Identity theft and its other related crimes are on the rise in the industrialized world. What's the biggest cause of the rise? Technology and the information age. Where it was very difficult to find out personal information about individuals some 50 years ago, it is now ridiculously easy. In fact, if you want to see just how easy it is Google your name and telephone number and just see what pops up. Throw in an address and perhaps a former work place and you'll be surprised at what else you find.
With the amount of information available on any one of us it becomes that much more important to protect our identities at all costs. Failure to do so could result in all kinds of problems including theft from bank accounts, individuals opening up credit in our name, stolen credit card information, and so on. Identity theft has the very real potential of destroying our financial situations, credit scores, our careers, and even our families in some cases.
The Ingredients of Identity Theft
The idea of identity theft is not a new one. In fact, before the information age people still practiced identity theft by digging up records on deceased people and then assuming their identities for their own purposes. In order to be a successful identity thief you need one thing: PII. In the world of identity theft PII is an acronym which stands for "personal identifying information." In the modern world such information includes Social Security numbers, telephone numbers, names and addresses, and so on. All a thief needs is one or two pieces of information and he can find out everything he needs to know about you in a very short amount of time.
Today's identity thieves are so good at what they do that they can get important PII from what appears to be the most innocuous sources. For example, you may not understand all of the information contained on a mailing label attached to a credit card application that arrives at your home. But that label acts as a great starting point for any thief who can get a hold of it. And with one piece of information and an Internet connection a skilled identity thief can go right to work to construct a whole new you for his own purposes.
Tactics Used by Identity Thieves
Identity thieves use a variety of tactics to get the PII they need to start the process. Some of their tactics are highly sophisticated while others are so simple that many people don't believe they are actually used. We'll go through some of those tactics here and explain how you can protect yourself from being a victim.
Dumpster Diving - One of the easiest tactics employed by thieves is known as Dumpster Diving. This tactic is so simple that it almost seems absurd. Nonetheless, using the previous example of the mailing label on the credit card application, an opportunistic thief will rifle through recycling bins, trash receptacles, and dumpsters looking for discarded paperwork with valuable information. You can thwart such tactics by shredding any piece of paper containing your name and other vital information. Be sure to use a cross cut shredder to make it more difficult for thieves to put pieces back together again.
Observation - Good observation skills are a throwback to the pre-technology days, but they still work well in a lot of situations. For example, if you are writing a check at the grocery store a thief with a good memory can glance over your shoulder and, in a matter of seconds, have your name, your address, and the routing number for your bank account. A skilled thief learns memorization techniques which allow him to get this information with very little effort. You can thwart such techniques by always observing who is around you and what they're looking at. By all means you should never write a check in a public place where people are close enough to observe what you're doing.
Credit Card Swiping - One of the more advanced tactics being used by today's identity thieves requires a bit of technology. It is a system of stealing information from credit and debit cards by placing a magnetic reader on a legitimate credit card terminal found in a store or on an ATM. This requires a bit of skill and speed, in order to get readers installed without detection, but when done properly it can yield a virtual gold mine of information. You may have even read stories in your local newspaper about customers of a local department store who had money stolen from their accounts by thieves installing these credit card readers.
There's not much you can do about this type of theft except to pay close attention to your bank and credit accounts. You should be checking them at least every couple of days if you're a heavy user of debit and credit cards. Any unusual activity should immediately be reported and the cards canceled. Thieves get away with this type of tactic because most consumers only check their accounts at the end of the month. That gives thieves a full 30 days to steal from you without you ever knowing.
E-Mail Scams - E-mail has proven to be a bonanza for identity thieves who know how to construct cleverly designed e-mails to solicit information. Typically this tactic is known as "phishing." It is accomplished by creating an e-mail designed to look like a legitimate company, such as a bank or credit card processor, in which the user is requested to visit the website and update personal information. The embedded link that ostensibly sends the consumer to the legitimate website instead redirects the browser to a fake website. Once the user enters personal information into that fake website his fate is sealed.
The best way to protect against this tactic is to understand how legitimate companies send e-mail requests. For example, a legitimate e-mail will always address you by your full name. It will also provide legitimate links back to the company's website; you can check these links by simply putting your mouse over them and reading the website address that pops up. If the address is anything other than the company's main website page it's probably a hoax.
Phone Call Cons - Another old tactic that is still alive and well is the old-fashioned telephone con game. It's a very simple method which requires only your name and knowledge of some business that you regularly interact with. It can be a doctor's office, an auto repair garage, or anyplace else where you have a history.
Thieves who use this method are very convincing when making their phone calls. They claim to be someone from the "head office" or perhaps a police agency, just inquiring about you and some basic information to update their records. Workers on the other end of the phone are often so harried by a heavy workload they don't give such phone calls a second thought. If the thief is especially convincing he can get the information he needs very quickly.
Prevention Requires Diligence
It goes without saying that preventing identity theft requires diligence on our part. We must be careful never to give out information about ourselves other than what's absolutely necessary. As an example, your doctor absolutely needs to know your address, your phone number, and someone to call in case of emergency. But unless you're setting up a line of credit with him, he has no need for your Social Security number. Furthermore, retail stores that ask for your address and zip code to enter into their computer also have no need of it other than to use it for marketing purposes. And while that may seem harmless, all it takes is one unscrupulous employee to sell that information and you could be in a heap of trouble.
You should also be diligent about doing regular account checks as well as a credit reports check. Despite claims to the contrary, there is no negative reflection on your credit report if you are the one making multiple inquiries. For very little money you can sign up with a credit reporting agency and have unlimited access to your report.
ID Theft Recovery
On a final note, there are a handful of companies around the country offering ID theft recovery services. Some credit card companies and insurance companies also include the service as part of their product list. Whether or not such a service is right for you depends on your vulnerability and willingness to pay for such services. At the very least, if a credit card company or insurance company offers you basic protection for a minimal amount it might be a wise investment.