(FinalCall.com) – Last year, over seven million people were victims of the silent crime of identity theft. The information explosion, easy credit and the inability of consumers to control who has access to their sensitive financial information has created an open season for identity thieves. Today, identity theft is the fastest growing crime in America.
“In the African American community, we don’t complain, we don’t get a handle on it when it occurs and it ends up ruining people’s credit,” laments Soloman Harge, executive director of Consumer Protection Association in Cleveland, Ohio. “There are some basic steps that people can take to protect their personal information and reduce the risk of some thief stealing their identity.”
Identity theft is the use of a person’s identity to perform fraudulent financial transactions without the victim’s permission or knowledge. Identity thieves have been known to fraudulently obtain credit cards, steal money from existing accounts, open new accounts, apply for loans, rent apartments, obtain jobs and even file for bankruptcy without the victim knowing about it for months or even years.
The typical identity theft begins with the imposter obtaining the victim’s identifying financial information, such as social security number, birth date, credit card or account numbers. The thief obtains this information through a variety of methods, some low tech–such as rummaging through trash, stealing mail, eavesdropping on phone conversations and stealing information from the home or workplace. Some of the more sophisticated methods involve stealing records through the Internet, buying inside information from store or credit card company employees; or stealing credit reports by posing as a landlord, employer or someone else who may have a legitimate need for credit records.
The imposter, then, opens new accounts, ravages existing accounts, makes cash withdrawals or purchases merchandise in the victim’s name. They often provide a different address, claiming to have moved. Once the imposter completes their first transaction, they are well on their way to stealing thousands of dollars and ruining the credit and good name of the unwitting victim.
The Federal Trade Commission estimates that the average number of months between the time the identity theft occurred and was noticed by the victim is 14 months. Additionally, for the typical victim, it takes 600 hours to repair their damaged credit, with an average out-of-pocket cost of $1,000.
While there is no surefire method to guarantee that your identity will never be stolen, there are ways to minimize the risk. The most important concept is to manage your personal information wisely and cautiously. Below are some ways to help protect your identity:
– Review a copy of your credit report from each of the three major credit-reporting agencies at least once a year. You can get a free copy of your credit report annually from each of the three major credit bureaus by contacting www.annualcreditreport.com or (877) 322-8228.
– Do not give out personal identification information to people or companies that you do not know. Even then, understand why it is required and how it will be used. Give out your Social Security number only when absolutely necessary. Your SSN, along with your birth date are keys to obtaining your credit report. Use a shredder to dispose of paperwork that contains personally identifiable information and account numbers, such as credit card receipts, billing statements, cancelled checks, pre-approved credit offers and etc.
– Protect your mail from theft. Deposit outgoing mail in postal mailboxes, promptly remove mail from your mailbox and have your mail held if you are planning to be away from home for a period of time. Minimize the personal identification information and the number of credit cards that you carry with you. Create unique passwords and PINS for your accounts. Do not use your birth date, social security number or other personal matching information.
– At home and work, keep all items with your personal information in a safe place. Use a secure browser when shopping online. When submitting your purchase information, look for the “lock” icon on the browser’s status bar to be sure the information is secure during transmission.
Identity theft is a serious problem and will become even more so in our high-tech world. However, there are some measures that you can take to reduce your risk and the potential impact on your family’s financial plans. Two helpful websites are: www.consumer.gov/idtheft and www.idtheftcenter.org.
(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to [email protected].)