What Is Identity Theft?

Short answer: Someone uses your identity to spend money and perform unlawful acts under your name and credit history.

Legal answer: Identity Theft occurs when someone 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 Federal law, or that constitutes a felony under any applicable State or local law.

In October 1998, Congress passed the Identity Theft and Assumption Deterrence Act of 1998 to address the problem of identity theft. Specifically, the Act amended 18 U.S.C. § 1028 to make Identity Theft a federal crime. It's a felony with a 15-year maximum sentence. In July 2004, President Bush signed the Identity Theft Penalty Enhancement Act that guarantees a minimum of two years in prison for those who use identity theft to commit a crime, including terrorism.

The Federal Trade Commission (FTC) started collecting Identity Theft statistics in November, 1999. The number of complaints only represent an indication of the identity theft problem since it's not possible to know the exact number of identity thefts each year.

In 2007, credit card fraud (23%) was the most common form of reported identity theft followed by phone or utilities fraud (18%), employment fraud (14%) and bank fraud (13%),. Other significant categories of identity theft reported by victims were government documents/benefits fraud (11%) and loan fraud (5%).

The FTC sponsored a study in 2003 that revealed these troubling annual statistics.

Identity thieves have a buy now pay never shopping binge at your expense. California State Senator Debra Bowen notes that "Identity theft is one of the easiest, most risk-free crimes thieves can commit. They don't need a gun, a knife, or a getaway car. All they need is someone's Social Security number and a pen." ID thieves can use your name to :

Most victims do not know how their identity was stolen. Today's society of easy and legal access to information makes it easier than you may think. Data gathered through the Internet and electronic databases are potential sources for identity thieves, but low-tech means of stealing your information are more prevalent.

An individual or business that fails to properly dispose of personal identification information, by shredding or mutilating, could find themselves susceptible to a "dumpster diver"--an individual who retrieves discarded material looking for anything of value.

Dumpster divers obtain account numbers, social security numbers, addresses, and dates of birth from financial, medical, and personal records--all of which they can use to assume an identity.The tax return season is like Christmas for identity thieves since so many people clean out their files.

You may follow a strict discipline of shredding sensitive documents, but what about the businesses that maintain your personal information. How do they dispose of records with your information?

Dumpster diving is a popular activity for thieves. An Internet search reveals several dumpster diver clubs you can join. You know you have reached a low point in life when you are a member of a dumpster diver club!

Thieves check mailboxes looking for all kinds of interesting treasures. How many pre-approved credit card offers did you receive in the mail last week? Did you receive any statements containing your social security number, account numbers, etc.? Did you mail any bills with sensitive information?

Did you help the identity thief by raising the red flag on your mailbox to announce that your information is ready to be taken?

Your identity thief may take an easier route by simply submitting a change of address to temporarily divert your mail to a mailbox of a vacant house that he has access to. He only needs a week in most cases to receive a few pre-approved credit card offers. The post office will mail a change of address acknowledgement to both the new and old addresses. Contact your post office immediately if you receive this notice unexpectedly. You can report mail theft and false change of address online at the U.S. Postal Inspection Service web site.

Unethical businesses sell valid-looking drivers licenses and social security cards by publishing a ridiculous disclaimer that states the cards are novelty ID cards for novelty purposes only. One web site charges $79 for a drivers license and $99 for a Social Security card -- steep prices for novelty items.

Your personal and sensitive information is maintained in records in several places. Your employer, dentist, doctor, county clerk and creditors just to name a few have information that is very valuable to an identity thief. A thief may be able to convince an employee to copy a few records for a few hundred dollars. Who's going to know?

There are web sites that sell your Social Security number. You can search for someone's birth date and even do a public records search. Visit Google and search for your area code and phone number. You'll probably get a link to your name, address, zip code and a map to your house. Google provides a web site to remove your phone number from their search engine.

Some thieves are very skilled at calling you or businesses to collect information about you. They call under the pretext of being someone else or you. They're looking for account numbers, your mother's maiden name, birth date, etc. Each call yields a little more information. Finally, they have enough info to convincingly assume your identity.

Please remember that financial institutions will never solicit sensitive information through email or the telephone.

Thieves obtain credit reports by abusing their employer's authorized access to credit reports or by posing as a landlord, employer or someone else who may have a legitimate need for and a legal right to the information. Your credit report provides all the information required to steal your identity - social security number, birthday, phone number, account listing, employer, addresses, etc.

The Internet is full of scams and fraudulent efforts. Visit Fraud Watch International to view a list of currently used scams. Here are a few of the popular scams.

Nigerian E-mail

This scam is sent out to victims via letter, e-mail, and fax. It consists of a message stating the sender has a large sum of money and needs help transferring it out of Nigeria or some other place. As a reward for your help, the sender promises to pay you a few million dollars. Of course you only have to provide your bank account number, social security number, etc.

Online Auction Fraud

The fraud involves a fake ad on eBay to let someone "win" the bid and send in their money, but never send out the merchandise.

Phishing

Phishing ( pronounced "fishing") is a high-tech scam that uses spam email or pop-up messages to deceive you into disclosing your credit card numbers, bank account information, Social Security number, passwords, or other sensitive information.

Phishers send an email or pop-up message that claims to be from a business or organization that you deal with - for example, your Internet service provider (ISP), bank, online payment service, or even a government agency. The message usually says that you need to update or validate your account information. It might threaten some dire consequence if you don't respond. The message directs you to a Web site that looks just like a legitimate organization's site, but it isn't.

What is the purpose of the bogus site? To trick you into divulging your personal information so the operators can steal your identity. By hijacking the trusted brands of well-known banks, online retailers and credit card companies, phishers are able to convince up to 5% of recipients to respond to them. Read about recent phishing attacks at www.antiphishing.org/

Report phishing attacks to the company that is being hijacked and to the Anti-Phishing Working Group

Please remember that the financial institutions will never solicit sensitive information through email or the telephone.

You've Won A Prize

The thieves call you with the exciting news of a prize you just won. All they need is a credit card number, social security number, etc, to validate the award.

I Need Your Credit Card Security Code

This scam usually happens over the phone. Their goal is to get the security code on your credit card. Visa and Master Card use the last three numbers on the back of the card. American Express uses four digits on the face of card located above the credit card number

The fraudster has already obtained your credit card number and address through another means. Now he just needs to convince you to provide the security code.

Normally, the fraudster claims to work at your credit card company and calls you about an automatic alert generated by the system on a suspicious purchase on your card. The fake purchase is usually an anti-telemarketing device just under $500. Of course you inform them of the fraudulent charge and you want it removed immediately. The fraudster is very willing to take care of the problem for you. He just needs... you guessed it... the security code on your card as proof that you have the card in your possession.