Identity Theft Frequently Asked Questions
You’ve got questions, we’ve got answers. If you’re considering identity theft protection, you probably have questions about how identity theft happens and how to best protect yourself. This is a collection of the most frequently asked questions about identity theft protection.
- What is Identity Theft?
- Why do I need an Identity Theft Protection Service?
- How do Identity Thieves steal your identity?
- What are the chances of me being a victim of Identity Theft?
- How can you find out if your identity was stolen?
- How much would identity theft really cost me?
- What is the best way to prevent identity theft?
What is Identity Theft?
Identity theft occurs when someone gains unauthorized access to sensitive personal information, such as your Social Security number, driver’s license, or date of birth. Once this information is obtained, identity thieves can commit crimes, open lines of credit, or go on shopping sprees – all in your name. Some identity thieves get access to personal information by looting stolen wallets. Others get the information by stealing mail or hacking into databases. Though the methods vary, the result of identity theft is always the same: unfair hardship for the victim.
Identity thieves operate for all sorts of reasons. Most identity thefts involve credit card fraud. That is, the thieves either take over the victim’s current credit card accounts or use the victim’s identity to get approval for new credit cards. Thieves also commonly use stolen information to set up utilities and cell phone accounts. Check and bank account fraud are also common. By gaining access to someone’s personal information, identity thieves can use that person’s bank account to transfer money or write checks in the victim’s name. These unauthorized activities are illegal and potentially damaging to the victim’s finances, credit and reputation.
Why do I need an Identity Theft Protection Service?
Identity theft protection services provide protection on a number of levels. Monitoring your credit report for fraudulent activity is one way to catch identity theft before anything catastrophic happens. Identity theft protection services help you subscribe to credit monitoring programs. They also help you place a freeze on your credit when you think you might be at risk of identity theft. These freezes prevent anyone from opening a line of credit in your name. The freeze can be lifted when you want to apply for credit, then reinstated quickly thereafter.
Identity theft protection services can also get you removed from mailing lists and pre-approved credit card mailings. These letters are one of the primary ways that thieves gain access to your information. By removing your name from these and other unsolicited mailings, your chance of becoming an identity theft victim is reduced.
If your identity is stolen while you’re subscribed to an identity theft protection service, your service provider might reimburse you for financial losses. Some services like Lifelock will also take charge of your legal interests and guide you through reclaiming your identity and repairing whatever damage has been done. Others help you find out if your personal information has been made public on the Internet.
Identity theft protection services vary, so if you decide to use one, be sure that you understand the benefits they offer.
How do Identity Thieves steal your identity?
Twenty years ago, identity theft was mostly carried out by people who had legitimate access to the personal information of their victims. Co-workers, bosses, friends and neighbors were common culprits. Information was also collected through fraudulent phone calls, simple mail theft, or “dumpster diving” – digging through garbage to find documents containing personally identifying information.
These days, identity thieves have added some new tricks to their repertoire. They use the Internet to their advantage by sending out phony e-mails that appear to be from a trusted company. When you click the links in these e-mails, you are redirected to the company’s web site. But this isn’t the actual web site at all – it’s a clever fake designed to look just like the login page for sites like Ebay, PayPal, or even your own bank. When you log in with your username and password, the thieves record the information for their own use. This scam is called “phishing”.
Phishing can also be done over the phone. Someone posing as a bank representative or IRS official might call and ask you to verify your Social Security number and date of birth. Sometimes they leave a message asking you to call them back with the information. The calls usually sound official, and most victims don’t realize they’ve given their information to a thief until it’s too late.
Identity thieves also steal your identity by hacking into computer systems where your personal information is stored. There are computer viruses designed specifically to harvest your information and send it to thieves who will use it for their own gain. There are even hand-held devices which can be purchased for the express purpose of swiping credit card numbers from unsuspecting customers. And, of course, simply finding personal documents in a lost wallet or purse will suffice.
What are the chances of me being a victim of Identity Theft?
