Identity theft is the fastest-growing white-collar crime in America. Identity theft is defined as stealing another person's personal identification information (e.g., Social Security number) and using it for personal gain. According to the Federal Trade Commission (FTC), "The dismal news is that you can never fully prevent identity theft, no matter how cautious you are. But you can minimize the risk."
Identity theft is not typically a "stand-alone" crime but, rather, part of another crime such as credit card fraud. The two major components of identity theft are a Social Security card and a driver's license. These are the two most commonly misused forms of identification. Cards (e.g., health insurance, college IDs) that use a person's Social Security number are also used to commit fraud.
Identity theft occurs in the following ways: stolen wallets or purses, stolen mail, a phony change of address form used to divert mail to another location, and rummaging through garbage for identifying information (a practice known as "dumpster diving"). Also, fraudulently obtaining a person's credit report (e.g., posing as a landlord), personal information on the Internet, information found in a person's home (e.g., a dishonest roommate), and crooks calling a victim's credit card issuer and requesting a change of address so that unauthorized charges are not immediately detected.
Identity theft also includes cases where cellular telephone service is opened in a victim's name, as well as bank accounts where checks are "bounced." There are also cases where crooks buy expensive cars by taking out car loans in a victim's name. Some imposters even go so far as filing bankruptcy, of course, pretending to be someone else.
The FTC receives about 3,000 calls per week about identity theft. Their statistics show that 30% of victims notice signs of identity theft (e.g., bills that are not theirs) within one month. Domestic fraud is also an issue. About 14% of complainants had a personal relationship with the suspect (e.g., boyfriend or roommate).
Identity theft can result in both monetary harm and non-monetary harm. Examples of non-monetary harm are time spent trying to resolve credit problems, lost productivity at work, and emotional distress.
Below are some suggestions to reduce the risk of identity theft:
Buy a shredder and shred all documents with identifying information (e.g., credit card receipts, account statements). A diamond-cut shredder is better than a straight-line shredder. If you have a vertical shredder, toss the shredded pieces around before disposing of them.
Deposit outgoing mail in collection boxes or at the Post Office - not in unsecured mail receptacles.
Promptly remove mail from mailboxes as soon as possible.
Never give personal information over the phone to "cold callers" wanting to "verify numbers."
Empty your wallet of excess credit cards (carry one) and cards with your Social Security number imprinted on them (e.g., health insurance card: carry it only when needed).
Memorize your Social Security number and passwords. Do not record them on any cards or anything in your wallet or purse.
Order a credit report once a year from the three major credit reporting agencies: Equifax, Experian, and Trans Union. A form to do this is on the Rutgers Cooperative Extension MONEY 2000 Web site, www.rce.rutgers.edu/money2000. Copies are free once a year to New Jersey residents.
Never leave receipts at bank ATM machines. Don't leave credit card receipts in shopping bags.
Save all credit card receipts and match them against monthly bills.
Be conscious of routine financial statement due dates and follow up with creditors if bills are late.
Use caution when posting personal information on Web sites and use secured sites for purchases.