Millions of people have been victimized by identity theft. Identity theft occurs when someone steals your private information, such as your driver’s license or Social Security number, and uses that data for his or her own personal gain, to open credit accounts or take out loans in your name. In 2006 alone, consumers reported more than 670,000 cases of fraud and identity theft, which cost them $1.2 billion in losses, according to the Federal Trade Commission. Remember: these numbers reflect only what’s been reported to federal authorities. By other estimates, millions of people are victimized by identity theft each year and one study found that in 2006 alone, identity thieves cost consumers and business roughly $57 billion. The list of banks, companies and organizations that maintain personal data on consumers is long. And, unfortunately, scores of them have had security breaches when hackers and other criminals stole sensitive customer data. The problem has gotten so bad that lawmakers in some states are considering whether to impose stiff fines and penalties on retailers and other companies that don’t take adequate precautions and wind up experiencing theft of client data. If your information is stolen from a bank, or you lose your credit card, the law limits your liability for credit card fraud to $50. But if you deal with a company (besides a bank) that doesn’t take proper preventative measures to secure your sensitive information, there’s really not anything you can do about it. There are, though, some practical steps you can take on your own to make sure that you don’t succumb to an identity thief. After all, this is a serious problem. Identity theft is the number-one white collar crime in America. In 2007, the FTC said it got more complaints about fraud and identity theft than anything else. And one out of four cases involves credit card fraud.
Tips To Avoid Identity Theft
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To protect yourself from identity theft, don’t carry your Social Security card with you, leave most credit cards at home, and shred sensitive mail (don’t just trash it). There was a time when crooks misappropriated consumers’ identities by rifling through their trash, stealing their mail, or by looking over their shoulders at ATM machines, etc. Nowadays, an identity thief is just a likely to pull a high-tech con on you, convincing you to give up your information over the Internet, or stealing your data by hacking into corporate databases.
Sadly, a growing number of identity theft victims have this dreadful white-collar crime perpetrated against them by their own family members or loved ones. Cases abound of siblings opening accounts in their sisters’ or brothers’ names; there are adult children making unauthorized charges on their parents’ credit cards; and some parents are even doing their own minor children a disservice by getting credit in the name and/or Social Security number of the child. They probably don’t realize that their credit binge right now could ruin that child’s credit for many, many years to come. Sometimes a close family member you love could open unauthorized accounts in your name, fully aware of what they are doing. Yet, their own selfishness or greed drives them to do the wrong thing, anyway.
Next – Day 11: Prevent Identity Theft to Protect Your Credit (Part 2)
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Lynnette is a personal finance expert, author and speaker.