In 2006, 15 million Americans were victims of identity theft. That’s a new victim every two seconds. Considering that the number of victims has more than doubled each year, it’s very likely that you will someday be targeted by identity thieves.
Some people have a higher risk level than others. For example, you’re more likely to be targeted if you’re an Internet user. Over a hundred million people receive phishing e-mails each year. If you don’t use a good firewall to protect your connection, your personal information is just waiting for identity thieves to come and steal it. If you use your credit or debit card to make purchases online, you run the risk of someone stealing your card numbers.
Your location is also linked to your risk level. New York, California, Nevada, Arizona, Washington, and Texas have more identity theft victims per capita than any other states in America.
Do you receive pre-screened credit card offers in the mail each week? If you discard those letters without shredding or otherwise destroying them, thieves can steal them and open lines of credit in your name. Having your Social Security number printed on your driver’s license or checks is another risk factor. You’re also at risk of identity theft if you don’t keep a close eye on your bank and credit card statements and your credit report.
How can you find out if your identity was stolen?
If your identity has been stolen, you could find out in a number of ways. Some victims find out by carefully monitoring their credit reports and monthly bills. They realize that something’s wrong when they see unauthorized charges to their credit cards or bank account, or new lines of credit that they didn’t apply for. These victims are the lucky ones; they typically catch the identity theft soon after it occurs. Identity theft monitoring services are very helpful for catching crimes before major damage has been done.
Other victims aren’t so fortunate. Some people learn that their identity has been stolen when they receive calls from bill collectors regarding overdue and fraudulent debts. Other victims learn of the theft when they receive mailings regarding rental properties or jobs they’ve never heard of before. Since some identity thieves use other people’s personal information to secure government benefits or even citizenship, victims might learn of the theft when they’re contacted by government officials. It’s also common for victims of identity theft to get denied for a loan because of outstanding items on their credit reports. When such denials occur, the applicants realize that they’ve been victimized.
How much would identity theft really cost me?
That depends. If your identity were stolen tomorrow, think of the amount of money the thieves would have access to between your bank accounts and credit cards. Also, remember that thieves often open new lines of credit and run up debts in their victims’ names. Until you’ve proven yourself to be a victim, you could be held accountable for those debts – and your credit score could suffer as a result.
Consider the time that would be spent investigating whether charges to your account were fraudulent or authorized. Even if you managed to clear your name, reimbursement could take months. Cleaning up your credit score could take just as long or longer. And that’s not even factoring in the money you’d spend hiring a lawyer to represent you if worse came to worst. Imagine what could happen if someone committed crimes under your identity. A routine traffic stop could land you in jail until your name was cleared.
The loss of a sense of security is also significant. Most victims of identity theft feel violated. Many live in fear, feeling helpless to prevent another theft from occurring. So the short answer to this question is: a lot.
What is the best way to prevent identity theft?
There are plenty of steps you can take to avoid being a victim of identity theft. Vigilance is the most important precautionary measure. Watch your expenses closely. Look for charges to your bank accounts or credit cards that you don’t remember authorizing. Subscribe to a credit monitoring service to be notified any time someone tries to open a new line of credit in your name.
When you’re using the computer, be sure to keep a firewall active to keep intruders out of your personal files. Never trust links that you get through e-mail. To be sure you’re going to the right web site and not falling into some phisher’s trap, type in the web site’s URL manually. Never give out your Social Security number or financial information over the phone or e-mail.
Never display your Social Security number on other documents, such as your driver’s license or personal checks. You can also request that credit bureaus only display the last 4 digits of your Social Security number on your credit report. Leave your Social Security card in a safe place unless you know you’ll need it; carrying it in your wallet every day increases your odds of becoming a victim.
If you’ve recently lost your wallet or credit cards, get in touch with the credit card company to immediately cancel the accounts. Then call the three major credit bureaus (TransUnion, Experian, and Equifax) to place a freeze on your credit. This will prevent anyone from opening a new line of credit in your name, minimizing the damage that identity thieves can do.