Consider the credit lines on all your credit cards. Consider checks drawn on your checking account—even if they bounce due to insufficient funds. Consider the amount of loans you might qualify for based on your credit score. In the wrong hands, your personal identifying information can be worth far more than your current net worth. And the cost of identity theft goes way beyond monetary value.

Monetary Losses Caused by Identity Theft

In 2007, identity thieves racked up over $49 billion in cash, goods, and services in the United States—at an average expense of $5,720 per victim (data from Javelin Strategy and Research). That is a hefty burden in today’s tough economic times.

Annual Federal Trade Commission reports offer a glimpse at the prevalence and impacts of ID theft on victims in the United States. The FTC’s 2006 Identity Theft Survey Report prepared by Synovate in 2007 indicates a more modest $500 median value of goods and services obtained by identity thieves. In many cases, the report says, victims suffer little or no actual out-of-pocket losses because they are not legally responsible for the credit debt racked up by thieves. The report is based on data from a random telephone survey of 4,917 US adults; data were extrapolated to estimate the percent of the total adult population victimized by identity thieves in 2006.

For more on the prevalence and classification of ID theft in the US, see Stolen Credit Card, Stolen Identity: Are They the Same?

Nonmonetary Harm Caused by Identity Theft

While the financial implications of identity theft are staggering, the out-of-pocket figures do not include related costs, such as interest, bank and attorney’s fees; damage to your credit score; and the value of the time, pain, and suffering victims endure as they try to reclaim their identities and regain control of their finances. Thirty-seven percent of victims identified by the FTC survey reported experiencing other problems as a result of misuse of their personal information. The problems victims reported include:

• being harassed by collections agents
• being denied new credit
• being unable to use existing credit cards
• being unable to obtain loans
• having their utilities cut off
• being subject to a criminal investigation or civil suit
• being arrested
• having difficulties obtaining or accessing bank accounts.

Future Trends for Identity Theft in the United States

Despite the dismal dark cloud described above, there is a silver lining: the rate of identity theft seems to be declining. “Once noted as the nation’s fastest growing crime, identity fraud will experience a steady decrease in number of victims and total one-year fraud amounts from 2008 to 2013,” says Javelin Strategy and Research.

Whether unstable economic times reverse that trend remains to be seen. The best advice for consumers is to play good defense: safeguard your personal information, regularly monitor the activity in all of your financial accounts, and immediately report any fraudulent activity.

The first two days of my trip were uneventful.  I sent my goodnight hugs and kisses over the line and racked up long distance charges in the “priceless” category.  But by day three I had a problem.  My call would not go through.  Despite a large available credit line, my card was declined on several attempts.  I eventually gave up and dialed direct from my hotel room.  I knew the exorbitant charges would exceed my travel budget but I was desperate to hear my little girl’s voice. 

Problem solved, I put the credit card issue out of my mind.  When I got home I would call and straighten it out.  Perhaps the procedure for placing calls had changed, I thought.  But a couple of days later when I was checking out of the hotel my card was again declined.  Now I really had a problem.  I did not have any other credit cards with me and my bill was several hundred dollars.  I was forced to call the credit company on the spot. 

It turns out my sudden trip across the country and rash of long-distance phone calls were picked up as potentially “fraudulent credit behavior,” which triggered a fraud alert and prompted my credit card company to freeze my credit card account.  After answering a few security questions I was able to establish myself as the rightful owner my credit card and my charge privileges were reinstated. 

I admit I was a bit peeved at first; it’s rather embarrassing to have your card declined–especially when you know you have not exceeded your limits–and I felt violated.  But as my anger subsided I realized I was lucky.  If my card had, indeed, been stolen, the thief’s shopping spree would have been short lived!

So when a thief steals your credit card, is your identity compromised? The answer is yes! 

Classifying Identity Theft

The Federal Trade Commission (FTC) classifies identity theft into three categories as defined by federal law. Those categories, listed in increasing order of magnitude of harm, are:

• Existing Credit Cards Only
• Existing Non-Credit Card Accounts
• New Accounts And Other Frauds

Harm is measured by factors such as the total out-of-pocket losses incurred, the amount of time it takes to recover from the theft, and the additional problems caused by the theft, such as harm to your credit scores, repossession of your car, or loss of a job.  When a thief steals your credit card you become vulnerable.  In the wrong hands your personal information can potentially snowball into catastrophic losses. 

