|Breaking It Down: |
Types of Fraud
|Type||% of Victims|
|Credit card fraud||42%|
|Phone or utilities fraud||20|
|Government documents, benefits fraud||6|
It's So EasyMore than anything else, experts said that the ease in which criminals can get vital information was the leading factor in the explosion of identity theft. "It's too easy to commit identity fraud," says Allan Trosclair, executive director of the Coalition for the Prevention of Economic Crime. Often, that information is lying around an office. The FTC estimates that more than half of all identity theft results from compromised business records. An employee, be it a janitor, temporary employee or executive, will steal and use the information you jot down on a car application, a doctor's form or even a job application, says Joanna Crane, senior attorney with the FTC's identity theft program. Criminals will even bribe back-office employees to get access to information, she says. Some criminals will root through your mail in search of credit card offers, preapproved credit cards and bank statements. For example, criminals will intercept credit card solicitations and apply for cards in your name. While waiting for the card, the thieves can file a change of address form with the post office and have it sent elsewhere. Or, they intercept the card, activate it and go on a shopping spree. "There are organized groups that go out there and steal mail from your mailboxes," says Norm Willox, chairman of the National Fraud Center. Indeed, the massive amount of credit card solicitations could be a major factor in the explosion in identity theft. According to market researcher BAIGlobal, year 2001 is on track to shatter the record 3.5 billion solicitations sent in 2000. Halfway through 2001, 2.4 billion were already sent. Not only is it easy to commit identity theft, it's an attractive option for criminals who can score big and serve little or no jail time. On average, identity thieves stole $17,000 and served a maximum one-year jail sentence, says John Foley, director of consumer/victim services at the Identity Theft Resource Center in San Diego. Foley adds that the average armed robbery netted $3,500 with a seven- to 10-year jail term. "Judges still look at identity fraud as a white-collar crime," he says.
World Wide Web of DeceitTechnology aids these criminals, who can anonymously charge thousands of dollars in just minutes on the Internet. But while the Internet facilitates committing fraud, it's not the largest source of the identity theft itself. Only 10% of all identity theft originated from the Internet in 2001, according to Celent. But that number is expected to increase to 25% by 2005.
|Worried? Call and Get a Credit Report|
Wake UpDespite the rising danger, three out of five Americans said they were not worried about identity theft when polled by eFunds, an online financial services company, in December 2001. But they should be. It can take years to fix your credit rating once it's been tarnished by a criminal; you'll have to settle with individual creditors on a case-by-case basis. "It's your job to clean up the mess," says Trosclair. While it's difficult to prevent criminals, especially those in back offices, from stealing your information, there are ways you can protect yourself. "Buy a shredder," says Trosclair. Get in the habit of shredding documents before throwing them out. Also, never leave outgoing mail in your mailbox. Don't put your Social Security number on checks. One-fifth of people polled by eFunds printed their Social Security number on their checks, right alongside their name, address and bank account -- everything needed to start committing fraud. "Make sure you get all your credit card receipts back," says Willox. "And don't carry multiple credit cards." Retail counter clerks can easily steal your information if you're not paying attention. And if your wallet is stolen or lost, a thief will hit the jackpot if you're carrying a half-inch of plastic.
|The Iceberg Cometh: Identity Theft to Increase |
|Year||Identity Theft Cases|
|* Projection. Source: FTC, Celent|
When shopping online, stick to the larger, more reputable Internet retailers like Amazon.com. Many times, consumers don't know where they're sending their credit card information, Trosclair says. "Don't fall for the ink-cartridge sellers and those PC cameras. Who are those guys? Not CompUSA." Willox's best advice is to register for a credit-tracking service like Privista.com, which sends you weekly credit report updates for a $50 annual fee. If you're unwilling to sign up for a service, you should still check your credit report. According to the FTC, the average identity-theft victim doesn't know about it for 13 months. "It's a few bucks to get a credit report, but it's worth the money," says Trosclair. Don't be like Oprah, Tiger and Warren. Be yourself.