Preventing and dealing with identity theft – A comprehensive guide

identity theft

Identity theft, one of the fastest-growing financial crimes in the United States, poses a significant threat to individuals and their financial well-being. The Federal Trade Commission (FTC) reports that a staggering 10 million Americans discovered that their personal information had been misused in some way last year.

With losses amounting to billions of dollars annually, it is crucial to understand the various ways identity theft occurs and take measures to safeguard ourselves. In this article, we will delve into the ins and outs of identity theft, exploring its common methods, prevention strategies, and what to do if you become a victim.

Identity theft is a criminal act in which an individual illegally acquires someone else’s personal information, such as their name, address, date of birth, Social Security number, or mother’s maiden name. Armed with this sensitive data, perpetrators can wreak havoc by opening fraudulent credit card accounts, depleting bank accounts, buying vehicles, securing loans, or even establishing utility services in the victim’s name. The implications of identity theft are far-reaching, affecting victims both financially and emotionally.

How Do Thieves Steal Your Identity?

Identity theft can manifest in various forms, and recognizing these methods is pivotal in minimizing your risk. Below are some common scenarios to remain vigilant against:

  • Lost or Stolen Wallet or Checkbook: A lost or stolen wallet or checkbook is a prevalent source of information used to commit fraud. Such items often contain credit and debit cards and personal documents, making it easier for thieves to obtain credit or sell the information on the black market.
  • Dumpster Diving: Thieves scour trash cans for non-shredded personal information that they can exploit.
  • Mail Theft: Criminals pilfer mailboxes for pre-approved credit card offers, bank statements, tax forms, and convenience checks. They also look for credit card payment envelopes left for postal carriers to collect.
  • Inside Resources: Shockingly, approximately half of all identity fraud cases are perpetrated by individuals with privileged access to personal information, including friends, family members, employees, and live-in caregivers.
  • Impersonation: Some identity theft victims fall prey to imposters who fraudulently pose as individuals with legitimate reasons to access their personal information, such as landlords or employers seeking background information.
  • Documents in the Home: Identity thieves can gain access to your home and personal information through various means, including household work, babysitting, healthcare providers, friends, or roommates.
  • Online Deception: Although most identity theft occurs through traditional methods, online risks still exist. Sending information electronically via email or online chat can be intercepted by cybercriminals.

Guarding Your Identity

Preventing identity theft starts with proactive measures. To safeguard your identity, consider the following steps:

  • Secure Personal Information: Avoid having your driver’s license number or Social Security number printed on your checks.
  • Limit Personal Documents: Refrain from carrying your Social Security card or birth certificate in your wallet or purse.
  • Credit Card Management: Carry only the credit cards you intend to use and do not carry credit card receipts; destroy them securely.
  • Password Protection: When choosing passwords, opt for a combination of upper and lower case letters along with numbers. Avoid using your mother’s maiden name as a password, change passwords regularly, and never store account passwords with your cards or write them on the cards.
  • Card Application Vigilance: Keep an eye on your mail and the calendar when applying for a new card; if it doesn’t arrive on time, contact the credit card company.
  • Secure Mail Handling: Sign up for direct deposit of payroll to prevent paper checks from falling into the wrong hands. Do not leave outgoing mail in your mailbox, and lock your mailbox to deter theft.
  • Verification: When making a credit card purchase, encourage clerks to verify your identification.
  • Review Bills Carefully: Scrutinize monthly bills for any unexplained charges, and request electronic versions of bills, statements, and checks instead of paper.
  • Document Shredding: Shred all documents containing account numbers before disposing of them.
  • Online Caution: Only use your credit card on secure, reputable internet sites, ensuring that the transaction is encrypted.
  • Monitor Credit Reports: Regularly order your credit report from the three major credit bureaus to verify the accuracy of the information.
  • Safe Record-Keeping: Make photocopies of the items in your wallet and keep them in a secure location.
  • Secure Data Deletion: Before discarding a computer, ensure that all personal information is thoroughly deleted from the hard drive.
  • ATM Caution: Be cautious when entering your Personal Identification Number (PIN) at an ATM and retain all purchase receipts.

How to Prevent Identity Theft

Preventing identity theft is essential, and there are proactive steps you can take to protect yourself:

  • Regular Monitoring: Consistently monitor your credit card and account statements, self-detecting any identity theft incidents. Accessing accounts online provides quicker detection compared to monthly statements.
  • Immediate Action: Report lost or stolen credit cards promptly and close all inactive credit card accounts.
  • Refrain from Sharing Personal Information: Avoid volunteering personal information when using your credit card.
  • Monitor Expiration Dates: Keep a close eye on the expiration dates of your credit cards and contact the issuer if the replacement card doesn’t arrive on time.
  • Sign New Credit Cards: Sign new credit cards immediately upon receipt.
  • Match Receipts: Regularly compare credit card receipts with monthly bills to identify unauthorized charges.

If It Happens to You

Identity theft is a distressing experience, but there is a well-established process to help victims recover and protect themselves from further harm. If you believe you’ve been a victim of identity theft, follow these steps:

Step 1: Call for Free Counseling
Contact the consumer network Call for Action at 1-866-ID-HOTLINE (1-866-434-6854) for free, confidential counseling, and guidance on resolving your identity theft issue.

Step 2: Contact Credit Bureaus
Immediately place a “fraud alert” on your credit reports by calling one of the three national credit bureaus. This alert can prevent identity thieves from opening new accounts or modifying existing ones without your knowledge.

Step 3: File a Police Report
Report the identity theft to your local sheriff or police department. Obtain a copy of the report, which can be essential for working with creditors and filing identity theft reports.

Step 4: Contact Creditors’ Fraud Departments
Close any accounts tampered with or opened without your consent, and inform the security or fraud department of each creditor. Follow up with written correspondence.

Step 5: File a Complaint with the FTC
File a complaint with the Federal Trade Commission (FTC), which handles identity theft complaints and provides essential information to victims. The FTC can also refer complaints to credit reporting agencies and law enforcement for further action.

In conclusion, identity theft is a pervasive and costly crime that can affect anyone. However, by staying vigilant, following preventive measures, and knowing the steps to take if you become a victim, you can significantly reduce your risk and protect your identity from theft. Don’t underestimate the importance of safeguarding your personal information in an age where identity theft is on the rise.