An FTC report survey suggests as many as 8.3 million U.S. adults (3.7 percent) were victims of ID theft in 2005. Of those, approximately 3.2 million (1.4 percent) were classified in the “Existing Credit Cards Only” category. Approximately 3.3 million (1.5 percent) reported losses involving non-credit card accounts such as checking or savings accounts or telephone accounts and were classified in  “Existing Non-Credit Card Accounts” category. The remaining 1.8 million (0.8 percent) reported the most serious type of identity theft “New Accounts & Other Fraud.” (Statistics extrapolated from a random telephone survey conducted in 2006 of 4,917 U.S. adults.)

Federal Laws Protecting You from Identity Theft

Just ten years ago, prior to the fall of 1998, no federal laws specifically prohibited identity theft in the United States.  Violators could not be prosecuted for the act of intentionally using someone else’s PII for financial gain; they could only be held accountable for lesser crimes for which laws were in place to prosecute them.

To address this growing violation, congress enacted the Identity Theft and Assumption Deterrence Act (18 U.S.C.§1028(a)(7)) to allow prosecution of anyone who, “knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of the Federal law, or that constitutes a felony under any applicable State or local law.”

Today identity theft is a serious federal crime punishable by up to 15 years in prison, a fine, and criminal forfeiture of any personal property used or intended to be used to commit the offense.  The United States Secret Service, the Federal Bureau of Investigation, and the United States Postal Inspection Service work diligently to identity cases of identity theft and fraud, and to aid prosecutors in bringing violators to justice.

Other federal statutes often apply in cases of identity theft:

• 18 U.S.C. § 1028, identification fraud
• 18 U.S.C. § 1029, credit card fraud
• 18 U.S.C. § 1030, computer fraud
• 18 U.S.C. § 1341, mail fraud
• 18 U.S.C. § 1343, wire fraud
• 18 U.S.C. § 1344, financial institution fraud

For more information about federal government efforts to curb and control identity theft in the United States, visit the United States Department of Justice, Office of Legal Policy Web site.

My Story of Identity Theft

About a year ago I was a bit off my beaten path and stopped into a different supermarket and used my credit card to pay for the items. Although most of the clerks at my usual store know me by name, I was not surprised when the unfamiliar clerk asked for my ID. She quickly glanced at my driver’s license–presumably comparing the signature to my credit card–and then handed it back to me. She proceeded to complete my transaction and I signed the slip and was on my way.

The next morning I received a call from my credit card company inquiring whether I had lost my credit card.

“No,” I replied. “I just used it at the supermarket last night.”

“Perhaps you could check, just to be sure,” the voice on the phone urged. And sure enough, when I checked my purse it was gone.

My credit card had been used to pay for groceries three times within a half an hour. My transaction was about $48; the next two totaled more than $300. More transactions quickly followed: two tank loads of gasoline from a nearby service station. The sudden irregular activity had triggered a red flag, alerting my credit company to potential fraudulent activity before I even realized my card was missing.

In retrospect, realized that perhaps the clerk who asked for my ID was memorizing my zip code (after all, that’s all you need to “pay at the pump” with a credit card). Although she returned my ID right away, she held the card to complete the transaction. I later learned that the clerk and the bag boy were working together; he distracted me and I did not realize that she never returned my credit card.

I feel fortunate that my credit card company knew my patterns and recognized the theft so quickly. I also feel fortunate because, although the thieves were able to steal my credit card they did not steal my identity. (See Stolen Credit Card, Stolen Identity: Are They the Same?)

Protect your personal information

Whether it’s a guy on the phone offering you a $500 gift card to Target or a woman claiming to be from your bank, you need to be very careful about giving out your personal information. A reputable organization will ask you for your mother’s maiden name, for example, when you call to inquire about an account you already have. An identity thief will most likely call you, asking for information that a reputable organization would already have on file. See some of the more common methods of getting information from you, and how to avoid them.

When you leave town, ask your local post office to hold your mail until you come back. You could also ask a friend, relative or a neighbor you know and trust to collect your mail for you while you’re away.

