What Is Identity Theft?

This article first defines what  identity   theft  is, it then explains how the thieves might obtain your details and then explains how you can protect yourself.

 Identity   theft  occurs when the thief steals your personal information to do one or more of the following:-

• Take over your credit accounts/credit cards.
• Open new credit accounts/credit cards.
• Take out a loan in your name.
• Rent a flat/apartment in your name.
• Access your bank accounts.

They may also commit other crimes in your name and at your expense.

When  identity   theft  strikes the effects can be devastating and because it often involves no physical theft it may not be noticed by its victims until significant financial loss has already occurred.

The ways in which your identity can be stolen are:-

• The thieves go through your mail or trash, looking for bank and credit card statements, pre-approved credit offers, and tax information etc.
• They steal personal information from your wallet or purse such as identification, credit, or bank cards.
• They might complete change-of-address forms to redirect your mail for their own use.
• Obtaining your credit report by posing as a landlord or someone else who has a lawful right to the information.
• Acquiring personal information you share on websites that lack Internet security.
• Buying personal information about you from an inside source such as a store employee that gets your information from a credit application or by “skimming” your credit card information when you make a purchase.
• Getting your personnel records at work.

What is the scale of the problem?

To give you some idea of the scale of the problem and its impact it is estimated that more than 100,000 people are affected by  identity   theft  in the UK each year, costing the British economy over £1.7 billion annually and the figure is rising sharply. According to a Gartner study the 2006 victim population in the U.S. was 15 million victims. That means every minute about 28 people become a new victim of this crime, or to put it another way there is a new victim every 2 to 3 seconds. One study said that  identity   theft  cost U.S. businesses and consumers $56.6 billion in 2005.

In 2004, victims spent an average of 330 hours recovering from this crime, often spread over a number of years. Even after the thief stops using the information, victims struggle with the impact of  identity   theft . That might include increased insurance or credit card fees, inability to find a job, higher interest rates and battling collection agencies and issuers who refuse to clear records despite substantiating evidence of the crime.

How can you protect yourself?

It is probably true to say that you cannot totally prevent yourself from becoming a victim of  identity   theft . However, by managing your personal information carefully you can substantially reduce the likelihood that it will happen to you. The following tips should help you reduce your risk.

Be careful about giving out personal information. Whether on the phone, by mail, or on the Internet, never give anyone your credit card number or other personal information for a purpose you don’t understand. Ask to use other types of identifiers when possible.

Shred all rubbish containing any personal information. Check everything that you are about to through into the rubbish. If it contains any personal information, name, address, credit card numbers for example on your receipts, bank details etc. then ideally shred them with a cross cut shredder.

Cards. Minimise the number of cards you carry in your wallet or bag. If you lose a card, contact the fraud division of the credit card company immediately. Also if you apply for a new credit card and it doesn’t arrive in a reasonable period, contact the issuer. Watch cashiers when you give them your card for a purchase. Also when you receive a new card, sign it in permanent ink and activate it immediately. Keep any credit cards that you leave at home in a very safe place. Don’t forget to use them from time to time to ensure they are active, as you will want to use these cards if your other cards are lost or stolen, until replacement cards are obtained.

Reduce the amount of information you carry. Minimise the information you carry in your wallet or bag. If your keys are lost or stolen get your locks changed.

Late or missing bills. Contact the creditor if your bill is late arriving, as this could mean an identity thief has taken over your credit card account and changed your billing address.

Safeguard personal information in your home. If you are going to have any none family people in your home such as service engineers, plumbers, cleaners or you share your home with flat mates, then ensure your personal information is safeguarded.

Passwords and PINs. You must memorise your passwords and personal identification numbers instead of carrying them with you. Don’t use easily available information like your mother’s maiden name, your birth date, your phone number, or a series of consecutive numbers.

Check your credit report. You can check your own credit report and doing so can help you catch mistakes and fraud before they have a large impact on your personal finances. Make sure your report is accurate and includes only those activities you’ve authorised. It’s also a good idea to review your credit report from each of the three major credit reference agencies every year as it is possible that information is reported to one but not the others.