Identity Theft

Identity theft occurs when someone steals your personal information to take over your credit accounts, open new ones, take out a loan, rent an apartment, access bank accounts, or commit many other crimes using your identity.

When it strikes, the effects can be devastating. What's more, because it frequently involves no physical theft, identity theft may not be noticed by its victims until significant damage has been done -- often, several months and thousands of dollars later.

How they steal your Info

· Going through your mail or trash, looking for bank and credit card statements, pre-approved credit offers, and tax information.

· Stealing personal information from your wallet or purse such as identification, credit, or bank cards.

· Completing change-of-address forms to redirect your mail.

· Obtaining your credit report by posing as a landlord or someone else who has a lawful right to the information.

· Acquiring personal information you share on unsecured sites on the Internet.

· Buying personal information about you from an inside source -- for example, a store employee that gets your information from a credit application or by "skimming" your credit card information when you make a purchase.

· Getting your personnel records at work.

How they use your Info

• Opening new credit card accounts using your name, date of birth, and Social Security number. When they use the credit cards and don't pay the bills, the delinquency is reported on your credit report.
• Establishing phone or cellular service in your name.
• Opening a bank account in your name and writing bad checks on the account.
• Counterfeiting checks or debit cards, and draining your bank account.
• Buying cars by taking out auto loans in your name.
• Calling your credit card issuer and, pretending to be you, changing the address on the account. Bills get sent to the new address, so you don't realize there's a problem until you check your credit report.
• Filing for bankruptcy using your name to avoid paying debts they've incurred under your name.
• Opening new credit card accounts using your name, date of birth, and Social Security number. When they use the credit cards and don't pay the bills, the delinquency is reported on your credit report.
• Establishing phone or cellular service in your name.
• Opening a bank account in your name and writing bad checks on the account.
• Counterfeiting checks or debit cards, and draining your bank account.
• Buying cars by taking out auto loans in your name.
• Calling your credit card issuer and, pretending to be you, changing the address on the account. Bills get sent to the new address, so you don't realize there's a problem until you check your credit report.
• Filing for bankruptcy using your name to avoid paying debts they've incurred under your name.

Zero responsibility doesn't mean zero problems. Because credit card companies must limit consumer responsibility to $50 in most cases of fraud, and because many new cards include "zero responsibility" protection, some people think there's no reason to worry about credit fraud. But in its most advanced form -- identity theft -- credit fraud can cause wide-ranging long-term problems. Identity thieves can use your personal information to take over your credit accounts and open new ones. They may even use your good credit to get a job, take out a car loan, or rent an apartment.

Check your credit report regularly. Checking your credit report can help you catch mistakes and fraud before they wreak havoc on your personal finances. Make sure your report is accurate and includes only those activities you've authorized. It's also a good idea to review your credit report from each of the three major credit reporting agencies every year -- it's possible that information is reported to one but not the others.

Be careful about giving out personal information. Whether on the phone, by mail, or on the Internet, never give anyone your card number, Social Security number, or other personal information for a purpose you don't understand. Ask to use other types of identifiers when possible, and don't carry your SSN card. Be sure to keep it in a secure place.

Protect your mail. To stop a thief from obtaining personal information about you by going through your through trash or recycling bin, tear or shred your charge receipts, credit applications, insurance forms, bank statements, expired charge cards, and preapproved credit offers. Deposit outgoing mail in post office collection boxes or at your local post office. Promptly remove mail from your mailbox after it's delivered. If you plan to go away, call the U.S. Postal Service at 800-275-8777 and request a vacation hold.

Guard your credit cards. Minimize the information and the number of cards you carry in your wallet. If you lose a card, contact the fraud division of the credit card company. If you apply for a new credit card and it doesn't arrive in a reasonable period, contact the issuer. Watch cashiers when you give them your card for a purchase. Also, when you receive a new card, sign it in permanent ink and activate it immediately.

Pay attention to billing cycles. Contact creditors immediately if your bills arrive late. A missing bill could mean an identity thief has taken over your credit card account and changed your billing address.

Safeguard personal information in your home. Especially if you are having service work done in your home, employ outside help, or have a roommate.

Find out who has access to your information at work. Be sure to verify that records are kept in a secure location, and are accessible only to employees who have a legitimate reason to access it.

Be smart about passwords and PINs. Memorize your passwords and personal identification numbers instead of carrying them with you. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers.