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CONTENTS:
Identity theft, in simplest terms, is the use of your identity without your knowledge in order to secure credit. That is, to borrow money or purchase goods and services. Today, identity theft is America's major white-collar crime, and it's growing fast, thanks in part to the ready availability of personal information on all of us via the Internet. You're very wise to take a few moments to study the subject here and learn how to protect yourself against its happening to you. If it does happen to you, it can turn your life upside down overnight. I. TYPES OF IDENTITY THIEVES There are two main types of identity thieves, namely, identity theft rings and individual identity thieves. Identity theft rings operate using a hit-and-run strategy. They appear suddenly in an area, set up their operation, identify potential victims, burn out their victims' credit, then shut down and disappear. How do these rings identify potential victims? Often, they target high-income individuals, such as people who own expensive homes or cars or are members of high-income professions, such as doctors or lawyers. Or they may target a group of individuals whose personal information is relatively easy to gather, such as college professors, government employees, or real estate brokers. Once the ring has identified its group of targets, it then hires an information broker to obtain their social security numbers -- which is a simple matter of running their names through credit bureau files using what's called a "national identifier search." (Use of credit bureau files in this way is now strictly illegal under the new Graham, Leach Act, but this doesn't deter many unethical information brokers.) As a rule, people whose social security numbers are found to be less than readily obtainable are dropped from the list of targets. After all, why bother, when there are so many millions of easy victims? Armed with social security numbers, the ring will then apply for credit cards, loans, lines of credit, and checking accounts in the names of the targets. It will have the credit applications, credit cards, and checking account applications mailed to a phony address, perhaps a small apartment rented in advance. Once the credit cards and blank checks start pouring in, the members of the ring go to work buying expensive merchandise (stereo and computer equipment and jewelry are favorites) and obtaining cash via bank credit lines or by cashing bad checks. Merchandise accumulated will be fenced or sold to pawn shops. Very soon -- before the credit card bills start arriving and the checks start bouncing -- the ring will collapse its operation and move on to a new area and a new list of targets. The other type of identity thief is the individual who, working alone, impersonates someone else in order to obtain credit. This type of identity thief can be just as devastating to you and your good credit standing as the organized crime ring described previously. An individual may get into this racket on either a short- or long-term basis. The short-term identity thief is looking for a boost in his or her standard of living and finds it by running up bills or obtaining cash using somebody else's credit. The long-term identity thief takes the scam a step further -- he or she essentially starts a whole new life somewhere far away using the credit history and/or employment history of the victim; in this case, oddly enough, there may be no financial loss to the target, for the identity thief is looking for a new start in life and will usually pay the bills he runs up on the credit lines he's been able to establish in the victim's name. Nonetheless, should he ever default on his obligations, he can destroy the credit of the person whose identity he is using. Furthermore, whether the thief is in it for a quick killing (the short-term thief) or for a whole new start in life (the long-term thief), the victim is at serious personal risk. For example, suppose an identity thief commits a crime -- or even a serious traffic violation -- while impersonating a victim, possibly by means of a fake driver's license or other forged document. It's quite possible, and has frequently happened, that the victim will then be arrested and charged with the crime or other offense perpetrated by the identity thief! III. WHAT TO DO IF IT HAPPENS TO YOU Your first indication that you've been a victim of identity theft will probably be the arrival in your mail of a bill for merchandise you don't remember ordering or a call from a merchant complaining about a bad check or an invoice that never got paid. If this happens to you, immediately gather as much information from the caller as you can, such as when the purchase or loan took place, type of credit used (credit line or credit card), account number, monetary amount, where bills were sent. If a credit application was filled out, ask to obtain a copy of it. Explain to the merchant exactly what's happened, i.e., that you did not make the purchase or authorize the account, and ask to be removed from his list of delinquent debtors and that he not report it to the credit bureau in your name. Be sure to use the phrase "identity theft" -- it's such a widespread crime nowadays that it will leave no doubt in his mind as to what you're talking about. You should then follow up this conversation with a letter; a sample letter for this purpose is provided in Section V. At this point, having discovered that you've been victimized, it's important to act quickly to minimize the damage to your credit standing. Start by immediately contacting all three major credit bureaus. Their numbers are:
