Last year the Federal Trade Commission received more than one-quarter million stolen identity complaints--and that's just the reported cases. Identity theft is the leading consumer complaint to the Federal Trade Commission. Of course, stealing your identity information isn't the worst of the crime; it's what the criminal does with the information that's damaging. Credit card fraud. Mortgage and utilities scams. Emptied bank accounts.
A Two-Part Crime
Identity theft is a two-step process. First, someone steals your personal information. Second, the thief uses 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.
Protect 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.
Some 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. Here are some basic tips to get you started:
Online identity theft is a large and growing problem. In phishing and pharming scams, thieves use fake emails and websites to impersonate legitimate organizations. They leverage your trust by tricking you into divulging personal information, like passwords or account numbers. Likewise, hackers and viruses can infiltrate your computer and install keystroke loggers to steal data or capture account names and passwords as you type them.
You can foil would-be identity thieves by being proactive.
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.
It can take several months for you to discover if you're a victim of identity theft. 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. If the financial companies you do business with offer activity alerts, sign up for them. And if you receive an alert or your financial institution reports unusual account activity, respond as soon as possible.
If someone has stolen your identity, quickly take steps to minimize the damage. 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 your local police and open a complaint with the Federal Trade Commission. Then, use public resources to find help to recover your losses and prevent further damage. Your state's attorney general, the Federal Trade Commission, and nonprofit identity theft protection organizations can provide assistance.
Identity theft has become 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.