Identity theft is a real problem in the United States. In fact, statistics produced by the FTC in 2003 show that more than 10 million people reported being the victims of some sort of identity theft in 2002. It seems as though no matter where we go or what we do most of us are at risk if we're not careful to protect ourselves. And the more sophisticated thieves become in their operations, the more difficult it becomes to thwart them. Now more than ever it's important to understand how identity theft works in order to protect ourselves.
Before we can learn the methods of protection, we first must understand how identity theft works. It is a sophisticated process that takes advantage of the carelessness of victims in order to thrive. So right off the start it is important to know there are two basic types of identity theft. The first is known as financial fraud; it is theft of an identity used to steal financial resources from the victim whose identity has been stolen. Financial fraud typically involves stealing money from your bank account, running up your credit cards, and opening new lines of credit in your name.
The second form of identity theft is perpetrated for the purposes of conducting a criminal activity in your name, so as to hide the identity of the thief. If you are a victim of this type of identity theft the criminal may use your identity to distribute child pornography, deal in drugs or weapons, and so on. This is obviously the more serious of the two, but it's also rarer because it requires a lot of effort for which the payoff can be minimal. More often than not, victims of identity theft in the United States are victims of financial fraud.
Getting Your Information
Stealing your identity requires only a little bit of personal information about you; information that is easier to get than you might think. For example, if you've ever thrown away a credit card receipt at a gas station or restaurant, you are giving a potential identity thief enough information to get started. You may not understand what all the information on your receipt is, but the thief knows full well. With just that little receipt he can find out more about you than you would imagine.
Since credit cards are an easy way to steal someone's identity, they are high on the list for thieves. But identity thieves don't need to steal your credit card necessarily; they just need access to it for very short amount of time. Some thieves have incredible memories and can memorize your name, credit card number, and security code in a matter of seconds. Others use hand-held card scanners that fit in their pockets. These scanners can be used to steal the information from your credit cards with just a quick swipe.
Card readers have become so sophisticated waitresses and waiters can carry them in their pockets and quickly swipe every card they come in contact with. These readers can even be installed on ATMs and legitimate card readers at restaurants and grocery stores. The most sophisticated thieves even know how to wire these readers to a store's communication system for the purposes of collecting credit card information remotely.
Other Sources of Information
Identity thieves need very little information about you to get started in stealing your identity. For example, if you've ever thrown your mortgage statement into the trash after you've written your check, the thief can take that statement, call your mortgage lender, and learn everything he needs to know about you in just a matter of minutes. Likewise for information found on doctor's statements, unsolicited credit card offers, and many other pieces of paper we simply throw in the trash.
Finally, your computer is one of the greatest sources of information when you are logged onto public wi-fi networks. If you use your laptop or tablet at a cafe, library, or coffeehouse, anyone else on the network can see your device. If it is not properly secured with a firewall or encrypted home folder an experienced hacker can get in and poke around very easily. What he's after are all your user names and passwords, cookies, and the left over files that are in your cache folders. All of these files are gold mines waiting to be harvested by identity thieves.
Using Your Information
Once the thief has built his own fraudulent identity using your information, he can do any number of things. The most common scenario involves the thief purchasing popular consumer goods which he can then turn around and sell quickly. Most identity thieves will not purchase goods they intend to hold onto for long periods of time; it's too dangerous. Therefore, whatever is popular for the day is what the thief is likely to purchase using your credit. Things like iPhones, flat screen TVs, and so forth.
It is possible for an identity thief to use your information for big ticket items like cars, boats, and real estate. However, these types of thieves are very sophisticated and are able to remain undetected long enough to dispose of the property. Suffice it to say if you're a victim of one of these thieves you are probably someone of means.
Protecting Yourself
Protecting yourself against identity theft is not difficult - it simply requires some common sense. First and foremost you should never give your Social Security number to anyone who does not absolutely need it. Believe it or not, most of the businesses we interact with have no need of our social security numbers even though they ask for them. For example, your doctor does not need a Social Security number, so don't give it to him. It is your number because it is attached to your identity; protect it at all costs.
There are also other things you can do to avoid being a victim including:
- Shredding all documents containing your name before discarding them
- Shredding all unsolicited credit card offers
- Never posting personal information on social networking websites
- Never sharing computer files across an open network
- Never putting anything other than your name and address on checks
- Never writing checks while other people are watching
- Only sending mail by delivering it directly to the post office or an official postal box
- Checking your credit report on a regular basis
- Always investigating any suspicious activity as soon as possible