Identity theft will be the crime of the millennium. It dominated the news recently when three credit card company employees were arrested for selling the data of 30,000 customers for $100 each. Fraud is perhaps the most common crime, and ID theft is another form of fraud. ID theft is growing rapidly, however, and soon will be the major form of fraud.
Frank Abagnale was perhaps the greatest con man in history. His autobiography, Catch Me If You Can (Broadway Books; $14.95), describes his five years scamming about $2.5 million in various frauds. The movie version was released for Christmas, produced by Steven Speilberg and starring Leonardo DiCaprio and Tom Hanks. Abagnale has spent 25 years since prison as a consultant to governments, major corporations, and associations. Recently, he wrote The Art Of The Scam (Broadway Books; $24.95) to explain frauds and how to avoid becoming a victim.
Abagnale says ID theft is in its early stages and will hit full force in about 10 years. It wasn’t even a federal crime until 1998.
The sad truth is that fraud victims are on their own. Most con artists aren’t found, and the few that are often aren’t prosecuted. A small percentage actually do jail time, usually short terms. Abagnale, for instance, did just one year in European prisons and three years in the U.S.
Here are some tips from Abagnale and others on how to protect yourself from ID theft and other frauds.
Checking fraud and theft. Most people think the bank is responsible if someone a signature. The bank, however, won’t cover the loss if you are in any way negligent. Leave the checkbook in your car or on your desk, and it’s your fault. Use deposit slips to record notes or as business cards, and the bank won’t cover your loss.
Technology makes checks very easy to reproduce. All a crook needs is your bank account number, the bank routing number, and your name and address. To avoid divulging this information, don’t leave outgoing bill payments in an unsecured mail box with the flag up. Con artists drive through neighborhoods looking for the flags and copy the vital information. Abagnale won’t write a check in a store, because clerks can sell the information for about $100.
Checks printed on laser printers also are a problem. Anyone who receives a signed laser check can easily remove the laser printing and substitute new printing with a much higher payment amount. Abagnale says the only ink that is difficult to remove from a check is in the Uni-ball Gel pen.
Be sure the bank returns all canceled checks (not photocopies or other images) with your bank statement, and review those checks. Do this even if it costs more.
Credit cards. Using a credit card is much safer than writing checks. The credit card company covers all losses most of the time. All you have to do is review the statement each month and report any problems.
Even so, you must guard credit card information. Credit card fraud is popular among con artists, because they can make a lot of purchases before a card is canceled. Obtaining credit card info also can lead to full-fledged identity theft, so you want to protect credit card information.
If you don’t receive a monthly statement, call the credit card company. Someone might have pretended to be you and requested that the billing address be changed.
Don’t say your credit card number aloud, even over the telephone, unless you know and trust everyone listening. Don’t allow a store clerk to say the number either. Don’t give your number over the telephone unless you called and are confident it is a legitimate business.
Pre-approved credit card forms frequently are stolen and used to get cards for cons. Be sure to shred all unused forms before disposing of them. Also, don’t leave incoming mail sitting in the box for long, such as when you are out of town. Shred all expired credit cards, preferably disposing of the pieces in different places.
It is a good idea to check your credit reports from the three major credit reporting agencies at least annually (see the box). Look for credit inquiries from companies at which you never applied for credit and for unfamiliar credit cards or other debts. If those are on the report, someone is applying for credit in your name.
There also are credit alert services that promise to report all inquiries and negative reports. I’ve heard mixed reports about how well these firms perform their services, so I don’t know if they are worth the annual fees.
Identity theft. Check and credit card fraud are just a small step from full-fledged identity theft. Someone can obtain driver’s licenses, credit cards, mortgages, and other things in your name. They can commit crimes and use your ID when caught. They’ll leave town without paying debts, and everything they do will be on your credit report and other records. It can take years to get it cleaned up.
Here’s a special type of ID theft that targets seniors. The crooks will locate a neighborhood with older homes. They will examine local property records and find those homes without mortgages. Then they will get the personal information of those homeowners. Tactics include rooting through mail or garbage. Some thieves even will pose as laborers and do work in or around the home just to get a check signed by the homeowner. With the information, the con artist poses as the owner and obtains a mortgage. The thief leaves town with the mortgage proceeds while the homeowner is mailed a payment coupon book.
The key information for ID theft is the Social Security number. Never have this number in your wallet or carry the card. If ID cards, such as the driver’s license, use the number it is a good idea to request a different number. Other key numbers, such as PINs for ATM cards, should be memorized. If you can’t memorize them, don’t use them. As with credit card numbers, don’t say them aloud.
Do not include the Social Security number on checks or give it to store clerks who request it. Don’t auto-matically give it when completing a form or purchase. Make the person justify the need for the number.
Consider not completing sweepstakes or registration forms to earn free prizes or enter contests. Some cons set up the operations just to get the personal information, or a dishonest employee can sell the information.
When entering numbers in a key pad (such as at an ATM machine) be sure no one is able to see the number. Some ID thieves park across the street with binoculars.
If you were divorced and the courts were involved, then all the information is public. Anyone can go to the courthouse, request the record, and find all the personal information in the file.
You don’t ever have to use the Internet to be victimized by it. There are web sites at which for less than $100 Social Security numbers and other personal information can be purchased. Complete background checks of people can be conducted, revealing an amazing amount of information about anyone selected. The only way to prevent this is to keep the information out of the public domain as much as possible. The Internet can provide some help. Go to www.google.com and type “identity theft” in the search line. You’ll be presented with a list of useful government and other sites.
Preventing ID theft is very difficult to do, and even the most careful person doesn’t have control of personal information all the time. That’s why you should consider purchasing ID theft insurance. Several insurance companies offer this is a rider to regular homeowners’ insurance.