| If you wanted to pretend you were me, what would it take to fool my devastatingly gorgeous girlfriend? Well, you'd need to learn to walk, talk, and look like me. Plus you'd need plastic surgery to web up your toes like mine (my grandmother said I'd never drown!). And you'd have to be a good kisser. It would take some effort. But if you wanted to convince my bank that you were me, it wouldn't be quite as difficult. You'd need my wallet, my address, a good forged driver's license, and certainly the ability to sign like me. It would be an easier impersonation, but still would take some effort. But what if you had my online banking user ID and password and an Internet connection? You could log on to the Web as if you were me and then it would be bye-bye savings account and the $637.34 in it. That's what's called simple identity theft . You obtain the electronic keys to my digital piggybank, smash it open , and disappear into the bits and bytes flowing across the Internet. But identity theft can be more complex. It's not always just a smash and grab proposition. It starts with a thief obtaining your personal information, such as your name , Social Security number, credit card numbers , or other identifying information. They then get financial and identity tools issued to them in your name, including bank accounts, checks, and even government-issued documents. Think of it as creating a clone of a person's paper trail. A crook can then apply for credit and nurture and protect the accounts, perhaps even making small payments to generate more credit. They might do this over the course of two to three years to generate a decent credit portfolio. The big pay off comes when they cash out, making a purchase worth $20,000 to $100,000 and then disappear, leaving you on the hook to pay off the debt and deal with a devastated credit history. Some identity theft basics are discussed next . Later in the chapter, specific technology threats that impact identity theft are covered. Techniques Thieves Use to Steal Your Identity Identity thieves use a myriad techniques to steal your identity. To start, all they need is some initial seed information to build on. Think about the kind of information organizations ask you for when you apply for anything: perhaps a membership, say with your health club; a financial tool such as a credit card or bank account; or even an entry for a contest. The basics would be your name, address, and phone number. While this information can be publicly available to anyone who cares to look, you become vulnerable when a potential identity thief can pair it with more detailed information about you. Your birth date might be common knowledge among your friends and family but no one else needs to know. Be careful about providing any piece of identification or information that wouldn't be listed publicly. After a thief has gathered the basics on you and has one critical identity tool, such as a driver's license number or Social Security number, they can then use that to research more information about you and create an identity document. What they do is build a portfolio on you until they have enough information to apply for a credit or financial tool in your name. After they have that, all they need to do is use the tool and nurture it. They'll make deposits and withdrawals in an account. Or use a credit card to make modest payments and pay off the balance. This can go on for months. Slowly they build up creditworthiness that allows them to apply for more credit. The endgame is to create such a large credit facility that they can cash out. They'll extract the most money they can out of the credit tools they have nurtured and leave you on the hook. When the credit-offering organization attempts to collect, they will come to you and not the thief because by their records it looks like you are the one who has been using its credit services. How They Become You: Identity Theft Techniques According to the U.S. Federal Trade Commission, here's how thieves get their hands on your identity: -
They steal or buy information from insiders at businesses that keep records on you. -
They engage in dumpster diving, where they retrieve information and documents from the garbage. -
They illicitly gain access to credit reports using tools available at their workplace. -
They scoop your credit or debit card information using a special electronic tool when a credit card transaction is processed . This is called skimming . -
They snatch purses or steal wallets. -
They steal mail that contains financial or tax information. Sometimes this is achieved by redirecting your mail to a new address. -
During a burglary , information and documents are stolen from your home. -
A scam artist fools you into filling out what seems like a legitimate form or survey that reveals personal information. -
They steal a person's identity after their death by applying for a replacement birth certificate, especially if a person died in a different jurisdiction from where they were born. Preventative Measures: How to Not Become a Victim Avoiding identity theft takes just a few slight adjustments in the way you run your life. Here are some tips: -
Avoid providing personal information to anyone you don't know or who doesn't have a pressing need for it. -
Safeguard your identification numbers such as driver's license, Social Security, or passport number. Only provide them when absolutely necessary and to verified employees of organizations that request them. -
Your Social Security number is the key that unlocks all of your personal information. Guard it like it is the last chocolate because it's precious. It's the virtual key to your personal vault of information. -
Destroy with a shredder all unneeded documents that contain personal information, especially old bank account statements, financial records, and discarded or incomplete application forms. Make sure you destroy your junk mail, too, if it has personal address information on it. -
Keep an eye on your credit report. Later in this chapter I list all the credit bureaus in key countries around the world where identity theft is rife. Check with your credit bureau annually at a minimum and better, every quarter, to see what credit activity is being tracked against your name. -
Simplify your financial life. Keep only one or two credit cards on hand so it's easier to track those accounts. Cancel credit and bank accounts you don't need. -
Photocopy the contents of your wallet or purse and keep those documents in a safe place. If your wallet is stolen, you'll have a record of everything that is in there. -
Pay your bills electronically . Minimizing a paper trail reduces the risk that paper documents won't fall into the hands of the wrong people. -
Never give out your credit card number on the phone or in an email. Only deal with people and organizations you trust. Signs You're a Victim Victims often don't know they have become victims of identity theft until it's too late. Here are some signs you might already be a victim or might be at risk: -
Strange items on your credit card statements or activity in your financial or other accounts you don't recognize. -
A call from a collection agency demanding payment for a debt you didn't incur. -
New accounts created on your credit record for which you haven't applied. -
A declined credit application, even though you believe your credit is good. -
Strangely missing or stolen identity documents or records. -
A call from law enforcement about a crime that has been committed that they believe you have been involved in or traffic citations for offenses you didn't commit. Someone may be using your ID to represent themselves to authorities. What to Do If You're an Identity Theft Victim You're going to be very busy if you discover you have been victimized by an identity thief. Clearing your name is not easy and can take a lot of time. Some key steps you should take to make the process easier are | 1. | Immediately make contact with the fraud departments of the credit bureaus in your country. There's a list on p. 131 . The bureaus can place a fraud alert on your accounts and ask creditors to call you before they open new accounts in your name. Ask for credit reports so you can track the abuse.
| | 2. | Close or suspend your tainted accounts. Contact your credit card company and bank to report your ATM or credit card stolen. Have your bank stop payment on stolen checks and contact its check verification companies.
| | 3. | Call your local police department and file a report with details about the fraud. Provide the police with as much documentation as you can. Credit bureaus might only take action if you can provide them with a copy of your police report.
| | 4. | Have all identity documents reissued by government and other issuing organizations.
| | 5. | In the United States, file a complaint with the Federal Trade Commission. This can be done online at www.consumer.gov/idtheft/. It maintains a database of ID theft cases for federal investigators . In other countries find out if there is a government body that tracks identity theft and file a complaint with it, if possible.
| Tip  | There are some really good identity theft resources available at www.consumer.gov/idtheft/consumer_helpfullinks.html. They are United Statescentric, but even those outside the U.S. will find much of the information useful. Also have a look at www.idtheftcenter.org, especially the detailed Victim Guide at www.idtheftcenter.org/vg17A.shtml. |
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