By Jennifer M. Zeberkiewicz
U.S. Department of Justice data show that identity theft is the fastest growing crime in America. Even Federal Reserve Board Chairman Ben Bernanke has been a victim. And a study by the Federal Trade Commission (FTC) and a report from J.D. Power & Associates indicate that the 18- to 29-year-old age bracket accounts for 30% of all identity theft complaints.
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In 2009, 11.2 million U.S. adults became victims of identity fraud, a 12% increase over 2008, and a 37% rise since 2007.
what is identity theft?
Identity theft occurs when someone uses your personal identifying information—your name, Social Security number, or credit card number, for example—without your permission, to commit fraud or other crimes.
Identity thieves may use another person's identity to rent an apartment, obtain a credit card, or establish a cell phone account.
Nearly 40% of all ID-theft victims discover the crime within one week of the start of the misuse.
who are the typical victims and thieves?
In 2003, Clare Reinhardt received a call from Dell confirming the purchase of a computer by her husband. "I said no, we didn't purchase a new computer from Dell because we had just purchased a Gateway computer a few weeks prior, and Matt was at work," says Reinhardt, 29.
The crime most likely began a month before, when the couple was on vacation. Upon returning to their hotel room, Reinhardt noticed that her husband's computer was on and his tax paperwork was on the screen. "We believe [whoever did] this was the same person who probably took his Social Security number (SSN) and then applied for credit with it," she says.
It shouldn't be a surprise that many thieves choose young adults as victims, particularly college students. According to the J.D. Power Web Intelligence Identity Theft Report:
- Almost half of all college students receive credit card applications on a regular basis. Many of these students throw out card applications without shredding them.
- Nearly a third of students rarely, if ever, confirm their credit card or reconcile checking account balances.
- Almost 50% of students have had grades posted by SSN.
- A large number of young adults use social networks like Facebook and choose to disclose personal information despite knowing the dangers.
In a 2006 FTC survey, 84% of victims reported that they didn't know the thief. Among the 16% who knew the thief, it was a family member or relative (6%), a friend or neighbor (8%), or someone from their workplace. Even harder to believe, there were some incidents in which the identity thief actually was a parent of the victim.
"We find new types of scams popping up every day," says Genie Briggs, marketing manager at Point Breeze Credit Union in Hunt Valley, Md. "Merchants compromising data, phishing, smishing, and skimming scams have a profound impact on our membership. When identity theft occurs, our employees are trained to guide members to government resources. Our staff also directs membership to our Web site, which gives information about types of identity theft and what to look for should it occur."
how to prevent identity theft
No one can totally eliminate the risk of identity theft, but there are things you can do to reduce risk. Think of your SSN, financial account numbers, and passwords as the Holy Grail—sacred and powerful. Protect them carefully:
- Don't carry your Social Security card in your wallet unless you'll need it that day, and don't write your SSN on checks. If your state or insurance company uses your SSN as your driver's license or identification number, ask to substitute another number.
- Deposit outgoing mail containing personal information in post office collection boxes rather than in unsecured mailboxes. Promptly remove mail from your mailbox.
- Avoid using public computers to access financial accounts. When online, select intricate passwords containing letters, numbers, and symbols. Place passwords on your credit card, bank, and phone accounts. Never write passwords down.
- When using social networking sites like Facebook, limit your contact information and never talk about your finances.
- Shred any paperwork containing nonpublic information-such as financial account numbers, SSN, driver's license information, receipts, tax forms, vehicle registration, and insurance forms.
- If you access financial accounts or shop online, make sure Web sites are secure. Secure sites have an "s" after the http—https://. If you receive an e-mail that claims to be from your financial institution and contains a link to the Web site, don't click on the link. Instead, navigate to the Web site by manually typing in the address to make sure the e-mail isn't a scam.
- Check your credit report regularly. You can obtain a free credit report once a year from each of the major credit bureaus by visiting annualcreditreport.com.
- Monitor your transactions and reconcile your financial accounts regularly.
- Make sure your cell phone or smart phone is equipped with security functions to protect sensitive information. Don't store financial information on your phone.
- Keep an inventory of what's in your wallet and PDA, including account numbers. Make copies of everything in your wallet and store copies in a safe place.
- Keep your vehicle registration and auto insurance forms locked in your glove box.
Although the Reinhardts were victims of identity theft, they took immediate action to avoid a financial mess.
"Luckily, Dell called me to confirm the purchase and the theft was caught on the first attempt," Reinhardt says. "Immediately after the call, I called the three big credit bureaus and filed a police report, and put [a freeze on my husband's credit] so that no one could apply for credit under his name or Social Security number unless they called a specified number to verify."