Identity theft is a serious crime, one that has become increasingly prevalent in our modern, technologically advanced society. Identity theft has evolved considerably since it first dawned; it is not simply an unauthorized charge on a credit card. Identity thieves can use your information to apply for loans, start businesses, and even traffic illegal drugs, all under your own name. As we use and store more information online, the threat of identity theft increases as cyber criminals have more ways to access your private information. Fortunately, there are active steps you can take to safeguard your information, detect suspicious activity, and defend against identity theft.
According to the Federal Trade Commission (FTC), identity theft “occurs when your personal information is stolen and used without your knowledge to commit fraud or other crimes.” Once a thief has information like your Social Security number and a good copy of your signature, they can obtain credit, file false medical claims, apply for mortgages, and even commit crimes under your own name and reputation.
The FTC estimates as many as 9 million American have their identities stolen each year. Some people notice identity theft as soon as they see suspicious or unfamiliar charges on their credit account while others may realize they’ve been victim to identity theft when they’re contacted by a debt collector or the police.
Javelin Strategy and Research, of the 8.1 million victims of identity theft reported in America in 2010 (a light year in terms of identity theft), overall losses due to fraud amounted to $37 billion (from $56 billion in 2009). While consumers are not held liable for fraudulent debt, the average out-of-pocket expense for victims rose to $631 in 2010 due to legal fees.
Sometimes it takes years before individuals realize they are victims of identity theft, leading to months or even years of the victim’s time and effort being spent towards adjusting their debt and rehabilitating their credit worthiness. During this time, the victims will have difficulty obtaining loans, getting a job, renting an apartment, or even writing checks. In the rarest cases, some victims of identity theft are even arrested for crimes they did not commit.
Identity theft begins when a criminal gets their hands on your personally identifying information such as your Social Security number, driver’s license number, ATM card numbers, credit card numbers, or any other financial account information. Identity thieves can use a variety of methods to access your information, including:
Thieves then misuse this information to spend and borrow as much of your money as they can. There are a variety of fraud methods an identity thief can use, including:
Prevention is the first and easiest step to battling identity theft. By taking extra measures to protect your personal information, you are saving yourself from a lot of potential hassle. Some great preventative measures to protecting your identity include the following:
Even using the preventative measure listed above, you should take further steps to detect identity theft so that you can stop it before too much damage occurs. To detect identity theft you should monitor the following information routinely:
In addition to monitoring the information listed above, you should be alert for the following red flags:
Once you suspect you are the victim of identity theft, you must defend your credit and reputation immediately by doing the following:
The FTC even offers a chart your course of action PDF that you can print out to remind you who you need to call or write and what their response was. With all of these tools, you can manage and reduce the damage that identity thieves might deal to your credit and reputation.