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Identity theft is when someone fraudulently uses your personal information, such as your name, date of birth, Social Security number, and address, for their financial gain. These uses might include obtaining credit, getting a loan, opening a bank account, or obtaining a credit card account or false I.D. card.
What Happens When Someone Steals Your Identity
If you become the victim of identity theft, chances are it will cause severe damage to your finances and your good name, especially if you don't find out about it immediately. Even if you do catch it quickly, you can spend months and thousands of dollars to repair the damage done to your credit rating. Worst-case scenario, you can even find yourself accused of a crime you did not commit because someone used your personal information to perpetrate the crime in your name.
Consequently, it is vital in today's electronic age to secure your personal information in the best way possible. Unfortunately, identity thieves are just waiting for you to make a mistake or get careless-and there is a wide variety of ways they go about stealing personal information. Read on to find out some of the most common methods identity thieves use and what you can do to avoid becoming their next victim.
Dumpster diving-when someone goes through trash looking for personal information that can be used for identity theft purposes-is becoming less common in the digital age. However, identity thieves still sift trash in search of credit card and bank statements, medical information, insurance forms, and old financial forms (such as tax forms).
What you can do: Shred any sensitive material that might be used for illegal purposes prior to disposing of it.
Stealing Your Mail
Identity thieves will often target a person and steal mail directly from your mailbox. Thieves will sometimes have your mail redirected by filling out a change of address request at the post office.
What you can do: Whenever possible, go paperless. Do as much of your banking and bill-paying online at sites that you trust are secure. Keep track of your bills and statements and know what's due when. If things aren't showing up that should be and you suspect your mail may have been redirected, contact your local post office immediately. You might also consider forgoing a traditional mailbox and installing a mail-slot. That way, your mail will be safe inside your (hopefully) locked home.
Stealing Your Wallet or Purse
Identity thieves thrive by illegally obtaining personal information from others, and what better place to get it but from a purse or a wallet? A driver's license, credit cards, debit cards, and bank deposit slip, are like gold to identity thieves.
What you can do: Keep the important stuff separate if possible. If you must carry a purse, make sure it's one that's not easily snatched. Messenger-style bags that cross your shoulder are a good bet. Pickpockets prefer to come from behind so if you carry a wallet, try to keep it in a front pocket of your pants rather than a back pocket.
You Are a Winner!
Identity thieves use the temptation of prize winnings to lure people into giving them personal and credit card information over the phone. The identity thief dangles contest winnings, such as a big sum of money, a free vacation, or a new car-but insists that you must verify your personal information, including date of birth, to prove you are over 18 years of age.
Or, they'll say that the car or vacation is free, except for the sales tax, and explain that the "winner" must provide them with a credit card number. They'll usually try to pressure you into telling them what they want to hear, saying they have to have the information immediately, or you'll forfeit the prize.
What you can do: If it sounds too good to be true, it likely is. Never give out your personal information over the phone to someone who says you've won a contest-even if you've entered a contest. In the event you actually do win something, you will be contacted by verifiable means.
Skimming Debit or Credit Card Numbers
Skimming is when thieves use a data storage device to capture the information from the magnetic strip on your credit, debit, or ATM card at an ATM or during an actual purchase.
When skimming from an ATM, thieves attach card readers (called skimmers) over the legitimate terminal card reader and harvest data from every card swiped. Other tactics are to place a fake PIN pad over the real one to capture victims' PINs (personal identification numbers) as they enter them, or installing tiny cameras. Shoulder surfing-which is more old-school-is when a person reads over the shoulder of a card user to get their personal identification number.
Skimming can occur anytime someone with a digital card reader gains access to your credit or debit cards. It can be done easily when the card is surrendered, such as in restaurants where it common practice for a waiter to take the card to another area to swipe it. Once thieves have collected the stolen information, they can log into an ATM and steal money from the harvested accounts, or clone the credit cards to sell or for personal use.
