How Identity Theft Works and How to Protect Yourself

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For the seventh straight year, the Federal Trade Commission says identity theft is the largest consumer complaint and the fastest growing crime in America. In 2007, the FBI reported that identity theft affected 9.91 million Americans. There are probably many more cases that went unreported. It accounted for $52,600,000,000 (billion) in losses in 2007.  2008 statistics are not available as yet but the numbers are expected to be at least 10% higher.

In a way we can thank the U.S. Congress for the increase in identity theft. Congressionally-mandated use of the Social Security number as an identifier facilitates the horrendous crime of identity theft. Thanks to Congress, an unscrupulous person may simply obtain someone's Social Security number in order to access that person's bank accounts, credit cards, and other financial assets. Many Americans have lost their life savings and had their credit destroyed as a result of identity theft. Yet the federal government continues to encourage such crimes by mandating use of the Social Security number as a uniform ID!

In the rush to respond to identity fraud, too often organizations believe that credit monitoring is the beginning and end of the solution. The fact is that credit monitoring is only one of the necessary elements. Credit reports only inform you AFTER fraud has occurred. Because of their commitment to safeguarding the financial security of working families, labor unions are now advocating that their members place identity theft protection high on their priority lists. Effective identity theft protection for union members should include a wide array of proactive and responsive components.

Identity thieves and hackers target home computers because they know families often do not maintain adequate security protection on their PCs. This makes these family users easy, lucrative sources. Many hackers access your personal information in order to steal your money and your identity or use your home computer as a shield to mask their identity as they steal from others.

Credit reports contain all the information any thief would need to steal existing accounts, or to swipe your identity completely and cause major financial harm. There are several ways those in the credit reporting industry manage to balance the need for accurate account information to issue credit ratings, while keeping enough information hidden to protect you from theft. But, not all systems are hacker proof. Data security standards are extremely high, and audits are frequent but not all systems are hacker proof.

Group identity theft has also become a major problem for consumers. A thief gains access to a place that keeps records for many people. Targets have included stores, fitness centers, car dealers, schools, hospitals, and even credit bureaus. Thieves may either use the stolen identities themselves or sell them to other criminals.

One of the most used scams is called "Pretexting". The identity thief poses as a legitimate representative of a survey firm, bank, Internet service provider, employer, landlord, or even a government agency. The thief contacts you through the mail, telephone, or e-mail, and attempts to get you to reveal your information, usually by asking you to "verify" some data.

They usually ask for your full name, social security number, and date of birth. Then, they want bank and credit card numbers and expiration dates, any financial records they can get you to reveal.

They are many ways to protect yourself. Most of all, never give your information to a stranger, especially via email or telephone, and always contact the institution they claim to represent to check legitimacy.

Jim DeSantis is a retired broadcast journalist. For his free report - How To Protect Yourself From Identity Theft - visit Jim's website Gifts from Jim DeSantis - here! No email or signup is required to get this free ebook.

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