Reduce The Risk of ID Theft. Don’t Get Scammed!

I offer some thoughts on how to prevent identity theft and how to seek identity theft protection.

This topic has been talked to death by the financial community and there are literally a zillion books on the subject, but being the paranoid that I am, I thought to add my own thoughts to the conversation.

I’d like to take a closer look at the subject of identity theft. What I found particularly worrying was how victims of this crime didn’t feel sufficiently supported by the government about their plight, and how perpetrators to the crime come in all shapes and forms: from illegal immigrants to one’s own family members — including, sadly enough, those parents who’ve decided to exploit their own children.

My Experiences With ID Theft

I’ve been a victim of credit card false charges and theft more than once, and I do know at least one person who’s been a victim of identity theft. In that situation it was such a blatant crime that involved the victim’s social security number becoming hi-jacked by no less than five foreign-sounding identities that were registered in the same bank as the victim’s. How crazy is that?

I also wrote about an experience I had several years ago about some very determined thieves who attempted to raid our trash bins in the middle of the night. And would you believe they did it even with our security lights flooding the location where our utility bins were located? Some of these low-lifes are not easily deterred, unfortunately.

We may try to do all we can to prevent identity theft from happening, but it could still very well happen to us. Here’s what a fraudster does to make you a victim:

• Work in a gas station or restaurant for a few days to get discarded credit card imprint carbons.
• Sift through trash cans and dumpsters to pick out bank records and credit card billing statements.
• Drive around suburbs with an inexpensive scanner and listen for people placing phone orders on cordless phones.
• Pay off “friends” who work in retail stores to steal numbers from customers. Obtaining names and SSNs from personnel or customer files in the workplace.
• Stand next to or behind patrons at the sales counter of any department store and read their number off the card as they present it to the clerk. “Shoulder surfing” at ATM machines and phone booths in order to capture PIN numbers.
• Wander through airports or bus stations where people routinely forget to pick up their receipts while worried about catching their flight or getting on their bus.
• “Dumpster diving” in trash bins for unshredded credit card and loan applications and documents containing SSNs.
• Stealing mail from unlocked mailboxes to obtain newly issued credit cards, bank and credit card statements, pre-approved credit offers, investment reports, insurance statements, benefits documents, or tax information.
• Accessing your credit report fraudulently, for example, by posing as an employer, loan officer, or landlord.
• Finding identifying information on Internet sources, via public records sites and fee-based information broker sites.
• Sending email messages that look like they are from your bank, asking you to visit a web site that looks like the bank’s in order to confirm account information. This is called “phishing.” (Visit www.antiphishing.org)

Basic Steps To Reduce ID Theft

There are actually two types of identity theft:

(1) Theft of your sensitive information to take over your existing accounts. I always thought of this as just your standard credit card fraud scenario, but it’s actually a form of ID theft. This form of theft is easier to discover simply through checks of activity against your existing accounts.

(2) Theft of your identity used by a thief to open and generate new accounts in your name. This crime is much tougher to trace because new accounts and statements are tied to the address of the criminal.

Given the prevalence of such crimes, I sometimes wonder if by doing a few radical things, I may foil these ID thieves completely. Some of the ideas that crossed my mind:

• Pay everything in cash! That would limit the frequency of my personal information being attached to traceable monetary transactions.
• Put my money under my mattress. Okay, this may not be a feasible thing to do, but hey, it will once more limit how many roving eyes take an interest on my dough.
• Get a P.O. box and use it instead of my own address. This would make it tougher for people to have the information they need to open bogus accounts in my name.
• Freeze my credit report, which means I won’t be able to get new credit unless I unfreeze my report first (which takes a fee and several days to do). The tradeoff is between the hassle and inconvenience you’ll need to go through to access new credit, vs the security and peace of mind you’ll receive from knowing you’re an unlikely ID theft victim. I’m putting this on my TO DO list!

You don’t have to go to extremes to avoid becoming a victim though. I find myself doing a few things to make sure I don’t fall victim to this difficult-to-resolve type of crime. Keep your risks low by taking some basic steps:

• Safeguard your information. Know where your information goes and don’t give it out unless absolutely necessary.
• The less items you have with your information on, the better. Transact less often, minimize the use of plastic, own fewer cards, simplify your finances, etc.
• Keep good records, be vigilant about them and review them regularly for any unusual activity or just to monitor the health of your finances.
• Use features and services available to consumers that allow for better tracking, higher id theft prevention and the like.
• Identify the signs and symptoms of fraud. Recognize the type of activity that could indicate that you’re being victimized! Here’s how to know if you’re being ripped off:

  • Bills and statements don’t arrive when they are supposed to — they may have been stolen from the mailbox or someone has changed the mailing address.
  • You receive calls from collection agencies or creditors for an account you don’t have or that is up to date. Someone may have opened a new account in your name, or added charges to an account without your knowledge or permission.
  • Financial account statements show withdrawals or transfers you didn’t make.
  • A creditor calls to say you’ve been approved or denied credit that you haven’t applied for. Or, you get credit card statements for accounts you don’t have.
  • You apply for credit and are turned down, for reasons that do not match your understanding of your financial position.

For further details, you can check out this article on 46 ways to reduce the risk of becoming an ID theft victim.

Now you don’t need to read any more personal stories to know that id theft is a massive pain in the arse. Victims have claimed that it takes from a year to two years to resolve a case.

But what if you’ve become a victim despite all your precautions? Then here’s what to do:

What If You’re A Victim?

There are clear avenues to take once you’re in this situation.

1. Check your credit report and contact the three major credit bureaus: Experian, Equifax and TransUnion. Place a fraud alert on your reports.
2. Close all your affected accounts: contact your creditors, banks and other institutions where your information may have been compromised.
3. File a report with the Federal Trade Commission.
4. File a report with the police.
5. Report the misuse of your SSN to the Social Security Administration or you can file an electronic fraud report at www.ssa.gov.

For comprehensive details about how to proceed, check this FTC report and this one.

That said, I’m not taking any chances — given our fairly stable financial status and the fact that we are not heavy credit users, my spouse and I have decided to put on a credit freeze fairly soon. Take that, you horrid thieves!

Copyright © 2008 The Digerati Life. All Rights Reserved.