What is Identity Theft and How Can It Affect Me?
Identity theft is a serious crime affecting as many as 10 million Americans a year (as estimated by the Federal Trade Commission) and accounting for the loss of $221 billion a year worldwide (as estimated by the Aberdeen Group).
Identity theft occurs when someone uses your personally identifying information (like your name, social security number, or credit card information) to pretend to be you. The identity thief does this for his own personal gain at the expense of his victim.
This is fraud and it could result in serious consequences for the victim such as bad credit reports or even warrants for the victim's arrest, depending on what the thief chooses to do with the victim's personal information.
Why Do People Commit Identity Theft?
An identity thief may use your information to:
- Open a new credit card, phone, or utilities account in your name and then run up the bills without paying them. The delinquent account then appears on your credit report.
- Open a bank account and write bad cheques in your name, apply for a loan in your name, or use your bank information to drain your account.
- File a fraudulent tax return, or apply for government benefits in your name.
- Get a driver's license with your information but his own picture on it.
- Give your personal information to police during an arrest. Then when he does not show up for the court date, a warrant of arrest is issued in your name.
The possibilities for an identity thief are endless once he has your personal information, so you can see why this crime is so serious and why you should learn how to protect yourself from identity theft.
How Does Someone Steal an Identity?
There are a number of methods a skilled identity thief may use to steal your information. These include:
- Shoulder Surfing: watching you from a nearby location as you punch in your pin codes or listening as you give someone else your personal information over the phone
- Dumpster Diving: rummaging through your trash to find bills or other documents with your name and personal information on them
- Stealing: stealing mail (including bills, credit card statements, credit card offers, and tax information), or even stealing wallets and purses to gain access to documents with your personal information on them
- Bribing: bribing employees (such as government, bank, or credit card company employees) who have access to your personal information
- Pretexting: using false pretenses to obtain your personal information from banks, phone, credit companies, and other companies
- Skimming:using a special storage device to scan and remember your credit and debit card numbers when you use your cards
- Phishing: pretending to be a financial institution or other company (like a lotto company) and sending you spam or pop-up advertisements to persuade you to reveal your personal information
- Changing your address: completing a change of address form to divert your billing statements and other mail to another location where this information is easily accessible
Since there are so many ways an identity thief can steal your personally identifying information, it is imperative to learn how to protect yourself so it doesn't happen to you.