Preventing Identity Theft

The best protection against identity theft, without doubt, is identity theft prevention. A recent article in USA Today shows how identity theft can happen. An identity theft ring hacked into Marshall Department Store’s main computer and stole thousands of credit card numbers. The ring members then traveled throughout Florida using these stolen credit card numbers to charge high-value merchandise at stores like WalMart.

They then sold the merchandise to “fences,” or even more brazenly, returned the merchandise to WalMart stores for a cash refund. A WalMart clerk got suspicious and called store security, which contacted police. The ring members are now all serving long sentences in the slammer.

But the more important point is, if you’ve ever shopped at Marshall’s you could have found yourself with credit card bills for many thousands of dollars of merchandise you never purchased. What a gigantic headache! True, you wouldn’t be legally responsible for those fraudulent purchases. Nevertheless, your credit record would be quite a mess for a long time.

Clearly – notwithstanding some recent legislation – identity theft is the crime that’s probably most likely to happen to you. It’s simply too easy for crooks to get hold of credit card numbers and social security numbers these days. In this report I’ll briefly discuss how identity theft happens, what to do if it happens to you, and also mention a few important self-protection measures.

Identity Theft Defined

Identity theft doesn’t usually mean somebody steals your identity and then goes off to a faraway place and lives his/her life impersonating you and running up bills in your name. It could mean that, please but that is extremely rare. Most commonly, it just means somebody runs up bills using your credit card or credit rating. Sometimes a lot of bills. There have even been cases of identity thieves taking out house mortgages under somebody else’s name, and then flipping (re-selling) the house.

Two Types of Identity Thieves

There are two main types of identity thieves, namely identity theft rings and individual identity thieves.

Identity theft rings resemble little Mafias with a boss and a group of underlings who do the more risky tasks, such as setting up credit accounts and going into retail stores to purchase merchandise using fake credit cards. (Many rings actually manufacture valid-appearing credit cards, or hire specialists to do it for them.)

Typically identity theft rings use hit-and-run tactics, working in a fixed location for a few months then disappearing.

The other type of identity thief is the lone individual who is trying to upgrade his/her standard of living by credit card fraud. Usually, this type of identity thief will not make quite as much of a train-wreck of your credit standing as the identity theft ring. Even so you may find yourself spending many hours trying to fix it.

Needless to say, both types of identity thieves – the rings and the individuals – usually target high-income individuals. Anyone with an expensive car, home, or high-paying job is a more-likely target. Unfortunately, your social security number can be just about as easy to get these days as your phone number. All a crook needs is an account with an information broker online and your name and address. Then, given your social security number and a little additional information like your date of birth (which is also pretty easy to find online), the identity thief can set up all kinds of charge accounts in your name, arranging to have the bills sent to a phony address so that it will take longer for you to catch on to what’s happening.

But not all identity theft stems from online information brokers giving out social security numbers. In fact experts say only a very small fraction of it does. Most often, thieves directly steal credit card numbers, like the ring that I mentioned above which operated in Florida. On a smaller scale, a thief working as a waiter or clerk may steal your credit card number or possibly your whole purse or wallet.

In any case, it can escalate from a major nuisance to a major crisis if the identity thief commits a crime while impersonating you, possibly by means of a fake driver’s license or other forged document. Should he/she be charged and then fail to appear in court, you could find yourself under arrest and charged with the crime or other offense.

First, get as much information as you can from the merchant, such as when the purchase took place, type of credit used (credit line or credit card), account number, monetary amount, where the bills were sent, and if a credit application was filled out (if so, get a copy of it). Explain to the merchant that you’ve been a victim of identity theft – always use that term, “identity theft” – and request that he not report the bill to the credit bureau in your name.

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