Identity Theft: Crime of the Century?It's Time for Consumer's to Strike Back at Top Fraud Threat Identity theft is a growing epidemic in the U.S. and worldwide. Chances are, if you haven't been directly impacted by it, you know someone that has.
In fact, identity theft led the Federal Trade Commission's (FTC) list of consumer fraud complaints for 2007 - and it's been at the top of the list for the past seven years. Of the 813,899 total complaints in 2007, 32 percent were related to identity theft. That's 258,427 complaints. http://www.ftc.gov/opa/2008/02/fraud.shtm
Identity theft broadly refers to the fraudulent use of someone else's personal information. Criminals actively seek out sensitive or identifying data - like passwords and social security numbers - from unsuspecting victims. Sometimes they do it low-tech style by dumpster diving, raiding post boxes or posing as "legitimate" telemarketers. Today, though, there are many high-tech techniques wrecking much havoc. Fraudsters are using malware, hijacking electronic transmissions, and perpetrating email scams to get what they need.
Once they've got their victim's data, these criminals sell it to the highest bidder or use it themselves for ill-gotten gains. Meaning they'll apply for a new mortgage under the victim's name or use their credit card on a shopping spree.
And when the deed is done, their victims are left holding the bag. Sure, it can be a financial drain, in that credit card and utility bills can really pile up. But, on the other extreme, victims can spend years trying to clear their names and credit scores. "I was an Identity Theft Victim"
Identity Theft in 2008
Identity theft is definitely top of mind going into 2008. Consumers are as worried about their privacy as they were in 2007, perhaps more. But their concern goes beyond making sure their personal data is safe. Consumers are worried about credit card fraud. They think about it when they hand over their card to a local merchant and they think about it when they hit the "send" key for online purchases.
"There's a trust issue, too," says Betsy Broder, assistant director in the Federal Trade Commission's Division of Privacy and Identity Protection. "Are they [banks] treating data with a much care as they do my money?"
Those concerns are to be expected. But what's really troubling folks is what they don't know. And part of that has to do with technology, says Broder. They want to know how hackers think, what they do to steal information and how technology leaves them vulnerable. And technology is just plain hard to keep up with.
"The problem is bigger than just phishing, it's really technological stalking," Broder explains. "Criminals and fraudsters have unlimited imaginations for ways to get personal information." For example, this concept of phishing started out as amateur hour. Now, she says, the FTC has received complaints about phishing recovery scams where consumers receive emails from a "trusted" source informing them that the company was victimized by a phishing attack and their account must be closed. They're asking for account information to make that happen. It's all a scam and an ingenious new way to stalk victims.
Taking a Bite Out of Crime
So what's being done about all this? Obviously, it's not up to consumers to do all the heavy lifting when it comes to protecting their identities. We all do business with many providers - financial and otherwise - who have become stewards of our identities and personal information.
"Banks and credit unions, by virtue of their status, have a lot of obligations," she adds. They need to make sure consumers understand the risks and help them guard against potential identity theft. In fact, many banks and credit unions are implementing awareness tactics to help educate consumers on identity protection measures. And, Broder encourages financial institutions that don't have the internal manpower to do it themselves to provide their customers with links to the official FTC website, which hosts important resources regarding identity theft, internet safety and fraud.
The Federal Government is doing its part, too. The President's Identity Theft Task Force, co-chaired by the Attorney General and the FTC Chairman, was established by Executive Order of the President. It is comprised of 17 federal agencies and departments working toward a common goal of minimizing identity theft crimes. Specific recommendations from the task force include:
- Preventing data theft through better security and awareness;
- Making it more difficult to use stolen identity information;
- Helping victims to recover from the harms of identity theft;
- Using stronger punishment to deter theft. http://www.idtheft.gov
Consumer's Can Take a Stand, Too
Of course, there's a lot consumers can do to help minimize their own risk of falling victim to identity theft. The FTC's Broder offers consumers five actionable "must-do" steps going into 2008.
1. Limit access to personal information. Unnecessary items should be removed from wallets and documents with personal information should be shredded.
2. Think twice before revealing too much information. If a social security number isn't absolutely necessary, it shouldn't be relinquished at all.
3. Be very wary of any solicitations asking for personal data. Whether contacted via email, phone or otherwise, when in doubt, use a trusted number to contact that company directly.
4. Scrutinize bank and credit card statements. Catch any unauthorized activity before it goes too far and act swiftly to get discrepancies resolved.
5. Check credit reports regularly. It's free, so put it should be on everyone's "to do list" multiple times a year.
"Information is the new currency," says Broder. "As consumers, we all can take easy steps to protect our good names." So these common-sense tactics should be no-brainers. But in the end, it'll be a group effort - between consumers, the entities they do business with and the Federal Government - that puts a halt to such thievery.