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| Identity theft costs a record $56.6 billion |
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| Identity Theft Daily Staff |
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2/24/2009 - Identity theft, the biggest source of U.S. consumer fraud, costs a record $56.6 billion in cash, goods, and services. Two thirds of victims have no out-of-pocket expense (because banks and credit card companies seldom ask victims to cover any charges), for about 3 million victims, the average cost of repairing their credit was nearly $1,200 and for all victims the average time to set the record straight was 40 hours.
Fortunately, ID theft is declining after cases reported to the Federal Trade Commission (FTC) nearly tripled from 2001 through 2004, the number of identity fraud victims in the United States was 8.1 million in 2007, a 3.6 percent decrease from the 8.4 million in 2006 and a 9.0 percent decrease from 2005 according to Javelin Strategy & Research. Awareness by consumers and creditors coupled with technological safeguards has helped curb cases of identity theft.
The most frequent source of information for ID thieves is you according to the Javelin survey, among victims who knew how their numbers were pilfered, 30 percent of frauds began with a lost or stolen wallet, checkbook, or credit card. So don't carry PIN codes for your plastic or your Social Security card. One in seven cases of ID theft traced to a source turns up a family member or other trusted associate the victim. Keep your checkbook, credit cards, and any important papers (such as mortgage, insurance, and investment records) under lock and key. Javelin found, frauds first noticed by victims were uncovered a month sooner than those financial institutions identified. Regularly checking credit card and bank statements, it's good to scan your credit history for inquiries on existing accounts and applications for new loans. You can get one free credit history annually from each of the three major bureaus (Experian, Equifax, and TransUnion) at www.annualcreditreport.com. By rotating your requests, you can receive a report every four months.
Households earning less than $50,000 are three times more likely to be victimized by fraud according to Javelin Strategy & Research. According to Frost & Sullivan, the amount of credit card fraud is projected to reach $15.5 billion, up from $7.5 billion in 2007. Deloitte says that 51 percent of external attacks on financial institutions were phishing followed by spyware at 48 percent. Recent laws in eight states let you freeze access to your credit file to keep anyone, legit or not from reviewing your standing or opening loans in your name. Freezes that used to be applied by credit bureaus only after ID thieves struck are available free by law to any citizen in Colorado and New Jersey. Consumers in California, Connecticut, Louisiana, Maine, Nevada, and North Carolina can stop credit tampering cold for a small fee, generally up to $10. And for another $5 or $10 the same eight states allow a credit thaw when you need a new loan. Freezes are also available by law to ID-theft victims in Illinois, Texas, Vermont, and Washington.
You should shred anything bearing sensitive information into a crosscut (or "confetti") shredder. This makes it virtually impossible for garbage divers to read your data or use credit card "convenience checks" and new offers. To make sure mail isn't diverted before it reaches the shredder, get your letters delivered to a secure location. A street-side mailbox is easily accessible by thieves. Police say these boxes are favored targets of ID thieves looking for checks to steal. A mail slot into the house is better and if this is not possible, consider renting a box at the local post office.
Spend less time sorting and shredding by opting out of solicitations for new credit cards, mortgages, or other loans. To eliminate future trash at its source, call the credit bureaus' dedicated line at 888.567.8688 from your home telephone or register at www.optoutprescreen.com. If you call, an automated voice-response system will request your name, telephone number, and Social Security number; don't worry, the credit bureau has it already as part of your credit history. You can opt out for five years or forever. (And if you haven't done so already, by all means register your phone numbers with the National Do Not Call Registry maintained by the FTC at 888.382.1222 or www.donotcall.gov. Unless they're from charities, political groups, surveys, or companies with which you have ties, telemarketers are barred from calling registered numbers. So you'll know any call you do get is suspect.)
All it takes to empty your bank account is a signed check and a pan of acetone, the active ingredient in nail polish remover. The identity thief crook tapes over your signature front and back, and then soaks the check in acetone to wash away everything but the printer's ink and your signature. He then dries the check and carefully peels off the tape resulting in a blank check signed by you. In addition, thanks to "bounce protection" from banks, the scamster can even overdraw your account. You should use a uni-ball gel pen, the only one that resists washing. You can also use tamperproof checks. And keep phone numbers off your printed checks can also say less. them altogether. Order checks from your bank, not from independent vendors, and seek out security features such as paper that acetone stains.
Every home computer should have security virus, spyware and adware software that is updated regularly. You should be aware and resist the bait from con artists "phishing" for your private information via email. The unseen danger comes from "spyware," which sneaks onto your computer to track your actions online. One kind, known as adware, merely gauges your interests to help websites predict what advertising might grab your attention. A more sinister sort of spyware monitors your every keystroke and reports back to a waiting attacker. Spyware infiltrates your computer by hiding inside a downloaded program or by an email you open or Web link you click on. I recommend Ad-Aware, itself a free download, but one you can trust.
You can also get a second (and sometimes third) free email account from MSN's Hotmail, Yahoo!'s Mail, or Google's Gmail so you can segregate your online shopping from banking and private correspondence and don't use your name or a familiar word as part of any address. Scramble some letters and numbers instead. These measures will make it a lot harder for phishers to find you by chance and lure you to scam websites. To reduce the hazard posed by a pirated cash card, call your bank and request a per-day limit on ATM withdrawals from your accounts.
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