Identity Theft: Unstoppable and Devastating
Identity theft occurs when a criminal obtains and uses a victim’s personal information to commit fraud and other serious crimes. A criminal must first acquire his victim’s personal information before he or she can commit any crimes. Thieves can obtain this information in many ways, all usually involving social engineering or theft. Social engineering is used when an identity thief cons information out of a victim or people with access to the victim’s personal information. To do this, a criminal may send fraudulent emails or make phone calls posing as a representative of a real company. Information is also stolen from victims in a variety ways. Dumpster diving is the practice of rummaging through a victim’s garbage to find papers or other forms of personal information. Identity thieves are sometimes bold enough to steal information directly from a victim’s house or wallet. Also, the Internet makes it possible for criminals to obtain data through hacking.
Whatever means the criminal uses to obtain a victim’s personal information, he or she can use it to spend money and incur debts in the victim’s name. Identity thieves may open credit card and bank accounts or take out loans in other people’s names. To maintain this scheme for as long as possible, criminals sometimes redirect their victim’s mail to a different address. The victim will not receive notification from the banks or other companies and therefore will not be aware of the theft.
Although the effects of identity theft can be devastating, there are steps that one can take to prevent being victimized. The prevention of identity theft is based on protecting personal information, both passively and actively, and keeping up-to-date on credit reports and billing statements. These steps will help reduce the risk of being victimized for anyone who follows them.
The first step towards safety is establishing passive protection over one’s personal information. This means adding passwords to any financial or even personal accounts. Even email accounts should be password protected. These passwords should be memorized and should consist of numbers, letters, and symbols to make them difficult to guess. In addition, consumers should not carelessly carry around significant documents such as social security numbers or multiple receipts from purchases made with credit cards unless it is necessary to do so. Alternatively, these documents should be kept in private and secure places. The more difficult it is for identity thieves to obtain information, the more difficult it is for them to do any damage.
Passive protection alone will not protect one from identity theft. Active protection is the careful screening of who is authorized to receive personal information. To stay safe, one should always ask oneself, “Does this person/company really need my information?” This applies to phone calls, letters, online applications and forms, and any other scenario where someone is asking for information. Another way to actively protect personal information is to dispose of certain financial documents quickly by shredding or other techniques that will make it impossible for con artists to collect any information. Reducing the number of times information is given out will reduce the danger of identity theft.
The last step in identity theft prevention is keeping up-to-date on credit reports and billing statements. This accomplishes two objectives. First, it will help familiarize one with the information on his or her reports. Then, if any changes or unusual transactions occur, one will be able to recognize the problem and report it before serious damage can happen. Billing statements should be checked once a month. If the statement does not arrive on time, it may be a sign that a thief has changed the address on the account. Credit reports should be reviewed at least once a year. In some states, this annual report is free. There are even companies that will monitor their customers’ credit for a fee.
Any of these steps can be taken to help prevent identity theft. The plan is centered around keeping personal information safe and staying up-to-date on credit reports and billing statements. By using these techniques, one can decrease the risks of being victimized.
While identity theft is a very severe and damaging crime, the federal government has established several laws to protect consumers. Each law attempts to fix a problem caused by identity theft, from limiting consumer liability to preventing additional damage. Lawmakers have created multiple laws relating to identity theft, the majority either in place to protect consumers, or reduce their liability in the event of identity theft.
First, some laws help protect consumers and their personal information from being victimized by identity theft. The Federal Fair Credit Reporting Act establishes procedures consumers can take to fix errors on their credit reports. This law also limits who can alter and use credit reports, as well as how they can alter and use the reports. Similarly, the Fair Credit Billing Act allows consumers to fix invalid charges on their billing statements. Finally, the Fair Debt Collection Practices Act protects consumers on a different level. If consumers do fall victim to identity theft, this act prohibits debt collectors from deceiving them to collect overdue bills caused by identity theft.
Other laws also protect consumers by limiting their liability in the event that they fall victim to identity theft. For example, the Truth in Lending Act limits how liable consumers are if their credit cards are used to make fraudulent charges. The maximum amount of money a consumer can be held liable for is $50. This also eliminates the need for consumers to purchase fraud protection from credit card companies. Another law that fits into this category is the Electronic Funds Transfer Act, which limits the liability of consumers if their money is transferred electronically by an identity thief to $500. American lawmakers have established numerous laws pertaining to identity theft, but the two major objectives of these laws are to protect consumers and limit their liability.
As a result of identity theft, the banking industry has suffered greatly. According to a survey conducted by Financial Insights, six percent of the U.S. adults surveyed reported that they had switched banks to reduce the risk of becoming victims of identity theft. This accounts for twelve million Americans who do not feel as if banks are providing sufficient services to prevent identity theft, or enough services to aid victims in the aftermath. However, banks have started brainstorming ideas to help identity theft victims. The Banking Industry Technology Secretariat, a nonprofit industry group made up of 100 of the largest financial institutions in America, is trying out a new program that helps victims of identity theft by reforming the recovery process. Unfortunately, American citizens still feel that banks and other financial institutions are not doing enough to combat identity theft.
The online retail industry has suffered even more than the banking industry at the hands of identity thieves. According to the same survey conducted by Financial Insights, 18.3 percent of U.S. adults surveyed have stopped shopping online for fear of identity theft. This number accounts for 40 million citizens. The media certainly has not improved the situation by its numerous reports on identity theft incidents and high-profile cases involving major companies. Such reports include the theft of a laptop that contained Social Security numbers and other considerably important details of over 16,500 MCI employees this past May.
Online retailers have been fighting back against identity thieves. The Trusted Electronic Communications Forum, TECF, is an association made up of the top financial and technological companies who are working on taking down con artists that steal personal information. They are focused on two illegal practices: phishing and spoofing. Phishing occurs when false companies and organizations portray real companies by sending emails asking for personal information from oblivious customers. Spoofing is the act of manipulating web browsers into displaying personal information about the victims. TECF currently consists of 17 companies such as IBM, Best Buy, Charles Schwab, and other top name companies. The organization plans on recruiting more companies to help eliminate phishing and spoofing and raise the level of consumer satisfaction with online shopping.
From online shoppers to large corporations, everyone is at risk of becoming victimized. Through active and passive protection, one can greatly reduce this risk. While lawmakers, consumers, and executives can all take steps to protect identity theft, its effects are easily seen throughout the financial world. There may be a solution in the future, but presently identity theft remains a constant threat to our society.
