NEW YORK – Dear Friends,
Identity theft is numero uno on the list of frauds reported to the Federal Trade Commission. It’s one of the "Dirty Dozen" scams targeted by the IRS this year. California tops the list of cases, with nearly 44,000 reported in 2004. Second is Texas at 26,000. New York State and Florida came in third and fourth, respectively.
But those numbers are just the tip of the iceberg. Most people don’t report identify theft, so the true extent of this crime is much larger. Several surveys put the number of people affected at 10 million last year alone.
Fact is, you’re more likely to be a victim if you live in Arizona, which has the highest rate of ID theft based on population. If you need another reason to watch your wallet when you’re in Vegas, try this: when it comes to identity theft, Nevada has the second-highest incidence rate.
The top three metropolitan areas for identity theft are all located in the western part of the country:
1. Phoenix-Mesa-Scottsdale, Arizona
2. Riverside-San Bernardino-Ontario, California
3. Las Vegas-Paradise, Nevada
This is a crime that (so far) targets young victims: about one out of three is 18-29 years old. Overall, 75 percent of identity fraud victims are 18 to 49 years old. It’s not nearly as common among people age 50 or higher. Maybe older individuals are more careful about guarding their personal information. Maybe they have fewer credit cards. Maybe they’ll be targeted in the next wave.
One thing’s for sure, identity theft is not going to go away. Why? Because unless you intend to keep all your assets in cash, never hold a job, never get sick, never buy a home with a mortgage, never drive a car, in short, unless you opt out of 21st century life and live in a cave, your personal data is spread out in more places than you can imagine: the doctor’s office, your bank, the dealer you bought your first car from, the catalog company you ordered a shirt from last week, every company you’ve ever worked for, the drugstore where your prescriptions are filled, your college, virtually every government agency you have ever come in contact with — and probably some you haven’t.
Collecting this data started the minute your proud parents got you your own Social Security number so they could claim you as a deduction on their tax return. In other words, the genie’s out of the bottle.
Just ask 1.2 million federal employees — including members of Congress — who recently received a letter from Bank of America telling them that the government-issued credit card in their name may have been compromised. Seems the back-up data tapes containing all kinds of sensitive information on the account holders were, uh, misplaced while they were being transported to another location. As of this writing, a Bank of America spokesperson confirms they are still missing. However, she says so far there has been "no unusual activity" detected.
You know, when you think about the thousands of people who can access this information — from the masseuse at the health club where you charged that Swedish massage, to the receptionist at the dentist’s office where you filled out the "new patient" form- it’s actually remarkable that there aren’t more cases of identity theft!
Most of the time, we’re so used to being asked for our personal information, we don’t think twice about it. But we should. Steve Weisman, author of "50 Ways to Protect Your Identity and Your Credit," says, "Even if this information is limited to legitimate companies, they can have rogue employees who abuse the information."
Take the car dealer. It’s got a perfectly understandable reason for ordering a credit report on you before making a loan. The question is, how secure is this document once it gets to the dealership? According to Weisman, there are cases where a rogue employee or even the night cleaning crew stole the information because it was carelessly left on someone’s desk. Moreover, as Weisman points out, even if a company does a thorough background check on all it’s employees, "how many check a temp" to see if he/she is a potential security risk?
ID thieves have no scruples. They’ll rummage through your trash- both at home and at the office. Many flourish in the wake of a disaster. They have posed as volunteers collecting donations on behalf of charities to aid tsunami victims. "All I need is your credit card information right here…"
After last year’s hurricanes devastated parts of Florida, they turned up pretending to be agents for insurance companies and FEMA, the Federal Emergency Management Agency. During election years, they’ve been known to go door-to-door looking for donations and information ("So we can remind you to get to the polls.") claiming to represent a political party.
What surprises me is the fact that most victims of identity theft don’t file a police report. Perhaps because most credit card companies either limit the amount of fraudulent purchases you’re liable for or else let you off the hook entirely, the majority of victims simply have their account canceled and get a new card issued.
