 It
sounds like a nefarious plot cooked up by authors fascinated with
conspiracy theories - one that involves rubber facemasks, contact
lenses, and finger print imitations.
Nevertheless, identity theft is more than just
fodder for science fiction. It is a very real problem that every one of
us is facing today.
If you've been watching the news or reading the
papers, you almost certainly have an idea what identity theft is. The
problem often evokes circumstances where a con artist or an impostor
uses someone else's name, Social Security Number (SSN) and other
personal details to make purchases, take out loans, or commit fraud -
all in the name of the innocent victim.
But did you also know that the key to prevent identity theft might be found in your credit report?
First, let us discuss why we all need to put our best efforts into stopping identity theft.
When the Criminal Uses Your Identity as Cover
Identity theft is by far the most common fraud
complaint that consumers bring to law enforcement authorities and
consumer protection groups.
Actually, identity theft topped the list of
consumer fraud complaints in 2002, according to the latest data
compiled by the Federal Trade Commission (FTC). It was the third year
in a row that the crime occupied the Number One spot in the list,
accounting for 43% of the total.
In a separate survey, the General Accounting
Office came up with 750,000 as the number of Americans who fall victim
to identity theft every year. And they say that number may be low, as
many people select not to report the crime or, for that matter, even
know they have been victimized.
Though, what makes the crime worse than it
already is not its frequency or pervasiveness. The extent of the damage
it can do to a person extends to more than just financial ruin but harm
to even a person's good name, which is the last bulwark of your
identity.
There are federal laws and industry practices
that set up limits to the liability of being an identity theft victim.
But this only solves a small portion of the victim's problems. The
reason is that it often takes years to repair the damage that has
already been done.
You will have to notify creditors and law
enforcement that you have been victimized. You will have to close
tainted accounts and open new ones, and correct your credit report.
Additionally, you may not be able to get approved
for loans, jobs, housing, insurance, or other opportunities since one
incidence of identity theft was sufficient to shatter your reputation
and credit rating totally.
Associate Director of the FDIC's electronic
banking branch, Michael L. Jackson says, "A thief can secretly run up
thousands of dollars in bills using your name and a different or
fictitious address, and you may not be aware of this until you are
turned down on an application because the delinquent debt was recorded
in your credit report."
Another good reason why you should take the
necessary steps to stop identity theft is so "you (can) protect
yourself and other consumers from higher interest rates and fees that
lenders charge to recoup losses from fraudulent credit cards and
loans," explains an FDIC Consumer Affairs Specialist, Cora Lee Page.
How Identity Theft is Committed
The criminal mind is creative. Criminals like
identity thieves are clever people who find a variety of means to
commit crime. But if you always stay on your guard, particularly with
regard to personal things that contain sensitive information, it does
not matter how clever they are.
Your social security number, your birth date and
other identifying information such as your address, phone number,
driver's license number, and whatever else can tell personal things
about you are all rich sources of information that an identity thief
may use.
Armed with this information and a driver's
license with his or her own picture, an identity thief can begin the
crime. They could use the information when applying for new credit or
opening up new accounts, either in person or through the mail or phone.
They could even provide an address of their own, claiming they have
moved.
They could fool lenders and car dealers by posing
as you and when they fail to make good on their monthly obligations,
the damage shows up in your credit rating, ruining your good name in
the procedure.
In fact, there are so many things that an
identity thief can do with just a few personal information from you.
But all of them can be tracked down to two basic damages - financial
damage and destroying your reputation.
But how do these criminals get a hold of your information?
You might say that you take care of your personal
information and you never give it to just anyone. You are always
careful where you place your important stuff - driver's license, credit
cards, ATMs, checkbooks, etc. While you might practice extreme levels
of care in your home, once you step out control slips right out of your
fingers.
A waiter at a restaurant can effortlessly record
your credit card number and the all important verification code
(three-digit number) found on the back of the card. A hospital medical
staff has access to your insurance records.
An employee at a lending institution or a bank
can get your bank account number from the company's computer database.
And that is not to mention all other telltale paperwork you leave lying
around your workstation or any information you provide over the
Internet.
Almost anyone who is clever enough can get your
information from businesses and other institutions. They only have to
do any of the following:
- Steal records or information while they are on the job
- Get
your credit reports by taking advantage of their employer's access to
them or posing as a landlord, employer, or someone else who has legal
right to access your report
- Bribe an employee who has access to these records
- Con information out of employees
- Hack into places where these records are kept
- Steal your mail, including bank and credit card statements, credit card offers, new checks, and tax information
- Rummage through your trash in a method called "dumpster diving"
- Complete a "Change of Address" form to divert your mail to another location
- Steal personal information from your own home
- Steal your wallet or purse
- Steal
information from you through email (phishing) or phone (pretexting) by
posing as legitimate companies and claiming that you have a problem
with your account
Time to Fight Back
The FTC reports that it takes an average of 12
months before a person realizes that he is an identity theft victim. By
that time, you would have received several calls from collection
agencies about accounts that you don't recall ever opening.
Purchases you never made, loans that you never
applied for, mortgages, securities, withdrawals, cash advances that you
don't remember doing - all these are signs of possible identity theft.
When you finally reach that point where you don't
know what to do anymore, someone advises you, or you come up with it on
your own to go through your credit report to look for any errors. And
that is when you understand you have been victimized.
So why wait until much damage has been done? Why
not prevent the crime from ever happening in the first place? It is
time for you to fight back against identity theft and identity fraud
and take back what you have lost from these criminals.
Every transaction, every account opened, and
every purchase done in your name and using your personal information
will finally reflect in your credit report. As such, your credit report
is in fact your first source of indication that you are an identity
theft victim.
But the problem is that not many people pay much
attention to their credit reports. Actually, the only time they even
think to get a copy of their credit report is if they are applying for
a loan or a mortgage.
And that is why most identity thieves can get
away with their crimes for as long as they can. Since people do not
check their credit reports, they are generally unaware that they are
being victimized until too late.
In November, the US Congress amended the Fair
Credit Reporting Act (FCRA), allowing American citizens to get free
credit reports every twelve (12) months from the three main credit
bureaus (Experian, Equifax, and Trans Union). But even this may not be
enough to put a stop to the burgeoning criminality that is identity
theft.
A credit monitoring service is your alternative
to making sure your information is protected from these criminals. The
service will alert you, generally daily or weekly, to changes in your
credit. By doing so, it will help you stop the theft before it gets out
of control.
This is not to say that the credit monitoring
service is the one sure method to prevent identity theft. However, it
does play a vital role in reducing the impact or damage that identity
theft has on your credit and your good name.
Credit Monitoring
There are basically two types:
A three bureau monitoring service provides
monitoring for all three credit bureaus - Experian, Equifax, and Trans
Union. As it includes all three, the service can be quite expensive.
On the other hand, the single bureau monitoring
service provides only for any one of the three national credit bureaus
and costs somewhat lower than the first type.
The companies that provide credit monitoring
service are reputable and owned by publicly-traded major corporations.
Using all of the latest encryption, consumer screening, and data
security technologies, they make sure that your information is
protected.
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