Identity theft occurs when a thief assumes someone else's identity to commit fraud in that person's name without their knowledge. By the time the victim catches on, the thief is usually long gone, leaving behind a trail of ruined credit, debts and collectors. In some cases, identity theft can even lead to wrongful arrest of the victim.
Identity theft is a nightmare for the millions of people that have endured it, and unfortunately, that number rises every year. Armed with your personal information, a thief can obtain a driver's license, open new lines of credit and bank accounts, even buy a car and get a mortgage. Bills and statements from these transactions are diverted to the thief's temporary address, bilking your credit line for all it's worth in cash advances, loans and credit card debt without intent to pay. When the walls come crashing in, you're left holding the bag and the thief is long gone. Financial recovery from identity theft can take years.
In today's society of plastic cash, online transactions and data mining, nearly everyone is a potential victim of identity theft. However, the Federal Trade Commission (FTC) suggests there are things you can do to minimize the risk:
- Don't give out personal information unless you have initiated the contact. Thieves can pose as representatives of legitimate companies with which you do business and request you 'verify personal information.' In "verifying" it, you are actually giving it to the caller. Instead, tell the caller you're busy and will have to call them back, then ask for a name. Do not use a phone number supplier by the caller. Use your statements or a phone book to get the number of the business, then verify the caller and his or her purpose.
- Place passwords on bank accounts, credit card accounts and other lines of credit. Use something other than your social security number or mother's maiden name to guard against identity theft.
- Keep your social security card in a secure place like a safety deposit box or home safe. It should not be carried in your wallet unless you are going to need it. A social security card in the wrong hands makes identity theft even easier.
- Avoid giving out your social security number unless it is required to obtain a credit report, loan, or some other legitimate transaction. If asked for your social security number, find out why it is needed and ask if it is legally incumbent upon you to provide it to receive the goods or services you are requesting. In most cases it is not and another number can be substituted.
- Use a "confetti" shredder for all paper and plastic that displays your personal information. This includes statements, credit card solicitations, junk mail that has your name and address, and expired cards of all kinds, including not only credit cards but also insurance cards, medical cards and even library cards. If you receive magazine subscriptions, remove the address pages for the shredder before throwing the magazines out.
Although these and other precautions can help reduce the risk of identity theft, vigilance can also go a long way towards protecting yourself. Watch your monthly billing and bank statements. Missing statements can be a sign that someone has changed your billing address without your knowledge. Even junk mail can be telling. If you suddenly get multiple catalogs or brochures for products you've never purchased, this could be a sign that someone else is using your name to buy those products.
Experts also recommend reviewing your credit report regularly. In the United States, law allows each person one free copy yearly from each credit agency: Experian, Equifax and TransUnion. You can obtain all three free credit reports at once, or get one free copy every four months by rotating agencies. A hub has been set up by these three agencies to serve the public at AnnualCreditReport.com. This is the only FTC-approved website for obtaining free credit reports, and it has no strings attached. If you have reason to believe someone might be using your personal information for identity theft and would like to read more, see the FTC's Take Charge: Fighting Back Against Identity Theft.