How to Protect Your Privacy and Prevent Identity Theft

The dramatic rise in the number of cases of identity theft has many Americans wondering how well our laws protect us. It has been difficult for the criminal justice system to keep pace with this increasingly common crime, fueling the feeling of both perpetrators and victims that identity theft carries a low risk of being caught and punished.

Recent designation of ID theft as a crime

Currently there are laws at both the state and federal levels aimed at penalizing identity thieves and compensating their victims, but they are fairly recent. In 1996, Arizona passed a state law recognizing identity theft as a crime; it was the first state to do so. Other states have followed suit, so that by 2001 only Colorado and the District of Columbia had yet to institute identity theft laws.

State-level action against identity theft

Identity theft is usually persecuted at the state level because the amount of money involved is relatively small. However, there is a great deal of variation amongst the laws enacted by the individual states. Some states view identity theft as a felony, while others regard it as a misdemeanor. Some states stipulate that the victim must report the crime to the police in the jurisdiction where the theft occurred. State policies also differ on whether or not the police are required to take a report. Even the types of identity theft punishable by law vary among states.

Federal Identity theft laws

At the federal level, identity theft was recognized as a crime with the enactment of the Federal Theft and Assumption Assurance Act of 1998. This act established the Federal Trade Commission (FTC) as the government agency that would receive and handle complaints of identity theft, and would assist in educating the public about the nature of the crime. This law used the term “means of identification” which it defined as one’s name, social security number, date of birth, government-issued IDs such as driver’s licenses and passports, alien registration numbers, and tax and employer numbers.

Identity Theft Penalty Enhancement Act of 2004

Strengthened the Federal Theft and Assumption Assurance Act by increasing the penalties for identity theft that was part of more serous crimes such as terrorism or crimes involving weapons.

Fair Credit Reporting Act amendment of 2003

Addressed identity theft more directly, and to provide victims of identity theft with ways to work with credit agencies to repair histories damaged by thieves. Called the Fair and Accurate Federal Transactions Act, or FACTA for short, this law also set in place some preventative measures. For example, FACTA stipulates that businesses not print a customer’s entire credit card number on receipts. It also provided customers with the option of placing a fraud alert on their accounts in the event that they suspected criminal activity, and to obtain one free copy per year of their credit report.

How much these laws have done to decrease identity theft is debatable. At the very least, they have raised awareness of the prevalence and dangers of identity theft.

We are bombarded daily with emails, mail and phone calls. An occasional odd call or contact can leave us feeling uneasy but we may be quick to dismiss it. When should we be concerned? What are the signs that we may be the target of an identity thief?

Bills are never late, though we wish they were

One thing that should arouse your suspicion is if your regular bills don’t arrive on time. You may not notice this right away, but as soon as you become aware that you haven’t received one or more of your bills, you need to investigate. Call the company and check to see if someone has changed the mailing address for the bill. An identity thief may have stolen your mail from your mailbox.

Bills for Unknown Purchases

Other causes for concern: you receive a call or letter from a debt collection agency or a company saying that you owe for merchandise or services that you did not purchase. Or, the debt is on an account in your name that you didn’t open. Either way, a contact like this indicates the likelihood that someone has accessed your account or has managed to set up a new account in your name.

Strange transactions on financial statements

You may receive a statement from a financial institution that shows that there are transactions on your account that you did not make. Or you might receive credit card statements on an account that you don’t have, or even a call from a credit company telling you that you have been approved (or denied) for a card that you did not apply for. In each of these cases, you should suspect identity theft and investigate immediately.

Surprisingly denied credit?

A similar concern might arise when you apply for a credit card and are turned down because of a poor credit rating. You might be approved for the credit but with less favorable conditions, like a higher interest rate, than you had expected. If you have maintained a good rating and know of no reason why it would be poor, this can be an indicator that a thief has been using accounts in your name and run up a debt.

What to do if you suspect a case of stolen identity

In all these circumstances, you will want to immediately contact one of the three credit reporting bureaus and whichever one you contact must notify the other two. They are: TransUnion, at 1-800-680-7289; Equifax at 1-800-525-6285; and Experian, 1-888-397-3742. Ask for a copy of your credit report and examine it closely. Look for any transactions that you did not authorize. If you find suspicious activity, you will need to take immediate steps to minimize the damage that an identity thief can cause.

Be proactive with Identity Theft protection

Don’t wait until you suspect identity theft. Be on the look-out for scammers. Monitor your accounts. Request a copy of your credit report on a regular basis and check it carefully. Make sure you have anti-spyware and anti-virus programs on your computer and that they run frequently. Be wise about sharing your personal information. Protecting your identity is easier than reclaiming it.

