Identify theft. What is it and how do you protect yourself from it?

What is identity theft?

Identity theft is when a person steals personal information, such as the name, address, birth date, Social Security number or mother's maiden name from another person in order to commit fraud. The thief then uses this information to impersonate the victim and take over their financial identity.

With a relatively small amount of information criminal can taking over banking, insurance or investment accounts, open new bank accounts, purchase automobiles, apply for loans and credit cards, receive Social Security benefits, rent apartments, and even establish utility and phone company services, all under the stolen identity.

How do identity thieves get personal information?

While there is much in the media about internet based identity theft, there are lots of ways your personal information can be stolen, many of them much easier than internet theft.

-Stealing your wallet, purse, or checkbook.
-Removing mail from your mailbox, both incoming or outgoing.
-Going through your trash to find statements and receipts.
-Phishing - Obtaining information by email scams or fraudulent websites.
-Hacking Illegally gaining access to a computer where personal information is stored.
-Social Engineering- Simply tricking the victim into giving out personal information

Who is an identity thief?

Contrary to what many people think, identity thieves are not always sinister villains looking for victims. In fact, many studies show that a significant portion of identity theft actually occurs by people the victim knows and trusts.

-Opportunity criminals who chance upon your personal information
-Organized criminals who actively seek victims
-Husbands and wives who use their spouse's information to open accounts to take money
-Roommates
-A person you meet at a party who has lots of questions about your personal life
-Parents who use a childs identity
-Children who use a parents identity
-Housekeepers, contractors or others who have access to your home

How do I protect myself from identity theft?

By taking a few precautions you can limit the opportunity for an identity thief to steal your personal information.

Safeguard and protect your personal information

-Dont carry important documents such as Social Security cards, passports, or birth certificates in your purse or wallet. Keep important documents in a safe place at home or in a safe deposit box at the bank. Only carry them when you need them.
-Shred any receipts, financial statements, documents, or bank statements, including credit card bills, before disposing of them.
Immediately report lost or stolen checks immediately to your bank or other financial institution.
-Immediately report lost or stolen debit or credit cards.
-Always store checks in a safe place including cancelled ones. Ask your bank if they will store your checks instead of returning them in the mail.
-Store any account numbers in a safe place and dont write down passwords for internet sites that contain personal information such as internet banking sites.
-Reconcile your banking statements regularly and consider using your banks internet banking service to monitor your accounts regularly. Studies show that identify theft is caught quicker and is less costly by victims who use check their accounts regularly.
-Remove mail from your mailbox as soon after delivery as possible. When mailing bills and credit card payments, take them to a post office or place them in a secure, official U.S. Postal Service collection box.
-Consider using an internet banking service to pay bills since even if there is a loss your bank may be obligated to refund your losses. Be sure to check your banks terms and conditions.
-Promptly notify your bank and other creditors when you move or change your phone number or email address.
-Contact creditors if your regular bills do not arrive when expected.

Dont give away your personal information

Careless conversations can be the best source of identity theft. Make sure you don't make yourself a victim by giving away your confidential information.

- Don't give out personal information, such as your Social Security number or account numbers, over the telephone unless you initiated the call and you know with whom you are dealing.
-If you receive any telephone calls asking for personal information dont give out personal information until you can verify to the call is legitimate. A good way to do this is to call the customer service number printed on your statement.
-Confirm why personal information is needed before giving it out and even then only give out what is absolutely necessary.
-Register your home and cell phone numbers with the Federal Do Not Call Registry to reduce some unsolicited calls.

Review your credit report regularly

Your credit report shows most accounts and balances opened using your information. Accounts that you cant recognize or that have unexplained balances could be signs that your identity has been stolen.

-Review your credit report from the three major agencies at least annually to confirm there were no unauthorized credit inquiries made or accounts opened in your name.
-Consider using one of the credit report monitoring services offered by the major credit reporting agencies.
-In the US you are eligible for a free copy of your credit report under the Fair and Accurate Credit Transactions Act (FACT Act). The FACT Act requires the three major credit reporting agencies to provide consumers with a free copy of their own credit report each year.

To obtain a free credit report contact:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta , GA 30348-5281
1-877-322-8228

What do I do if I think I am a victim of Identity Theft?

-Immediately contact the fraud division of the credit reporting agencies and request that a "fraud alert" be placed in your file. Ask that no new credit be granted without your approval.
-Notify the Social Security Administration by calling 1-800-772-1213.
-Notify all of your creditors of the fraud.
-File a report with your local law enforcement authority.
-Report the fraud to the Federal Trade Commission (FTC) at 1-877-438-4338. The FTC is the clearinghouse for identity theft complaints. They provide information to help resolve financial problems that result from identity theft.
-The FTC provides an ID Theft Affidavit which you should complete as soon as possible after you become aware of the fraud. Completing this affidavit can help protect you from responsibility for fraudulent charges on your accounts.
-Keep detailed records of all events once you determine that your identity has been stolen. Include names, telephone numbers, and the date and time you made contact with individuals or companies requesting assistance in recovering your good name.

While no one can be completely safe from Identity theft, simply taking the time to safeguard your information reduce that likelihood. You can also significantly reduce the amount of time and money you spend to recover your identity if you are prepared before you become a victim.

Aubrey Jones is President and founder of Riverbank Consulting, Inc. Since 1996 he has worked to protect internet banking clients for one of the top US financial institutions.