What is Identity Theft
Identity theft occurs when a criminal takes your personal information (such as your social security number, address, birth date, bank account number, credit card number, etc.) and uses it to steal money or obtain services under your name. With every advance in technology, it seems there are those who will quickly find a way to put it to use for their own unlawful gain. For example, some thieves access your information by hacking into personal or business computer systems or stealing laptops that contain personal data. But even more often, they use good old-fashioned techniques like stealing your purse or wallet. Copies of bank or credit card statements, bills or other personal papers can be stolen out of your home, your trash, the trash of businesses you’ve patronized, or your incoming or outgoing mail. Some thieves simply talk people into giving them information by posing as someone who would have a right to know it or claiming they need you to verify your account information.
Once thieves have this information, they can wreak havoc with your good financial name. They can run up charges on your credit card, changing the billing address so it will be awhile before you realize what has happened. They can open new accounts in your name, including bank, phone and utility accounts; write counterfeit checks; drain your bank account; pay taxes or file for bankruptcy in your name; or get official ID issued in your name. It has even been known to happen that an identity thief will give the victim’s name if they get arrested, and when they don’t show up for court, the police come after you! In addition to the expense of resolving the problem, identity theft victims can also be harassed by collections agents, have their utilities cut off, or have trouble obtaining loans, credit or new bank accounts. They may also be unable to access their existing bank accounts or use their existing credit cards. The bottom line is identity theft can have a serious negative impact on the victim so you need to be informed.
How bad is the problem?
Identity theft remains the top category of fraud affecting consumers. In the Federal Trade Commission’s “Consumer Sentinel Network Complaint Data Book” report for 2012, it shows the number of identity thefts remained high last year from 278,385 in 2009 to 279,156 in 2011. Identity theft represents 14% of all consumer fraud complaints, followed by third-party and creditor debt collection (10%), banks and lenders (7%), and imposter scams (6%). And while contemplating this enormous number, keep in mind that it doesn’t include those victims who chose not to file a claim, or filed under other categories, such as theft or mail or internet fraud.
With numbers on the rise again, it is even more important that you refresh your memory on the signs of identity theft and the simple precautions you can take to lessen your chance of becoming one of the statistics! Still don’t think it’s all that important? Read on.
The average cost to the consumer stayed in the thousands from $2,297 in 2011 to $2,294 in 2013. Luckily, a full 44% paid nothing at all, because in most cases, victims are not legally responsible for unauthorized charges or accounts. Looking only at victims who did have to pay out-of-pocket expenses, the median amount paid was $535.
The list below is a nationwide ranking of states by number of identity theft complaints for January 1 – December 31, 2013.
Age-wise, people under 50 bear the brunt of identity theft fraud. The graph below shows that nationwide, people are less likely to be victimized the older they get. Of all 2013 victims, 63% of victims were under 50, 17% were in their 50s, 12% were in their 60s, and 8% were over 70.
Government documents or benefits fraud was the most common form of reported identity theft (34%). Credit card fraud was second (17%) followed by phone or utilities (14%) and bank fraud (8%). Other significant types of identity theft reported by victims were employment related (6%) and loan fraud (4%).
It’s no wonder so many people across the nation are becoming slightly paranoid about their personal information and who has access to it. Almost everyone has heard at least one person’s horror story of the long and difficult path to clearing their name (and credit rating!) after identity theft has occurred, and after hearing it, my guess is that everyone shared the same thought—“I hope that never happens to me!”
Identity Theft by way of Stimulus Scams
Stimulus scams are a new way identity thieves are acquiring your personal information and stealing your money. The Federal Trade Commission sent out an FTC Consumer Alert informing us that the promise of stimulus money in return for a fee or financial information is always a scam. These scams occur primarily via email, an online ad or website saying you are eligible to get an economic stimulus payment. The FTC urges you to ignore it, delete it and throw it out! They strongly suggest you do not even click onto any links or open any emails or attachments. This may cause the installation of spyware, a harmful program which could send your personal information to an identity thief. The IRS does not send emails like this asking for personal information and these emails or websites should not be trusted, regardless of how legitimate it sounds.