts committed. The most common scams include:
- Phishing - Devious emails and websites pose as your trusted financial institution. When you click a link on the email, you are taken to a fraudulent website that looks exactly like your financial institution. The thief captures your login and password when you enter it on the website. Emails purporting to be from Ebay or Paypal and asking to login to confirm your security information are common methods.
- Trojan Horses - A trojan horse is a computer virus that silently records your keystrokes and follows your browsing, waiting for the opportunity for you to key your credit card information into an e-commerce site or a login and password into a financial institution. That information is then secretly sent to a criminal’s computer and sold on the black market.
What Does a Thief Do With My Information?
Once someone has enough personal information on you, the thief can assume your identity and open bank accounts in your name, buy vehicles on credit, submit loan and credit card applications, and even buy houses. All information is sent to the criminal’s address, so you may not even know you’re a victim until you are denied a loan application due to non-payment of bills or a creditor manages to track down your real address.
By then, the thief will probably be long gone, leaving you the grief of repairing your reputation and financial credit.
So, how Do I Protect Myself?
The good news is, there are some very easy ways to protect yourself. Along with everyday practices to keep your information secure, there are also companies who specialize in protecting you, such as credit monitoring agencies like Identity Guard, and identity theft protection companies like Lifelock. A free way to see if anybody is using your information to commit fraud is ordering free credit reports from the three major credit bureaus in the country to make sure there is no unusual activity in your score. If there is, you’ll have to take appropriate actions.