But this can be a huge mistake because it ignores the possibility that the thief will do more than just go on a spending spree using your plastic. In almost one out of five reported cases of identity fraud the victim’s personal information was used to open at least one new account such as another credit card, a loan, or cell phone service. After the thief runs up a big bill, he/she walks away from it, leaving "Deadbeat" splattered all over your credit record. In 4 percent of the cases, the thief committed a crime using fraudulent identification!
Why should you go the extra step and file a police report if you think you’re the victim of ID fraud? Because it’s illegal! According to Betsy Broder, the attorney who heads up the FTC’s identity theft prevention program, "The thief may have bought a stereo in your name and a wide screen TV in my name. If the police can aggregate the data they might be able to see a pattern emerge."
The FTC’s computerized "Sentinel" database contains information on more than 2 million cases of consumer fraud. Last year, 40 percent of the complaints involved ID theft. Law enforcement agencies around the country and in 19 foreign nations have access to it. It’s suspected the terrorists who committed the atrocities of 9/11 may have partly funded their operation by illegally obtaining cash and other assets using the personal information stolen from others.
Even if you don’t buy the "good citizen" motive for filing a complaint, Broder points out that it’s in your own best interest to have the ID theft on record. "If there are further misuses of your accounts, you want to be able to show that your information was actually stolen."
If you think you have been victimized the FTC recommends the following actions:
1. Have a "Fraud Alert" places on your credit file. You can do this by contacting any one of the three major credit reporting agencies.* "When a new creditor sees this they have to verify that it is really you asking for the account and not someone posing as you," says Broder.
2. Report the problem to your credit card issuers and any other companies where you might have accounts that have been compromised. Follow up in writing using the "ID Theft Affidavit," a standard form accepted by all creditors which you can download from the FTC’s website: http://www.consumer.gov/idtheft/
3. File a police report and be sure to [get a copy of it.] According to Broder, "It’s an essential document you’ll need to help repair the damage. Armed with a police report, you can get the credit reporting agencies to erase any fraudulent accounts from your credit history."
4. File a complaint with the FTC. "This is where consumers do us a favor," says Broder. "If you are a victim, the thief could be victimizing others." Get your information into the Sentinel database.
By the way, the sooner you notice something fishy happening with your accounts, and the faster you take action to stop it, the better. If the victim doesn’t discover the fraud for months, that’s when ID theft turns into a nightmare that can haunt their financial record for years and cost thousands of dollars to correct.
At this point you might be wondering if you can reduce your risk of having your identity stolen if you avoid ecommerce? I put the question to Keith Anderson, an FTC economist, who didn’t hesitate to say he pays most of his bills online. "The safety issue isn’t one I’m worried about. It’s just more convenient." Agreed.
However, don’t be lulled into complacency by the results of a recent survey conducted on behalf of the financial services industry. It concluded that identity theft is more prevalent off-line. Big surprise. Only a small fraction of transactions are conducted via the Internet, i.e. most people still pay their bills using a check and the U.S. Mail. So you’d expect paper-based ID fraud to be more common! To be on the safe side, make sure the website you’re using contains an icon that resembles a "padlock," indicating the information is encrypted.
In the wake of the CheckPoint debacle, Sen. Dianne Feinstein and others in Congress are calling for national legislation to protect consumer data instead of the hodge-podge of generally weak state laws we currently have. "Unfortunately," says Weisman, "in the past credit reporting agencies, large banks and companies that use this data have resisted regulation or have watered it down." Let your representatives in Washington know Americans deserve strong safeguards for their personal information no matter where they live.
In the meantime, if you’d like to receive a free copy of "50 Ways to Protect Your Identity and Your Credit," send me a short – I mean it! – e-mail explaining why.
What’s in your wallet? (Sorry, I couldn’t resist!)
Gail
*National credit reporting agencies:
Experian: 888-397-3742
TransUnion: 800-680-7289
Equifax: 800-525-6285
Dear Friends,
Identity theft is [numero uno] on the list of frauds reported to the Federal Trade Commission. It's one of the "Dirty Dozen" scams targeted by the IRS this year. California tops the list of cases, with nearly 44,000 reported in 2004. Second is Texas at 26,000. New York State and Florida came in third and fourth, respectively.