On order to protect yourself from cyber identity thieves, you need to understand some of their tactics.

Phishing is Very Common

As the word suggests, the would-be identity thief tries to lure you into revealing personal information. They might do this by sending you an urgent email that is designed to look as if it is an official communication from a company you do business with such as a credit card company or a health care company. The “representative” asks that you immediately verify your information.

Similarly, the hacker might set up an instant message to pop up on your computer that looks authentic and official. The message requests that you respond with you identifying information, such as your social security number, account numbers and date of birth. The IM or email might be linked to a website set up to look legitimate, but which is actually a front for identity thieves.

To protect yourself from phishing, do not open emails if you do not recognize the sender. One of the best ways to avoid cyber identity thieves is to make sure you know who you are dealing with, whether by email, IM or websites.

Protect yourself against spyware

Another more insidious way cyber thieves gather their information is by downloading programs onto your computer which search your databases for personal information. Someone with access to your computer can accomplish this quite easily, but what you may not realize is that you may inadvertently download such a program yourself. Using IM and email, and luring you to fake websites, are all ways cyber identity thieves get you to click on and download these dangerous programs.

How can you protect yourself? First, make certain that you have a firewall, anti-spy ware and a good anti-virus software program on your computer. There are several anti-virus programs: a few of the better-known ones are Norton, Kapersky and McAfee. These programs are set to run periodically; make sure yours is up-to-date and runs frequently, perhaps even daily.

While the anti-virus software will scan the contents of your computer, you might also want to do a periodic review of the programs yourself. Look for anything with an unfamiliar name or unknown origins and purge it from your system.

Use Public Computers Wisely

Especially try to avoid using shared computers, such as those found in internet cafés. If you must use a shared computer, protect yourself by making sure you don’t check any boxes offering to remember you and your password on that computer. Also, close the browser after you are finished.

Watch out - because Identity thieves are watching you

Lastly, don’t forget to protect yourself from old-fashioned spying. If you are using your computer in public, be aware of anyone who is watching you work. Try to avoid any transactions that require you to input your personal information when others are around you. And again, use common sense. If someone is hovering, don’t take a chance: close up and move on.

It is tempting to see the crime of identity theft as a modern phenomenon, born of the computer age. In fact, identity theft has a long history-as long as the history of mankind.

Back in the days when a handshake was a promise, a person’s face was often their only identifier. There were no documents to verify one’s name, age or address. Stealing someone’s identity, therefore, was a matter of appearing physically as that person.

Dead Men Tell No Tales

Obviously, this was more easily accomplished if the victim of the identity theft was dead. Identity thieves would take on the name and life of the deceased, living in his or her place. Why would someone attempt such a scheme? Usually, money was the goal. Victims of identity theft tended to be the more fortunate, or wealthy. Inspired by greed, identity thieves were common thieves who sometimes resorted to murder to get what they wanted-namely, someone else’s fortune.

Quite different from the faceless identity thieves of today, these criminals had to be highly duplicitous. Stepping into someone else’s shoes required relinquishing one’s own identity and striving to become, at least for a period of time, someone else. In effect, identity thieves were conmen whose success depended on their skills at deception.

Modern Day Identity Theft

Today, though identity thieves are after the same end-money-the act of stealing someone’s identity usually doesn’t involve murder. The thief maintains his or her own identity while assuming the victim’s identity only on paper. They use the information they have gathered about their victim to access the victim’s money, or to make purchases in his or her name. Undoubtedly, this is much easier than trying to live someone else’s life.

There are several ways that today’s identity thieves find their victims. As most of us are now aware, computer files can be “broken into,” and personal information such as social security numbers, credit card numbers and bank account information can be accessed by the technologically-savvy thief.

Diving into Darkened Dumpsters

Another tactic that has evolved is raiding trash, also called “dumpster diving.” Determined thieves sift through people’s garbage for financial statements and all kinds of other personal information.

Cell Phone Identity Theft

Yet another strategy is reminiscent of the old-time conman; the thief contacts the victim, often by phone or these days, cellphone, posing as a representative from a credible institution. The caller tries to convince the intended victim that there is a crisis or other urgent need for them to reveal their personal information. This scam is often used on the elderly and others who might be perceived as vulnerable to forceful persuasion.

In short, while the idea of impersonating someone else to gain access to their money isn’t new, the tactics used to accomplish this scheme have evolved to keep pace with the changes in the ways we do business. While we may be thankful that impersonation today doesn’t depend on such drastic measures as in past centuries, identity theft continues to be a violation of our most personal possession, our identity.

