State of the Identity Theft Industry - Protect Yourself
Protect Your Identity
Identity thieves are getting more sophisticated and inventive every day. Just last month, there have been a number of identity theft related reports. Among them:
- a fake credit card reader that collects shoppers’ information
- a $9.87 fictitious charge scam on credit cards of military personnel stationed overseas
- a couple that put up sex ads on Craigslist as a setup for ID theft
- a postal worker stealing credit card information and going on a shopping spree
- a dumpster diver finds customer financial information in bank trash
Consumerist.com pointed out some of the ways the criminals get a hold of the information and use it. On top of that, another recent report suggests that the market for stolen data has become segmented.
- “Data supermarkets” sell credit card numbers in bulk for a fixed price. Security experts found sales of 500 cards for $200.
- A file that includes passwords, the answer to a user’s security questions, and his mother’s maiden name—along with the credit card data—might go for a few hundred dollars.
- The more expensive credit card numbers have often been field-tested already, with a seller placing a small charge on the account to see whether it goes through and if the owner detects any fraud.
- The big money appears to be in “value-added services”, as more sophisticated criminals have gotten in the business of validating data, compiling more complete dossiers of information or selling “bots” that allow the buyer to collect data himself.
- Bank account numbers go for anywhere from $10 to $1,000
- “Full identities” (which include date of birth, address, and social security and telephone numbers) sell for between $1 and $15 each.
Once they have your information, they use your name, Social Security number, credit card number, or other personal information to commit fraud or theft. They might:
- Run up charges on your credit card accounts
- Open new credit accounts or cellular phone service using your name
- Open a bank account in your name and write bad checks on it
- Create counterfeit checks or credit or debit cards, or authorize electronic transfers in your name, and drain your bank account
- Buy a car by taking out an auto loan in your name
- Get identification such as a driver’s license issued with their picture in your name
- Call your credit card issuer to change the billing address on your account. The imposter then runs up charges on your account. Because the bills are being sent to a different address, it may be some time before you realize there’s a problem.
Problems that result, such as unpaid bills, are reported on your credit report.
Reporting Identity Theft
If you become an ID theft victim, take the following steps:
- File a report with your local police station. Keep a copy of the police report, which will make it easier to prove your case to creditors and retailers.
- Contact the credit-reporting bureaus and ask them to flag your account with a fraud alert, which asks merchants not to grant new credit without your approval.
- Close your accounts and open new ones
- Call the security or fraud departments of each company and follow up in writing with copies of supporting documents.
To simplify the lengthy credit-repair process, the FTC now offers an ID Theft Affidavit you can use to report the crime to most of the parties involved. Request a copy of the form by calling toll-free 1-877-ID-THEFT (438-4338) or visiting www.consumer.gov/idtheft. All three credit bureaus and many major creditors have agreed to accept the affidavit. You can also use this website to file a complaint with the FTC.
The FTC also publishes a series of publications about the importance of personal information privacy. To download copies go to www.ftc.gov or request free copies of brochures by calling 1-877-FTC-HELP (382-4357).
Preventing Identity Theft
Of course, when it comes to identity theft, prevention is king. You can reduce the chance a con artist can go on a spending spree with your money or steal your identify by taking the following precautions:
- Give your Social Security number only when absolutely necessary. Ask to use other types of identifiers when possible. If your state uses your SSN as your driver’s license number, ask to substitute another number.
- Sign credit/debit cards when they arrive. It’s harder for thieves to forge your signature.
- Carry only the cards you need. Extra cards increase your risk and your hassle if your wallet is stolen.
- Keep your PIN numbers secret. Never write a PIN on a credit/debit card or on a slip of paper kept with your card.
- Avoid obvious passwords. Avoid easy-to-find names and numbers like your birthday and phone number.
- Store personal information in a safe place at home and at work.
- Don’t give card numbers to strangers. Confirm whether a person represents a company by calling the phone number on your account statement or in the telephone book.
- Watch out for “shoulder surfers”. Use your free hand to shield the keypad when using pay phones and ATMs.
- Beware of blank spaces. Draw a line through blank spaces on credit slips. Never sign a blank slip.
- Keep your receipts. Ask for carbons and incorrect charge slips as well.
- Destroy documents with account information. Stop thieves from finding information in the trash by tearing up or shredding receipts, credit offers, account statements, expired cards, etc.
- Protect your mail. Ask your local U.S. Postal Service to put your mail on hold when you are traveling and can’t pick it up.
- Make life difficult for hackers. Install firewalls and virus-detection software on your home computers. If you have a high-speed Internet connection, unplug the computer’s cable or phone line when you aren’t using it.
- Keep a record of your cards and accounts. List numbers, expiration dates and contact information in case there is a problem.
- Pay attention to your billing cycles. A missing bill could mean a thief has taken over your account.
- Promptly compare receipts with account statements. Watch for unauthorized transactions. Shred receipts after verifying the charge on your monthly statement.
- Check your credit report once a year. Check it more frequently if you suspect someone has gotten access to your account information.
Despite these precautions, problems can still happen. If a card is missing or you spot suspicious activity on any of your accounts, be proactive and notify your creditors immediately. ID theft criminals are getting more and more enterprising every day. It’s up to you to make sure you’re always one step ahead of them.
Source: Consumer Action Handbook
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