But those numbers are just the tip of the iceberg. Most people don't report identify theft, so the true extent of this crime is much larger. Several surveys put the number of people affected at 10 million last year alone.
Fact is, you're more likely to be a victim if you live in Arizona, which has the highest [rate] of ID theft based on population. If you need another reason to watch your wallet when you're in Vegas, try this: when it comes to identity theft, Nevada has the second-highest incidence rate.
The top three metropolitan areas for identity theft are all located in the western part of the country:
1. Phoenix-Mesa-Scottsdale, Arizona
2. Riverside-San Bernardino-Ontario, California
3. Las Vegas-Paradise, Nevada
This is a crime that (so far) targets young victims: about one out of three is 18-29 years old. Overall, 75 percent of identity fraud victims are 18 to 49 years old. It's not nearly as common among people age 50 or higher. Maybe older individuals are more careful about guarding their personal information. Maybe they have fewer credit cards. Maybe they'll be targeted in the next wave.
One thing's for sure, identity theft is not going to go away. Why? Because unless you intend to keep all your assets in cash, never hold a job, never get sick, never buy a home with a mortgage, never drive a car, in short, unless you opt out of 21st century life and live in a cave, your personal data is spread out in more places than you can imagine: the doctor's office, your bank, the dealer you bought your first car from, the catalog company you ordered a shirt from last week, every company you've ever worked for, the drugstore where your prescriptions are filled, your college, virtually every government agency you have ever come in contact with — and probably some you haven't.
Collecting this data started the minute your proud parents got you your own Social Security number so they could claim you as a deduction on their tax return. In other words, the genie's out of the bottle.
Just ask 1.2 million federal employees — including members of Congress — who recently received a letter from Bank of America telling them that the government-issued credit card in their name may have been compromised. Seems the back-up data tapes containing all kinds of sensitive information on the account holders were, uh, misplaced while they were being transported to another location. As of this writing, a Bank of America spokesperson confirms they are still missing. However, she says so far there has been "no unusual activity" detected.
You know, when you think about the thousands of people who can access this information — from the masseuse at the health club where you charged that Swedish massage, to the receptionist at the dentist's office where you filled out the "new patient" form- it's actually remarkable that there aren't [more] cases of identity theft!
Most of the time, we're so used to being asked for our personal information, we don't think twice about it. But we [should]. Steve Weisman, author of "50 Ways to Protect Your Identity and Your Credit," says, "Even if this information is limited to legitimate companies, they can have rogue employees who abuse the information."
Take the car dealer. It's got a perfectly understandable reason for ordering a credit report on you before making a loan. The question is, how secure is this document once it gets to the dealership? According to Weisman, there are cases where a rogue employee or even the night cleaning crew stole the information because it was carelessly left on someone's desk. Moreover, as Weisman points out, even if a company does a thorough background check on all it's employees, "how many check a [temp]" to see if he/she is a potential security risk?
ID thieves have no scruples. They'll rummage through your trash- both at home and at the office. Many flourish in the wake of a disaster. They have posed as volunteers collecting donations on behalf of charities to aid tsunami victims. "All I need is your credit card information right here…"
After last year's hurricanes devastated parts of Florida, they turned up pretending to be agents for insurance companies and FEMA, the Federal Emergency Management Agency. During election years, they've been known to go door-to-door looking for donations and information ("So we can remind you to get to the polls.") claiming to represent a political party.
What surprises me is the fact that most victims of identity theft don't file a police report. Perhaps because most credit card companies either limit the amount of fraudulent purchases you're liable for or else let you off the hook entirely, the majority of victims simply have their account canceled and get a new card issued.
But this can be a huge mistake because it ignores the possibility that the thief will do more than just go on a spending spree using your plastic. In almost one out of five reported cases of identity fraud the victim's personal information was used to open at least one new account such as another credit card, a loan, or cell phone service. After the thief runs up a big bill, he/she walks away from it, leaving "Deadbeat" splattered all over your credit record. In 4 percent of the cases, the thief [committed a crime] using fraudulent identification!