We’ve all heard of identity theft. We may even know someone it has happened to. Knowing the different types of id theft lessens the chance that it will happen to you.

Email Identity Theft

A common one is identity theft through email. The thief sends you an email claiming to be a representative of a financial institution that you do business with, such as a bank or credit card company. Ironically, they tell you that they suspect there has been fraudulent activity on your account. Feeling worried, you may be all too quick to give them the information they are asking for to help resolve the “problem.”

Phishing for ID Theft

A somewhat similar type of identity theft is called “phishing.” The thief poses as the agent of a credit consolidation company and tells you there is a problem with your credit or that you need to view your credit report. They tell you can do this for a fee. The thief pockets the fee and the “credit consolidation company” disappears.

Turning Your Trash into Cash

Another type of identity theft takes advantage of the credit card offers you receive in the mail and discard. Known as “dumpster diving,” the thief rifles through your trash in search not only of pre-approved credit card offers, but anything such as bank statements, information on existing credit card accounts, and tax documents.

You can avoid this by shredding all mail that contains personal information. But thieves sometimes use another tactic that is much harder to prevent: they may get to your mailbox before you do, and snag those pre-approved credit card offers. You weren’t expecting them so you wouldn’t miss them.

Once the thief has managed to open an account in your name, they call the credit card company, posing as you, and have the mailing address changed on the account. You don’t receive the bills that are being racked up in your name, so you are not aware that you are the victim of identity theft until you discover that your credit has been destroyed.

Spying on Your Private Information

There are a couple of tactics that identity thieves use almost right under your nose. In one, called “shoulder surfing,” the thief manages to view and record a financial transaction, or part of one, as you are making it. While you are either at an ATM or on your cell phone, the thief uses a hidden video camera, such as the one in his or her cell phone, to get a picture of your transaction.

Skimming our Identities

One more type of identity theft to be aware of is called “skimming.” Skimming occurs when you give your credit card to someone to pay for something, such as a meal in a restaurant. While in possession of your card, they run it through a process that can read the info encoded in the magnetic strip on the back.

As technology evolves, so do the types of identity theft. By being informed and using your instincts you can protect yourself and your identity.

If you have had your identity stolen, you may be at a loss about how to proceed. Identity theft restoration can be a lengthy process; it helps to know and follow the following steps.

First, file a police report in the jurisdiction where the crime took place the moment you believe you have been the victim of identity theft. Usually the police are willing to take down a report of identity theft on the first request. If for some reason you meet with reluctance, try another jurisdiction or the state police. Having this report is key to the next steps. When the report is filed, make sure you have a copy.

Your next step is to obtain a copy of your credit report, if you haven’t already. For this, you contact any one of the three credit reporting agencies: Experian, Equifax, or TransUnion. You can call them or find them on-line. Alert them to the fact that your identity has been stolen when requesting your report.

When you receive the report, go over it in detail. Review every entry to determine which ones are fraudulent. Make detailed notes on what you uncover, because your next step is to file a dispute claim with the credit agency for each transaction that is not legitimate. These forms are available on-line from the credit bureaus and can be completed on-line, or printed out, filled out and mailed.

Now your patience and perseverance may be tested. Once the credit bureau has received your dispute claim or claims, they will review them. You may need to initiate follow-up calls. The agency might need additional information from you. Make detailed notes of every contact you have: what information was requested, whom you spoke to, and what plan was agreed to by both parties. Your goal is to have the credit reporting agency block you from responsibility for any charges you did not make.

Be sure to use certified mail and request a return receipt when sending your information. This will help ensure that busy staffers at credit bureaus see your documents and respond to you.

In addition to working with credit bureaus, it is important to contact the Federal Trade Commission ID Theft Report and the Fraudulent Account Statement. These documents will help you refute any charges or purchases made by the thief in your name with individual creditors, banks or companies.

You will also want to contact the Social Security Administration, whether or not your social security card was stolen. An identity thief can find your social security number using other forms of your ID. Notify the SSA that you are the victim of identity theft and ask for a report of your social security statement so that you can validate that your earnings are accurate.

Restoring your identity may take awhile. Try to remain vigilant in monitoring your credit reports and quickly refuting any erroneous charges. Eventually, you will prevail.

If you suspect that someone has stolen your identity, what should you do? According to the Federal Trade Commission, you can take steps immediately to minimize the potential damage.

