By Max Fischer
In today's high-tech world, where everything from banking to communications to shopping happens electronically, identity theft has become a growing concern. Although everyone is at some degree of risk, there are some simple but important steps you can take to protect yourself and avoid problems in the future.
What is Identity Theft?
Identity theft is a general term that comprises any unauthorized use of your personal information. This can mean theft and use of a credit card, or the unlawful use of your name, address, birth date, social security number, and personal passwords to access your bank account, rent or purchase an apartment or vehicle, or even to get a job.
The U.S. Federal Trade Commission (FTC) received 161,819 identity theft complaints in 2002 - five times the number reported in 2000. And this number continues to grow. The FTC believes there were roughly 10 million identity theft victims in 2004, with total losses of $54 billion.
Some forms of identity theft directly involve money - namely, a thief who accesses your credit card or bank account - but others affect victims in more subtle ways that are more difficult to detect. For example, an offender might use your name and credit score (or other aspects of your personal history) to obtain a job, rent an apartment, or even secure a mortgage. This kind of identity theft can often go unnoticed for years, and is sometimes only detected after extensive damage has been done to the victim's name or credit rating.
Take Steps to Prevent Identity Theft
Even if you're careful about disclosing credit card numbers and other personal information, your identity can be perpetrated by low-tech tactics, such as:
An employee in a store or restaurant watching over a customer's shoulder as they enter the access code for a debit or credit card
A thief slipping into a neighborhood and stealing a credit card bill, phone bill, bank statement, or other financial documents from mailboxes or garbage cans
A telephone caller posing as a representative from your bank or phone service provider, requesting personal information "to confirm your identity"
Be sure to take the necessary precautions to protect your personal information - especially when it's on paper! Below are some recommended safety measures:
Keep sensitive personal documents, like your birth certificate, passport, Social Security cards, and credit cards, in a home safe or safety deposit box when you aren't using them.
Avoid sharing personal information online. Even innocuous details, like posting your full name and birth date on social networking sites such as Facebook or giving out your home or business telephone number, can be dangerous in the hands of an identity thief.
Avoid giving personal information to anyone who claims to be calling from your phone provider or banking institution - instead, ask if you can take down their number and call them back, after verifying that the call is valid.
Shred or tear up credit card bills and other receipts before putting them in the garbage or recycling bin.
Do not respond directly to emails that ask for personal information. If the sender claims to be your bank or another institution, contact the company directly to ask them about the email first.
Check your credit card and debit card accounts regularly for unusual charges, especially small ones (like a dollar or less) that may be thieves testing the waters.
When traveling, cut up hotel key cards when you check out - these cards may contain financial and personal information that can be accessed after you leave.
Check your credit report on an annual basis. You can obtain a credit report for free once a year from annualcreditreport.com
Consider using an identity theft service to help monitor the use of your information, especially if you have lost your wallet or have been the victim of home theft. The long-term effectiveness of these fee-based programs is yet to be determined, but may give you added- if not bullet-proof- protection.
If You Are a Victim of Identity Theft
Even the most careful consumers can find themselves targeted by cunning perpetrators. If you discover that you have been the victim of identity theft, there are three steps you should take right away:
Immediately inform your bank or credit card company if you have had checks stolen or if you see charges that you didn't make.
Report any theft of money or use of your identity to the police. Even if your local police will not be the ones to investigate the theft, documenting the crime right away will create a "data trail" that can protect you in the long run.
Report the problem to the government agencies responsible for helping victims of identity theft. These agencies can assist you in tracking down the perpetrator and reclaiming your stolen identity. In the U.S., begin by submitting a claim to the Federal Trade using the form on the FTC identity theft website.
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