Why should you go the extra step and file a police report if you think you're the victim of ID fraud? Because it's illegal! According to Betsy Broder, the attorney who heads up the FTC's identity theft prevention program, "The thief may have bought a stereo in your name and a wide screen TV in my name. If the police can aggregate the data they might be able to see a pattern emerge."
The FTC's computerized "Sentinel" database contains information on more than 2 million cases of consumer fraud. Last year, 40 percent of the complaints involved ID theft. Law enforcement agencies around the country and in 19 foreign nations have access to it. It's suspected the terrorists who committed the atrocities of 9/11 may have partly funded their operation by illegally obtaining cash and other assets using the personal information stolen from others.
Even if you don't buy the "good citizen" motive for filing a complaint, Broder points out that it's in your own best interest to have the ID theft on record. "If there are further misuses of your accounts, you want to be able to show that your information was actually stolen."
If you think you have been victimized the FTC recommends the following actions:
1. Have a "Fraud Alert" places on your credit file. You can do this by contacting any one of the three major credit reporting agencies.* "When a new creditor sees this they have to verify that it is really you asking for the account and not someone posing as you," says Broder.
2. Report the problem to your credit card issuers and any other companies where you might have accounts that have been compromised. Follow up in writing using the "ID Theft Affidavit," a standard form accepted by all creditors which you can download from the FTC's website: http://www.consumer.gov/idtheft/
3. File a police report and be sure to [get a copy of it.] According to Broder, "It's an essential document you'll need to help repair the damage. Armed with a police report, you can get the credit reporting agencies to erase any fraudulent accounts from your credit history."
4. File a complaint with the FTC. "This is where consumers do us a favor," says Broder. "If you are a victim, the thief could be victimizing others." Get your information into the Sentinel database.
By the way, the sooner you notice something fishy happening with your accounts, and the faster you take action to stop it, the better. If the victim doesn't discover the fraud for months, that's when ID theft turns into a nightmare that can haunt their financial record for years and cost thousands of dollars to correct.
At this point you might be wondering if you can reduce your risk of having your identity stolen if you avoid ecommerce? I put the question to Keith Anderson, an FTC economist, who didn't hesitate to say he pays most of his bills online. "The safety issue isn't one I'm worried about. It's just more convenient." Agreed.
However, don't be lulled into complacency by the results of a recent survey conducted on behalf of the financial services industry. It concluded that identity theft is more prevalent off-line. Big surprise. Only a small fraction of transactions are conducted via the Internet, i.e. most people still pay their bills using a check and the U.S. Mail. So you'd expect paper-based ID fraud to be more common! To be on the safe side, make sure the website you're using contains an icon that resembles a "padlock," indicating the information is encrypted.
In the wake of the CheckPoint debacle, Sen. Dianne Feinstein and others in Congress are calling for national legislation to protect consumer data instead of the hodge-podge of generally weak state laws we currently have. "Unfortunately," says Weisman, "in the past credit reporting agencies, large banks and companies that use this data have resisted regulation or have watered it down." Let your representatives in Washington know Americans deserve strong safeguards for their personal information no matter where they live.
In the meantime, if you'd like to receive a free copy of "50 Ways to Protect Your Identity and Your Credit," send me a [short] – I mean it! – e-mail explaining why.
What's in your wallet? (Sorry, I couldn't resist!)
Gail
*National credit reporting agencies:
Experian: 888-397-3742
TransUnion: 800-680-7289
Equifax: 800-525-6285
If you have a question for Gail Buckner and the Your $ Matters column, send them to moneymatters@foxnews.com , along with your name and phone number.
Gail Buckner and Foxnews.com regret that all letters cannot be addressed and that some might be combined in order to more completely address a topic.
To access Gail's past columns, simply use our new "Search" function: type in "Buckner" and you'll be able to get all Your $ Matters columns since April 2001.
The views expressed in this article are those of Ms. Buckner or the individual commentator. You should consult your own financial adviser for advice regarding your particular financial circumstances. This article is for information only and is not an offer of the sale of any mutual fund or other investment.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox