• What is Identity Theft?

    Identity theft is a criminal offense that is used to refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain. Personal identifying information includes "any name or number that may be used, alone or in conjunction with any other information, to assume the identity of an individual, including any name, address, telephone number, driver's license number, social security number, place of employment, employee identification number, mother's maiden name, demand deposit account number, savings account number, credit card number or computer password identification."

    How Significant is the Problem and What are the Costs?

    Identity theft is currently the fastest growing crime in America. The Federal Trade Commission estimates that 27 million Americans were victims of some kind of identity theft in the past five years. Every 79 seconds, a thief steals someone's identity, opens accounts in the victim's name and goes on a buying spree. One of every 23 consumers was the victim of identity theft last year. Victims spend between 30 and 60 hours of their time as well as approximately $1000 of their money clearing up the problem, after they've been victimized. During a 12 month period ending the summer of 2003, nearly 10 million Americans were victims of Identity Theft resulting in a total cost of approximately 5 billion dollars. The number of victims and their total losses are probably much higher. The major reason for this is that law enforcement agencies sometimes classify identity theft differently - it can involve credit card fraud, check fraud, Internet fraud, mail theft, or other crimes. Identity theft causes billions of dollars in losses for financial institutions and businesses as well. We all pay the price.

    In 2004, approximately 9.3 million people were the victim of identity theft. The most common identity theft complaint is credit card fraud; followed by phone or utility fraud; bank fraud; employment related fraud; government document or benefit fraud; and loan fraud.

    What are the Ways Identity Theft is Commonly Committed?

    Shoulder Surfing involves someone watching you from a nearby location as you punch in a telephone calling card number or credit card number. Shoulder surfing can also involve someone listening in on one of your conversations during which you give out your credit card number or personal data over the telephone.

    Dumpster Diving involves someone going through garbage cans, a communal dumpster or trash bin to obtain copies of checks, credit cards, bank statements, or other records that typically bear names, addresses or telephone numbers.

    The Internet may be utilized to commit identity theft when people respond to unsolicited e-mails such as SPAM that promise benefits but request identifying data.

    What Steps Can Individuals Take to Avoid Becoming a Victim?

    To reduce or minimize the risk of becoming a victim of identity theft or fraud, there are some basic steps you can take. These steps correspond to the acronym SCAM. This acronym stands for " Stingy, Check, Ask, and Maintain".

    • STINGY: Be stingy about giving out your personal information to others unless you have a reason to trust them, regardless of where you are. Adopt a "need to know" approach to your personal data. If you are traveling, have your mail held at your local post office or ask someone you know well and trust to collect and hold your mail while you're away. Shred and destroy unwanted documents that contain personal information. Furthermore, deposit mail in U.S. Postal Service collection boxes.
    • CHECK: Check your financial information regularly. Look for what should be there and what should not. You should be receiving monthly statements. If your not, call the financial institution or credit card company immediately and inquire. If you are told that your statements are being mailed to another address, tell them you did not authorize the change of address and that someone may be improperly using your accounts. Obtain copies of all statements since the last statement you received to help in determining whether or not some of those transactions were fraudulent. Review your statements closely to make sure there are no unauthorized transactions. Contact your financial institution or Credit Card Company immediately if there are any unauthorized transactions.
    • ASK: Periodically ask for a copy of your credit report from credit reporting bureaus such as Equifax, Experian, or Transunion. Your credit report should list all bank and financial accounts under you name.
    • MAINTAIN: Maintain careful records of your banking and financial accounts. You should retain your monthly statements and checks for at least one year, if not more. If you need to dispute a particular transaction, your original records will be more immediately accessible and useful to the institutions that you have contacted.

    Other steps you can take to avoid identity theft include the following: Sign new credit cards immediately and write "Ask for ID" on them. Watch cashiers closely. Watch anyone who handles your checks or plastic cards. Memorize your social security number and passwords. Do not use your date of birth as your password and do not record passwords on papers you carry with you. When using an ATM, be aware of your surroundings, i.e., someone attempting to get your PIN number. Also, be wary of the machine itself. Check to make sure that the machine has not been retrofitted with a skimming device that would capture the details of the transaction. Never leave transaction receipts at ATM machines, gas stations or points of sale.

    How Do I Use the Internet Wisely?

    Websites often leave personal information and financial data on the hard drive after a transaction. So avoid making holiday purchases from the computers at the public library. Many tech-savvy thieves use viruses and spyware capable of stealing account numbers and passwords right off your computer. Phishing attacks are also on the rise, and growing in sophistication. Phishing, also called "carding," is a high-tech scam that utilizes spam to deceive consumers into disclosing their credit card numbers, bank account information, Social Security numbers, passwords and other sensitive information. The request to provide such data is often motivated by so-called safety measures or the need to update data banks. Some phishing emails threaten a dire consequence if you don't respond.

    These tips can help you avoid getting hooked by a phishing scam:

    • Be careful when opening any attachments or downloading any files from emails;
    • Keep anti-virus software and a firewall up-to-date;
    • Do not disclose credit card or other financial account numbers on a web site unless the site offers a secure transaction. There are two ways to determine if it is a secure transaction:
      • An icon of a lock will appear in the bottom strip of the web browser page;
      • The URL for the web page will change from "http" to "https" for the page at which you input the personal data;
    • Do not reply to e-mails or pop-up messages that ask for personal or financial information.

    Even if you take all of these steps, however, it is still possible that you can become a victim of identity theft. Records containing your personal data - credit card receipts or car rental agreements, for example - may be found by or shared with someone who decides to use your personal data for fraudulent purposes.

    What Should You Do If You Become the Victim of Identity Theft?

    Call the fraud units of the three major credit bureaus and request a "fraud alert" be placed on your credit file. Order copies of your credit report from the credit bureaus to check whether any fraudulent accounts were opened without your knowledge or consent. Contact all creditors with whom your name or identifying data may have been fraudulently used. Furthermore, contact all financial institutions where you have accounts that an identity thief has taken over your account or where an account has been created in your name without your knowledge. You may have to cancel these accounts. You may also place stop payment orders on any outstanding checks that have not cleared, as well as change your ATM card, account, and PIN. Record the names and phone numbers of people with whom you discussed your case and retain all original reports and supporting documents. Finally, contact the Federal Trade Commission to report the situation or contact the Massachusetts State Police at 1-978-451-3550 for further investigation of information.

    To victims of identity theft and fraud, the task of correcting incorrect information about their financial and personal status, and trying to restore their good names and reputations, may seem like trying to solve a puzzle in which some of the pieces are missing and other pieces no longer fit as they once did. Unfortunately, the damage that criminals do in stealing another person's identity and using it to commit identity fraud often takes far longer to undo than it took the criminal to commit the crimes.