In the broadest sense, identity theft occurs any time a
person pretends to be someone else. However the
term usually means more than just impersonation -- it refers
to stealing identity in order to steal something else, usually
something of financial value.
What are the most common identity crimes? Nothing
fancy. Old-fashioned credit card fraud tops the
list (28% in 2004), followed by phone or utilities fraud (20%),
bank fraud (18%) and employment fraud (13%).
You may have heard that identity theft is one of the fastest
growing crimes in the U.S., affecting tens of millions of
persons a year. Fortunately, in most cases the individual
theft is not a large one -- the average loss is $200 to $250.
But the total losses add up to more than half a billion
dollars a year.
The most severe form of identity theft occurs when someone
appropriates your identity repeatedly, and destroys your credit
rating and finances in the process. That is a crime
from which it can take years to recover. Fortunately, it
is comparatively rare, although its rarity will be of little
comfort if it happens to you.
How does it happen?
Some ID thieves use stolen personal information to open new
credit card accounts (19%). Others simply commit
fraud with existing credit card accounts (12%). Opening
up new telephone or other utility accounts is a particularly
popular type of theft, with new wireless phone accounts most
popular of all (10%).
How do thieves get such information? Too often, the
victim simply hands it over, by providing credit card or other
personal information to the wrong person.
Today the majority of fraud complaints to the Federal Trade
Commission (FTC) involve Internet-related fraud complaints
-- about 35% related to email and 25% to web sites.
(After that comes the telephone and then postal contacts.)
If you don't want to become a victim, you need to be particularly
vigilant about spam email, which
is increasingly used for phishing
attacks that trick the unsuspecting into handing over
It doesn't have to be a high-tech theft, however. Many
experts believe that the majority of identity thefts are effected by
using information that victims have literally thrown away,
such as credit card receipts and statements in the garbage.
While it is important to take steps to protect Internet
thefts, such as learning how to avoid being phished, one of
the best things you can do to prevent identity theft
is purchase a shredder to prevent such "dumpster
Identity theft is different from most types of crime in
that many victims don't know they've been victimized, at least
not right away. They find out about the crime only
when they are denied credit or employment, contacted by the
police, or have to deal with collection agencies, credit card
issuers, and bills for purchases they never made.
It is precisely this form of identity theft -- undetected
for a long time, while fraudulent charges pile up -- that
can lead to severe problems.
Check your bank, credit card and other online accounts frequently
and carefully. Make sure all listed transactions are
valid, and if they aren't contact the company immediately.
Get a copy of your credit report regularly, and inspect it
for errors. (You're entitled to one
free report per year from each of the big three
credit bureaus.) Report anything that is suspicious
Should you be worried?
You should be worried enough to be vigilant, but not lose
sleep. Identity fraud detected early is usually a minor
inconvenience. In most cases, your credit card
issuer or bank will be responsible for the losses, not
you. The cost to you will be the time to sort it out.
But imagine working for years to build a good credit
history, only to find yourself suddenly inundated with
debt, credit card balances, outstanding utility bills, lost
employment benefits, and having your credit rating destroyed.
Victims of severe identity theft find themselves unable to
open a new credit card account, get approval for loans or
mortgages, obtain mobile phone or other utility accounts --
all because of what has been done using the identity. Don't
make it easy for thieves to do it to you.
Concerns at work
Your employer certainly hopes you never become a victim of
personal identity theft, of course. But its greater
worry is that your workplace identity may be stolen, and used
to access sensitive organizational information.
That can happen in two ways. Your ID badge may
be stolen, allowing physical access to facilities containing
sensitive information. Or a computer account user-ID
and password assigned to you (a virtual ID badge) may be discovered,
allowing an intruder to gain electronic access.
Be vigilant, and make a report to the appropriate organizational
security department if you suspect your workplace identity
has been compromised.
Theft: What to Do If It Happens to You (Privacy Rights Clearinghouse)
Comprehensive guide for victims of identity theft
Theft Resource Center
Resources for prevention and recovery
theft statistics (Federal Trade Commission)
More than you'd ever want to know about the numbers
Phishing and identity theft (UM Privacy
Basic rules for avoiding the problem
To Do If You've Given Out Your Personal Financial Information
(Anti-Phishing Working Group)
Another comprehensive guide for victims and potential victims