One of the spookiest personal finance topics out there is Identity Theft: what people can do if they manage to steal your identity, and all of the various ways it can affect your life. It’s important to be informed and to keep yourself protected.
Identity Theft
My husband and I just moved into a condo. Unlike previous apartments and rental houses we’ve lived in, the mailboxes for our building are grouped together, out by the street. They’re not behind a securely locked door in our building, or even within view of our condo.
On the side of each group of mailboxes, the post office has put up big warnings: Thieves want your mail. Do not leave mail in your box overnight.
Yikes. Welcome to the neighborhood.
But the warning is the post office’s way of reminding us about the very real danger of identity theft, which the Federal Trade Commission (FTC) estimates
affects 9 million people each year in the US alone, and is the fastest growing white-collar crime in the world.
How does a thief get your information? There are several ways, including these that we discuss in our
Identity Theft course:
Traditional Methods
- Mail – Mail can be stolen from your home mailbox, from a postal service mail drop-box, at businesses, and even directly from postal workers.
- Stolen Wallet – Many identify theft victims believe that the identity theft occurred when their purses or wallets were stolen or lost.
- Trash – Thieves also steal identities from the trash—this is called “dumpster diving.” It can occur at home or at a business.
- Group Identity Theft – With group identity theft, a thief gains access to a place that keeps records for many people. Targets have included stores, fitness centers, car dealers, schools, hospitals, and even credit bureaus.
- Pre-texting – The identity thief poses as a legitimate representative of a survey firm, bank, internet service provider, employer, landlord, or even a government agency. The thief contacts you and attempts to get you to reveal your information, usually by asking you to “verify” some data.
Online Methods
- Computer – Home computers can be infected with viruses that transmit your data to thieves.
- Phishing – Phishing is a form of online identity theft that lures you into giving your personal financial information to fraudulent web sites, also known as spoofed web sites.
- Pharming – Similar to phising, pharming is more sophisticated. Pharmers also send emails, but you don’t have to download an email attachment to be compromised. The simple act of opening the message compromises your information, because the pharming email message contains a virus (or Trojan horse) that installs a small software program on the user’s computer. When you try to visit an official web site, the pharmer’s software program redirects the browser to a fake version of the web site. You may be completely unaware that this has happened, and the pharmer can then capture the personal financial information that you enter in to the counterfeit web site.
- Messenger Programs – This latest form of pharming does not require email at all. Password-stealing Trojan horses can attack through messenger programs (like Microsoft Messenger) where key-loggers are run. Key-loggers are viruses that track your keystrokes on a key board to steal passwords and other information.
- Social networking websites – Be careful not to disclose too much personal information on your social networking websites—sites like Facebook or Twitter. You may not know all of your “friends” as well as you think you do. An identity thief could access a friend’s computer and steal your personal information. Even your full birth date can be a valuable piece of information for an identity thief.
My Identity Theft Story
I have been a victim of minor identity theft. A few years ago, just after I graduated from college, someone hacked into my Facebook account and sent messages to my friends asking for money.
How did they get in? By resetting the password on the email account listed as primary (which I wasn’t using as much anymore), and using that as a gateway to reset my Facebook password.
Fortunately, I don’t have that many friends on Facebook, and most of them know me well enough to know that I’m not “stranded in Europe without my wallet or passport” or whatever desperate circumstance the thief devised to justify “my” pleas for money.
When it happened, several of my friends called me right away and I was able to get the situation resolved with very minimal damage. I’m lucky it was just Facebook and an old email account, and that neither my Facebook account nor my email account contained too much of my personal information.
I am much more vigilant now about my online presence, and always close and delete accounts I’m no longer using.
How to Protect Yourself from Identity Theft
Awareness is one of the best tools you have in your arsenal. If you know how thieves can get to your information, what they might do with it, and how to protect yourself against identity theft, you’ll make the thief’s job more difficult. (Source:
About Identity Theft from the FTC)
Key ways to protect yourself
- Guard your social security number – Don’t carry your Social Security card or number in your wallet. Only give it out to trusted institutions (your employer after you are hired, financial institutions) and make sure you verify how that institution plans to protect it.
- Don’t throw away any mail or documents containing personal information – Always shred your charge receipts, copies of credit applications, insurance forms, physician statements, checks and bank statements, expired charge cards that you're discarding, and credit offers you get in the mail.
- Keep only what you need in your purse or wallet – Don’t carry around credit or debit cards that you don’t use, and don’t carry any extra forms of identification (like your social security card or number). It’s also a good idea to make photocopies of everything you keep in your purse or wallet, and keep those copies in a safe place, in case you need to report what is stole or missing.
- Make sure your information is secure at home and at work – According to a study done in 2006, in almost half of identity theft cases in which the victim could identify the thief (36% of cases), the theft was perpetrated by a friend, a family member, or someone known to the victim. Put your purse in a safe place at work and hide sensitive documents if you have roommates, or if someone is doing work in your home.
- Check your Credit Report often (1-3 times a year) –Use annualcreditreport.com to check your credit report from one (or all) of the three major credit reporting agencies. You can only receive one report per year from each of the three agencies, but you can space them out, pulling a different report every four months, to get the best coverage.
- Consider a Credit Freeze – Many states will allow consumers to “freeze” their credit, which means that no one can access your information unless you temporarily lift the freeze. This prevents any thief from being able to open an account in your name. It also prevents credit card companies from sending you “pre-approved” credit card offers.
Interesting links:
The National Foundation for Credit Counseling (NFCC) put together the
Protect Your Identity Now website for National Identity Theft week, which was Oct. 16-22 this year. Among the great resources, they have a list of
tips to protect your identity.
Colorado Bureau of Investigation
24 Hour Identity Theft Hotline: 1-855-443-3489
(Hotline answered 7 days per week, including holidays)
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