Financial Crime Tips

Identity theft occurs when someone uses your persona identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes. The FTC estimates that as many as 9 million Americans have their identities stolen each year. In fact, you or someone you know may have experienced some form of identity theft.

The crime takes many forms. Maybe thieves rummaged through your trash, found a bank statement, and misused your checking account. Or, maybe they rented an apartment using your name. Maybe someone got a credit card using your identity and credit history, and bought expensive stereo equipment. Maybe you found out about it months later, when your loan application was rejected or when you noticed charges on your credit card statement that you didn't make.

Identity theft is serious. People whose identities have been stolen can spend hundreds of dollars and many days cleaning up the mess thieves have made of their good name and credit record.

The potential for damage, loss, and stress is considerable. Consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, housing, or cars because of negative information on their credit reports. They may even be arrested for crimes they did not commit.

What are the most common ways to commit identity theft?

Many people do not realize how easily criminals can obtain our personal data without having to break into our homes. In public places, for example, criminals may engage in "shoulder surfing" ­ watching you from a nearby location as you punch in your telephone calling card number or credit card number ­ or listen in on your conversation if you give your credit card number over the telephone to a hotel or rental car company.

Even the area near your home or office may not be secure. Some criminals engage in "dumpster diving" ­ going through your garbage cans or a communal dumpster or trash bin -- to obtain copies of your checks, credit card or bank statements, or other records that typically bear your name, address, and even your telephone number. These types of records make it easier for criminals to get control over accounts in your name and assume your identity.

If you receive applications for "preapproved" credit cards in the mail, but discard them without tearing up the enclosed materials, criminals may retrieve them and try to activate the cards for their use without your knowledge. (Some credit card companies, when sending credit cards, have adopted security measures that allow a card recipient to activate the card only from his or her home telephone number but this is not yet a universal practice.) Also, if your mail is delivered to a place where others have ready access to it, criminals may simply intercept and redirect your mail to another location.

In recent years, the Internet has become an appealing place for criminals to obtain identifying data, such as passwords or even banking information. In their haste to explore the exciting features of the Internet, many people respond to "spam" ­ unsolicited E-mail ­ that promises them some benefit but requests identifying data, without realizing that in many cases, the requester has no intention of keeping his promise. In some cases, criminals reportedly have used computer technology to obtain large amounts of personal data.

With enough identifying information about an individual, a criminal can take over that individual's identity to conduct a wide range of crimes: for example, false applications for loans and credit cards, fraudulent withdrawals from bank accounts, fraudulent use of telephone calling cards, or obtaining other goods or privileges which the criminal might be denied if he were to use his real name. If the criminal takes steps to ensure that bills for the falsely obtained credit cards, or bank statements showing the unauthorized withdrawals, are sent to an address other than the victim's, the victim may not become aware of what is happening until the criminal has already inflicted substantial damage on the victim's assets, credit, and reputation.

What Should I Do To Avoid Becoming A Victim Of Identity Theft?

Prevention is the first step in battling identity theft. To minimize the risk of someone's stealing your identity and the hassle of cleaning up the aftermath, follow these guidelines:

  • Carry only the credit cards and ID that you need to have with you; file others in a secure place.
  • Sign your credit cards immediately.
  • Do not carry your Social Security card with you. Keep it in a secure place.
  • Do not attach a Personal Identification Number (PIN) or Social Security number to any cards you carry with you.
  • Do not attach or write a PIN or Social Security number on anything you are going to discard (e.g. a receipt).
  • Shred any document that contains your Social Security number or a credit card number.
  • Check receipts and other documents to ensure they pertain to you and not someone else.
  • Alert any creditor if you do not receive your statement. Someone may have taken it from your mailbox.
  • Do not give personal information or account numbers to anyone until you have confirmed the identity of the person requesting the information and verified that you need to provide them with the information.
  • Check your credit report annually.
  • Immediately report the suspected theft or loss of a key identification document such as a driver's license, passport or Social Security card to the issuing agency.

What Should I Do If I've Become A Victim Of Identity Theft?

You should immediately take the following steps if you become a victim:

  • FIRST, contact the fraud department of each of the three major credit bureaus. Request that a "fraud alert" be placed on your credit file. This alert will warn creditors to be especially careful in authenticating the identity of anyone claiming to be you. This means you cannot obtain instant credit, a minor inconvenience in light of the damage identity theft can do.
  • File a report with your local police department and make sure to get a copy.
  • Contact each credit grantor who has opened a fraudulent account to let them know that you are not the person responsible for opening the account. Have them close these accounts. If you open new accounts, make sure to place passwords on them.
  • Call the Identity Theft Toll-free Hotline at 1-877-438-4338. This is the central point of contact within the federal government for reporting incidents of identity theft.
  • Remember to close the accounts that you know or believe have been tampered with or opened fraudulently.

Fighting Back Against Identity Theft