An Identity Theft Primer

From the Editors of ITSC

Last year the Federal Trade Commission received about a quarter million stolen identity complaints -- and that's just the reported cases. Of course, stealing your identity isn't much of a crime itself; it's what the criminal does with the information that's damaging. Credit card fraud. Phone and utilities scams. Draining bank accounts.

A two-part crime
Identity theft is a two-step process. First, someone steals your personal information. Next, they use that information to impersonate you and commit fraud. It's important to understand this two-step approach, because your defenses also must work on both levels.

Your information
Protect your personal information diligently to avoid becoming a victim. If identity thieves can't access vital data like your social security or bank account numbers, they can't defraud you.

Most identity theft occurs the old-fashioned way. Thieves rifle through trash, steal mail, and use con games to trick you into revealing sensitive details. It's up to you to protect your personal information.

Don't give out your social security number over the phone. Shred paperwork containing account information or personal identifiers. Keep important documents in a locked safe. Pick up and send sensitive mail at the post office.

Online identity theft is also a problem. Notorious risks are posed by phishing and pharming. In these scams, thieves use fake emails and Web sites to impersonate legitimate organizations. Likewise, hackers and viruses can infiltrate your computer to steal data or capture account names and passwords as you type them.

Store sensitive information in password-protected files and directories. Learn to spot fraudulent emails, Web sites, and other red flags associated with phishing and pharming. Use only secure, authenticated Web sites to transact business online. Finally, install a personal firewall, antivirus program, and spam filter.

Accounts and credit
Although there's a lot you can do to protect your identity, some things are out of your hands. Even if you've been careful with your information, that doesn't mean someone won't hack into your employer's or bank's computers. That's why it's important to keep constant tabs on your accounts and credit report.

Over 40% of victims in 2005 didn't learn about the misuse of their identity until at least six months after the fact. During that time, thieves can plunder accounts or run up serious debt in your name.

Regularly check your credit report for unusual activity. If you see anything strange or unexpected, like a new credit line you didn't open, follow up immediately. Meanwhile, monitor activity on all your financial accounts -- from banking to investments to credit cards.

Taking action
If someone has stolen your identity, respond immediately. Close financial accounts that may be compromised. Cancel your driver's license or IDs you may have lost. Put a fraud alert on your credit report and track your report closely for the next few years.

Next, report the crime to authorities. Notify local police and open a complaint with the Federal Trade Commission. Then, use public resources. From your state attorney general to the Federal Trade Commission to non-profit identity theft organizations, take advantage of their ability to help you recover your losses and prevent further damage.

Conclusion
Identity theft is a fact of life. To avoid becoming a victim, diligently protect your personal information, monitor your accounts and credit report, and respond swiftly to any signs your identity is being misused.