Have a list of all your credit accounts and account numbers at hand when you call. You'll need to go through your credit report with the credit bureau representatives to identify accounts which are fraudulent. Instruct the representatives that each of those identified as fraudulent should be immediately deleted from your file. (Obtain the name, phone number and complete office address of each credit bureau rep you talk to and write it all down; you'll need it later.) Ask the reps for names, addresses, and phone numbers corresponding to all fraudulent accounts. You will need to contact each of these businesses and inform them that you've been a victim of identity theft. You should contact each one both by phone and confirm your conversations with follow-up letters (See Section V for a sample letter). Also, have the credit bureau representatives mail you a copy of your credit report, with the fraudulent accounts indicated. And as soon as you're off the phone to the reps, write follow-up letters to each of them, documenting your conversations (See Section V for a sample letter). Thus follow-up letters should be sent both to the credit bureaus and to the individual merchants and bankers you talk to. Within a week you should have your credit reports in the mail with the fraudulent accounts indicated, as you asked. These reports provide evidence that you've been defrauded. Take these documents to your local police station and file a formal police report. Keep the report with you; as pointed out above, it's quite possible you'll be charged with a crime -- such as passing bad checks -- perpetrated by the identity thief. The police report will go a long way in convincing the police that your "identity theft" story is true! Having done all of the above, you still have several important tasks ahead of you to prevent this incident from turning into a real nightmare:
There are a few simple steps you can take to make yourself an unattractive target for identity thieves. As outlined in Section II, above, the key piece of information sought by these criminals is the social security number. Once they have your SSN, it's a simple matter for them to start opening checking accounts and applying for credit cards in your name. What then can you do to make your social security number harder for them to obtain? Remember that identity thieves commonly get their targets' social security numbers through information brokers (which have proliferated on the Internet). But how do these unethical information brokers get your SSN? The answer is the so-called "National Identifier Search," a computerized scan of the files of the big national credit bureaus which permits retrieval of social security numbers and other "header information" (i.e., the information at the top of your credit report); all the information broker needs is your name and address to run this search. Now, there's not much you can do to keep an identity thief from getting your name, but you can make it difficult for him to get your home address. The way you can do this is by using a post office box number on all credit applications and other types of forms which will become public information, such as voter registration records, instead of your home address. Many experts recommend you obtain a private post office box number, such as those available through Mail Boxes, Etc. or Pac Mail. The advantage of using a private post office box, as opposed to those offered by the U.S. Post Office, is that you can use the street address of the Mail Boxes, Etc. or Pac Mail shop as your own, and then indicate "# [your box number]." In this way, you have the use of an actual street address for those situations in which this is a requirement. Use your post office box address in all legal paperwork, on all credit applications, job applications, mail orders or Internet orders, warranty cards, etc. A second very important step in identity-theft protection is to get your telephone number out of general circulation. Today, it is quite simple to obtain someone's home address via their telephone number, using an online criss-cross directory. Remember, once the identity thief has your address, it's easy to get your social security number. So you want to make your phone number (hence your address) as difficult for strangers to obtain as possible. You want, in other words, to have your number taken out of the phone directory, and thereby also out of CD-ROMs and other databases now commonly available which provide nationwide listings of numbers. To accomplish this, contact your phone company and request that your number be non-published (don't use the word "unlisted," as unlisted numbers still show up in many phone-number databases). Just those two simple steps -- using a post office box for all public correspondence and getting your telephone number changed to "non-published" -- will help greatly in protecting you from identity thieves. But why stop there? There are a number of other important steps you can take to further protect yourself:
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