What you can do: The good news is that credit card technology has advanced to combat the problem of identity theft. Using chip-enabled cards whenever possible will cut down on the threat. Make sure you're signed up for fraud alerts for your credit and debit cards and that the pertinent apps for them are enabled. To thwart cameras and prying eyes on the low-tech side of things, do what you can to obscure any direct view when you enter your PIN number. Of course, if you want to avoid the issue altogether, you could pay cash-but it's not a recommended option for dealing with large sums of money.
"Phishing" is an email scam in which the identity thief sends an email falsely claiming to be from a legitimate organization, government agency, or bank to lure victims into surrendering personal information such as a bank account number, credit card number, or password. Phishing emails often send victims to a phony website that's designed to look like the real business or government agency. Most major banks, eBay, Amex, and PayPal are regular bait in phishing scams.
What you can do: Look at the email closely. Many phishing scammers use poor grammar and spelling. Another giveaway is if they address you with anything other than the full name on your account. Salutations such as "Dear Customer" and "Attention Account Holder" are red flags that indicate a phishing expedition. Check the full return email address. While it might contain some of the company name the phisher is claiming to represent, it won't be complete and will likely have a bunch of unrelated add-ons. If you suspect phishing report it immediately.
Obtaining Your Credit Report
Some identity thieves obtain a copy of your credit report by posing as your employer or rental agent. This gives them access to your credit history including your credit cards numbers and loan information.
What you can do: Consumers are entitled to one copy of their personal credit report from the three national credit reporting companies each year at no cost from AnnualCreditReport.com. These reports include a complete listing of everyone who has requested your credit report (these requests are called "inquiries").
Pretexting is the practice of obtaining someone's personal information using illegal tactics, then selling the information to people who will use it, among other things, to steal the person's identity,
Pretexters may call and claim that they're with the cable company and are doing a service survey. After exchanging pleasantries, they'll ask about any recent cable problems, and see if you'd mind completing a short survey. They may also offer to update your records, including the best time of the day to provide service should you need it, and take your contact information including name, address, and telephone number.
Armed with your personal information, pretexters often search for public information about you, to learn your age, if you're a homeowner, whether or not you paid your taxes, places that you lived before, and the names of your adult children. If your social media profile settings are public, they can learn about your work history and the college that you attended, which may give them the ammunition they need to call former or current companies with which you're associated to gain information that will give them access to your financial information, health records, and Social Security number.
What you can do: Unless you've initiated a call to a company, don't give out any information. It's that simple. Be polite but firm and hang up. Keep your social media settings private, and limit any information you include on professional networking sites.
Business Records Theft and Corporate Data Breaches
- Theft of business records involves the theft of paper files, hacking into electronic files, or bribing an employee for access to files at a business. Identity thieves will sometimes go through the trash of a business to get employee records which often contain Social Security numbers and customer information from charge receipts.
- A corporate data breach occurs when a corporation's protected and confidential information is copied, viewed or stolen by someone who is unauthorized to obtain the information. The information can be personal or financial including names, addresses, telephone numbers, Social Security numbers, personal health information, banking information, credit history, and more. Once this information has been released, it will likely never be recovered and the individuals affected are at an increased risk of having their identities stolen.
What you can do: There's not much you can do to prevent something like this. As soon as you become aware of any situation involving a public entity that has compromised your personal information, alert your bank and credit card companies, and contact the department of motor vehicles to alert them to the possible misuse of your driver's license number. Depending on what information was stolen, take as many proactive steps as possible. The FTC offers these guidelines:
- If the company responsible for exposing your information offers you free credit monitoring, take advantage of it.
- Obtain your free credit reports from AnnualCreditReport.com to look for any activity you don't recognize.
- Consider putting a credit freeze on your accounts with the three major credit report agencies. This makes it harder for someone to open a new account in your name.
- File your taxes early, before a scammer has the opportunity to use your Social Security number to file a fraudulent tax return.