Check your financial statements every month

Read all of your monthly statements carefully to see if there are any unauthorized charges. If you see any, contact your financial institution or credit card company to report them and to ask about the next steps.

If you’re not receiving monthly statements from your bank, credit card company or other financial institutions, contact them immediately. This could mean that an identity thief has gotten hold of your account information and has perhaps taken control of your account(s). Work with your financial institution or credit card company to get the missing statements so that you and the company/institution can determine how many of the charges are fraudulent.

It’s also a good idea to order a copy of your credit report every six months. That’s one of the quickest ways to see if any accounts have been opened in your name by someone other than yourself.

Other things you can do to reduce the risk of becoming a victim of identity theft:

• Invest in a shredder- Identity thieves often go through other people’s trash in order to get their personal information. Getting a $20 shredder and destroying all mail with sensitive information (credit card offers, statements from your financial institutions, etc) will stop identity thieves dead in their tracks.
• Keep the volume of your voice down when completing public transactions- The teller behind the glass can hear you just fine if your voice is at a normal conversational volume. There’s no need to shout.
• Keep a list of all your credit and bank accounts in a safe place- If your credit and bank cards are stolen, you can immediately contact all of the companies and institutions and alert them to the possibility of fraudulent use on your accounts. On this list, include account numbers, expiration dates, and telephone numbers of customer service and fraud departments.
• Don’t carry around extra credit cards, your Social Security card, your birth certificate or passport except when absolutely necessary. This greatly reduces the amount of information that an identity thief can steal.
• Remove your name from junk mail lists-Everyone gets those pre-approved offers for credit cards. Identity thieves love them because these offers have sensitive personal information printed on them. Remove your name from junk mail lists for two years by calling 888-5OPTOUT (888-567-8688).
• Never mail bills or tax forms from your personal mailbox-It might be more convenient to use the mailbox down the street, but it’s too easy for an identity thief to get into the mailbox, steal your checks and dip them into special chemicals. Once that’s done, all they have to do is write the checks out to themselves. Mail your bills and tax forms from the post office.
• Check your credit score regularly.

Being a victim of identity theft can cost a lot in terms of time, money and resources. In order to lessen the monetary costs, the best thing to do is to report all instances of fraud in a timely manner. How quickly you report fraudulent activity and use on your accounts can greatly determine how much you’ll be held liable for.

If you’re a victim of identity theft, carefully follow these steps so that your name-and your mind-can be clear.

1. Place a fraud alert on your credit reports- Fraud alerts can stop an identity thief from opening any more accounts in your name. You can contact any one of the three major consumer reporting companies to place a fraud alert on your credit report. The company that you contact is required to contact the other two, so you only need to do it once.
2. Once the fraud alert is in your file, you’re entitled to order free copies of your credit report. If you ask, only the last four digits of your social security number will appear on the reports. This is a good thing to ask for. You can never be too safe.
3. Contact the creditors (credit card companies, utilities, banks, other lenders)- Close any and all accounts that have been opened fraudulently or otherwise tampered with. Ask to speak to someone in the fraud department of each creditor, then follow up in writing. It’s really important that credit card companies are notified in writing. It’s also a good idea to ask your creditors for a copy of the application or other business transaction records relating to your identity theft. Creditors are required to give you this information free of charge.
4. File a report with your local police- Obtain a copy of the report in case your creditors, credit bureaus or anyone else needs proof that a crime occurred.
5. File a complaint with the FTC- On its website, the Federal Trade Commission has a form that identity theft victims can fill out. The FTC keeps a database of identity theft cases which law enforcement agencies use for investigations.

Organization tips for the Identity Theft Victim

• Follow up in writing all contacts you’ve made on the phone or in person. Use certified mail, return receipt requested.
• Keep copies of all letters or forms that you send out.
• Keep a list of everyone you talk to, what you were told, and the date of the conversation.
• Keep the originals of all documentation. Share only the copies.

One of the best ways to protect yourself is to become familiar with the different types of identity theft, as well as the ways in which identity thieves steal the information of unsuspecting victims.

Types of Identity Theft

Identity theft can be broken down into four categories:

• Financial Identity Theft- Someone uses another person’s information to obtain things such as loans and credit cards

• Criminal Identity Theft- e.g. An individual gives another person’s name when they’re arrested for a crime

• Identity Cloning- occurs when someone assumes another person’s identity in daily life, e.g. applying for jobs, housing, etc.