Step 1: Contact the Police

The first step is to file a report with the police in the community where the theft occurred. Make sure you get a copy of this report, as you will need to provide it, or at least be able to reference the number of the report, when you are taking the next steps. Police departments are usually responsive to victims of identity theft, taking down a report on the first request 58% of the time. But if you do meet with resistance in trying to file a report, you can ask that the police file a “miscellaneous incidents” report or go to a different community or even the state police.

Step 2: online Identity Theft Complaint form

Next, contact the Federal Trade Commission (FTC) ID Theft hotline, at 1-877-IDTHEFT (438-4338) or go to the Federal Trade Commision’s website and fill out the ID Theft Complaint form online. You will also find advice about the next steps you need to take from the FTC.

Step 3: Contact finanacial institutions

You will also want to contact all the credit institutions you do business with to alert them to the theft and to close all your accounts. This includes all bank accounts and credit card accounts. When opening new accounts choose new passwords that will not be easy for someone to figure out. Avoid using your birth date, your mother’s maiden name, part of your Social Security number or your phone number.

Step 4: Fraud Alerts on Credit Reports

The point of this is to prevent the identity thief from opening new accounts in your name. There are three credit reporting companies across the U.S., and whichever one you contact must notify the other two.

They are: TransUnion, at 1-800-680-7289; Equifax at 1-800-525-6285; and Experian, 1-888-397-3742. Ask for extended fraud alerts on your accounts, which will last for seven years.

If your Social Security card was stolen, immediately contact the Social Security Administration (SSA). You will likely be issued either a new number or a replacement card. Since Social Security cards may be bought and sold by those involved in terrorist or other illegal activities, you should also notify the Office of the Inspector General at the SSA that your card has been stolen.

Step 5 - Cover your tracks

Finally, you should cancel and replace any other identifying documents in your name, such as your driver’s license. Alert the agency to be on the look-out for someone attempting to get documents in your name.

After completing these initial steps, you must keep an eye on your credit reports. You can obtain these free of charge once you have placed fraud alerts on your reports. Carefully review these reports for any activity that you didn’t initiate, and make sure any fraudulent information is removed.

The more quickly and thoroughly you move to report identity theft, the easier it will be to reclaim your identity.

With the rapid growth of information technology, a huge increase in the number of cases of identity theft has occurred. According to a 2006 study reported by the Identity Theft Resource Center, there are more than 15 million Americans who have been victims of identity theft. A new case of identity theft occurs in just over every two seconds. Identity thieves use their victim’s information to access checking accounts, open new credit cards, and to buy cell phone service.

Though the statistics about these crimes are unsettling, knowing about identity theft enables you to better protect yourself.

How do I know my Identity has been stolen?

It can take a while to discover that identity theft has occurred, though usually a person discovers he is the victim of identity theft within three months. At this point the lengthy, costly, and emotionally grueling process of trying to undo the ramifications of identity theft begins.

How Long Does it Take to Repair Identity Theft

Some cases of identity theft can be solved more easily than others. For example, the loss or theft of a credit card can be more quickly resolved than the theft of one’s social security number and the ensuing creation of a “twin.” On average, the victim of identity theft spends 330 hours trying to rectify the situation, over anywhere from four to six months to years. But complex situations can take more than 5,000 hours to settle.

Costs of Identity crimes

Identity theft victims end up investing not only their time but a significant amount of money in the efforts to recover their identity. On average, victims spend between $850 and $1378 for related expenses, and lose from $1,820 to $14,340 in wages for time taken off. Businesses also take a financial hit from identity theft, to the tune of $221 billion a year worldwide, according to the Aberdeen Group.

Don’t forget the emotional cost…

Though the monetary and time costs of identity theft are profound, the emotional costs can be even greater. Feelings of anger and rage effect 85% of victims, while 45% experience denial and disbelief. An inability to trust people arises for 42% of victims, and feelings of being defiled by 45%.

There are good reasons for these protracted feelings. Identity theft damages a person’s credit, often making it difficult for her to secure a loan or credit. When credit or loans are secured, 19% of victims end up with higher interest rates and 16% with higher insurance rates. For the majority of identity theft victims, 70%, the damage done to their credit ratings is extremely difficult if not impossible to repair.

Who are identity thieves?

Surprisingly, 43% of identity theft victims say they know who is to blame. Perhaps not surprisingly, domestic harassment or abuse, overlap with identity theft in 16% of cases. In an additional 14 to 25% of cases, victims suspect their identity was stolen by someone in a business with access to their personal information. In cases of child identity theft, the child’s parent is most likely the perpetrator.

Once the identity theft has been discovered, about 20% of victims manage to get their credit report corrected with one request. For the other 80%, discovering the crime marks the beginning of a long battle to re-establish one’s financial credibility.