Identity theft includes the misuse of a Social Security number, credit cards, mail fraud, scam, schemes, frauds, or any other form of misuse or abuse of a victim's identity. Identity theft encompasses a variety of crimes, from stealing someone's credit card number to opening accounts in the victim's name.
Consequences of Identity Theft
About 15% of victims report that their identities were stolen for purposes other than obtaining credit, such as
- To get government documents
- Commit tax fraud
- Mislead police
It's comparatively common, for instance, for someone to give a phony name and Social Security number when arrested or stopped for a traffic violation.
New Account Thefts
Identity Thieves tend to do the most damage when they can take over your identity wholesale. By pretending to be you, they can open up credit card accounts, be treated at a hospital, get an auto loan, or rent an apartment.
When the bills are due, they don't pay - and those delinquencies, charge-offs, collections, repossessions, evictions, and judgments wind up on your credit report, sending your credit score into the basement.
This kind of "new account" theft costs, on average, $10,000 per victim and makes up nearly 70% of the costs incurred by businesses and financial institutions. The out-of-pocket expenses for consumers tend to be higher as well - $1,200 compared to the average $500 when all types of identity theft are considered.
The FTC's estimate of the time that consumers spend clearing up problems - 30 hours on average - was decried by many identity theft experts as far too low. The Identity Theft Resource Center said that many victims spend 300 to 600 hours dealing with the various problems that identity thieves cause.
Removing Fraudulent Accounts from Credit Reports
Often, the biggest time-consumer is trying to get fraudulent accounts expunged from credit reports. Many victims complain they get the runaround from credit bureaus.
The bureaus say the problem is lenders, who continue to report account information to the bureaus even after they've been told the accounts might be fraudulent. Either way, the identity theft victim gets squeezed.
Ways in which Identity can be stolen
Here are some typical ways in which thieves gather information about you:
- Stealing wallets or mail
- You fill out an application for credit, an apartment, insurance, or employment. A crooked employee sells the information to a ring of identity thieves or uses it herself to open accounts.
- Snatching pre-approved credit offers from the trash, recycling bin, or mailbox.
- Ordering unauthorized credit reports on you by posing as a potential employer, landlord, or even you.
- Illegal computer tapping by a dishonest employee at a business where you have provided information or been granted credit.
- Looking over your shoulder at phones and ATMs to gather PIN numbers, sometimes with binoculars or listening devices.
- You hand your credit card to a waiter in a restaurant. Out of your sight, the waiter runs the card through a small, hand-held device called a skimmer. All of the relevant information contained on your card's black magnetic strip - including your name and the account number - is stored in the device and can be used to create new cards.
- Breaking into computer systems and searching for people with good credit.
- Using phony telemarketing schemes to con you into giving them your personal data.
- Using personal information you shared on the Internet.
- A former friend, lover, roommate, or coworker with a grudge gathering sensitive information and using it in an attempt to extract revenge (a more common occurrence than most people realize).
- Perhaps the most frightening - and most thorough - way to steal your identity is by purchasing your Social Security number, mother's maiden name, home and employment address, previous addresses, credit history, and more for just a few dollars from one of the identity search companies spawning on the Internet.
- Thieves pretending to be legitimate lenders - or again, dishonest employees of actual lenders - obtain credit reports from the bureaus and use the information to open new accounts.
Related Articles:
|