• Business Identity Theft– When a business’ name is used to obtain credit illegally.

How Identity Thieves Steal Your Personal Information

There are a myriad of ways in which identity thieves steal personal information from unsuspecting victims. It’s almost impossible to list all the ways personal information can be stolen. Here are some of the more popular methods of identity theft:

• stealing mail from your mailbox

• going through your garbage

• pickpocketing

• shoulder surfing- listening in on public transactions to obtain personal information, e.g. at banks

• stealing personal information from computer databases, also called hacking

• fake job offers that you receive in your e-mail inbox. The message will usually ask for your full name, address, resume, phone numbers and banking details.

• infiltration of organizations that store the personal information of their customers

You might read this and think, “All this is good to know, but what can I do to prevent this from happening to me?” Read  How to Reduce Your Risk of Becoming a Victim and find out.

Like millions of Americans, I was a victim of identity theft, and if you’ve been a victim, please share your story so we can help others learn. For me, it all started when I noticed that a credit card company (of which I was not a customer) was sending me checks. I didn’t pay any attention to it at first (bad move).

When they kept sending me checks, a friend suggested that I call the company and ask them what was going on. She didn’t explicitly say anything about identity theft, but that was probably at the back of her mind. It should have been at the front of mine.

I called the company and the representative told me that a credit card was opened in my name. Trying to be as calm as I possibly could, I told them that I did not apply for a credit card. After assuring me that this card was never used, the rep said that they would take care of everything.

When I hung up the phone, I felt violated and unsafe. I had become a victim of identity theft. To make myself feel better, I checked my credit reports to make sure that this person didn’t open up any other accounts in my name. Luckily, they didn’t. I found out later that it was a relative that stole my identity.

I realize now that I was lucky. Most victims of identity theft end up spending far more time and money than I did in reclaiming their name. Most victims also have more intelligent thieves stealing their information.

Hopefully, this site will help people who are currently victims of identity theft. This site is also for people who want to make sure they never become victims. Unlike most of the identity theft blogs and websites out on the web, this one will actually be updated with news, articles, interviews and tips.

Look through the site, follow the tips and leave a comment. I look forward to hearing from you!

Identity theft can be a very lucrative practice, right up until you get caught. One Philadelphia couple lived their entire life that way. Living in a high rise luxury apartment under false names and credit, they financed their jet setter lives with fraud and identity theft. They broke into the mail and homes of their neighbors, created fake id’s with their own pictures and others’ names and information.Received credit cards that they never had to pay back, took out loans for things that others would one day have to pay. They passed bad checks, and lied, cheated, and stole their way, right into prison. Its the end for all identity thieves, and should you be a victim, its where you want to send them. We have outlined the the steps to follow the moment you think you may be a victim of identity theft. With your help, we can put more identity thieves exactly where they belong. In prison.

Identity thieves use a variety of methods to take your information. Here are some of the most common.

Dumpster Diving

Identity thieves will target neighborhoods, and go through trash cans. This gives them credit card numbers, addresses, names, birth dates and other information they can use to secure more. Invest in a shredder, to make any documents you throw away unreadable and unusable.

The Direct Approach

Identity thieves will call you, pretending to be someone else. Perhaps they are pretending to sell something, or be from your bank, or doing a survey of some kind. Never give anyone who calls you personal information. If they claim that its an important call from your bank, or any similar organization, they will never ask you for information. They will also not ask you to “confirm” information, such as asking, “Do you still live on Elm street?”. Thank them for calling, hang up, and call the institution they are claiming to be from directly, using a number already known to you.

Phishing

This is a term for an email method of doing the same as the direct approach. The email appears to be from your bank, or paypal, or ebay, or any of a hundred online services. When you click on the link in the email, you reach a page that appears to be that of the organization they are pretending to be. Again, always go back to the web page using a web address already known to you, not through the link.

Outright Theft

As is seen in the Real Life Bonnie and Clyde story, sometimes your information is taken through outright theft. Sometimes the identity theft happens through an inside job, an employee of a company using their access to secure information. In such instances, it becomes all the more important to monitor your credit report. More information can be found here