Identity theft occurs when someone accesses and uses your personal information without your permission to commit fraud. Identity theft victims often find themselves in deep debt and at the center of civil and criminal lawsuits without having done anything wrong. Once your identity is stolen, it can take years and thousands of dollars to repair the damage. Thus, understanding the dangers of identity theft is critical to understanding how to prevent the theft from occurring in the first place.
Identity theft is a $50 billion a year industry affecting ten million consumers per year. Surveys have found that the average incident of identity theft involves over $10,000.00 and takes the consumer more than 600 hours to remedy.
The most common form of identity theft is when the identity thief acquires your credit information and uses it to make purchases. The thief is long gone by the time you receive your credit card statement and/or discover the debt. However, identity theft can happen in a variety of ways, using vastly different elements of your personal information.
Identity theft is difficult to guard against because there are so many ways the thief can access your information. Here are common methods used by thieves to acquire sensitive information:
– stealing your mail, either by taking it out of your mail box or doing a “change of address” at the post office;
– stealing your purse or wallet;
– “skimming” your credit card data from a storage device used on an ATM or merchant card swiper;
– stealing trash from your home or business
– accessing your credit report by posing as an employer or creditor
– “phishing” for information through fake emails
Once your information is compromised, identity thieves can assume your entire identity; changing your mailing address; getting identification; opening bank and credit accounts and writing bad checks while running up the credit; getting phone, wireless, and other utility service; filing false tax returns; and providing your identity if they are arrested.
Obviously, the best way to guard against identity theft is to protect your financial and personal information the best you can. First, never through sensitive mail away. Invest in a shredder and use it regularly. Don’t keep your utility bills, tax information, and credit card statements lying around the house. File them away once you’ve reviewed and used them. Make sure you have someone take in your mail when you go out of town. If you don’t receive mail for a couple days, check with our postmaster to see if a change of address form as been filed. Don’t respond in any way to suspicious emails.
Yet, as you can see from their methods, even diligence can’t protect all your information.
Given the variety of ways your personal information can be stolen despite the precautions you take to protect it, smart consumers not only guard their information they also monitor their credit history routinely. Doing so can alert you to unauthorized activity before it gets out of hand and while the thief can still be caught. One way you can do this is simply by regularly reviewing your credit report.
You can obtain your credit report from all 3 credit reporting bureaus for free, if: 1) you have had negative action taken against you (such as being denied credit) within 60 days of your request; or 2) you have not requested a credit report in the last 12 months. The three bureaus have set up a centralized clearinghouse (www.annualcreditreport.com) to get the report free. If you don’t meet either of the two circumstances, you will have to contact each bureau directly and pay for a copy. Equifax: 1-800-685-1111 or www.equifax.com; Experian: 1-888-397-3742 or www.experian.com; TransUnion: 1-800-916-8800 or www.transunion.com
Understanding the dangers of identity theft is the first step to protecting yourself from unscrupulous identity thieves. Be aware of the methods they use. Safeguard your personal information as if it were gold, because it is. And monitor your credit history routinely. Being proactive is the best way to keep from being a victim of identity theft.