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The New Look in Identity Theft

Last update on: Dec 20 2018

Identity theft still is the fastest-growing crime in the nation. But the crime is changing as individuals and authorities become more aware of the problem.

The good news is that victims are discovering ID theft crimes faster. The bad news is that the effects are more costly and longer-lasting. The crime now is discovered within one to six months instead of 12 to 18 months, according to the Identity Theft Resource Center. The more prompt discovery is attributed to creditors’ stronger bill collection efforts. The average out-of-pocket cost, including expenses incurred to correct the effects, is $1,495, up from $808 in 2000. It now takes about 609 hours to resolve the related problems. The information was derived from e-mail interviews with 174 ID theft victims.

The Federal Trade Commission, meanwhile, estimates that there were nearly 10 million victims of ID theft in the U.S. in 2002. The total cost to victims was $5 billion and took about 300 million hours to correct. The cost to businesses and financial institutions was estimated to total almost $48 billion. The FTC derived these estimates from telephone interviews with a sample of Americans. The FTC says the results indicate the problem is larger and more expensive than previously believed. About 4.6% of respondents said they were ID theft victims in the last year.

There also is a big change in the nature of the crime, according to the FTC.
In the past, most ID theft seemed to involve stealing someone’s personal information (such as Social Security number) and using that to incur new debts. That type of ID theft certainly garners most of the publicity. The FTC says that type of crime is more expensive, costing the average victim about $10,200. Yet, its victims were less than half as numerous as victims of another type of ID theft.

By far, the most common type of ID theft was abuse or misuse of existing accounts. The crimes in this category include unauthorized charges on credit cards, withdrawals from ATMs, and unauthorized telephone use. This type of fraud costs businesses $2,100 per victim, and costs the victims about $160 each.

To determine how to protect yourself, take a look at how victims believe the crimes occurred. About 23% of the victims said personal information was lost or stolen from drivers’ licenses, credit cards, and mail. In 13% of cases, the theft occurred during a transaction. For example, a criminal might take information from a credit card receipt during or after a transaction. The transaction might be in person or by mail, phone, or the Internet. In 14% of cases personal information was taken by someone the victim knew, such as a family member or household employee. Perhaps most disturbing is that in 49% of cases, the victims said they did not know how their personal information was stolen.

To protect yourself, make use of the methods we’ve recommended in past visits:

Keep your Social Security number confidential. Have the number taken off your driver’s license if your state will do it. Don’t carry anything with the number on your person or in your wallet. Do not give your Social Security number to anyone unless you know who is asking and are sure they need or are required by law to have the number. See the March 2003 issue or the Scam Watch section of the web site Archive for additional advice on securing your Social Security number.

Keep your mail secure. Don’ leave bill payments or other outgoing mail in your mailbox. Thieves sometimes troll through neighborhoods to take this mail from boxes so they can get personal information from the checks or other documents. Take payments to the post office or a designated mail box.

Use a post office box. Having important mail sent to a post office box might be less convenient, but it keeps thieves out of your mail. It is not unusual for ID thieves to grab delivered mail so that they can use the pre-approved credit card applications, bank statements, and other information.

Destroy documents. ID thieves go through trash to get those pre-approved credit card applications and anything else with personal data, such as bills and canceled checks. At a minimum, tear up papers that you throw away and that have personal information. Even better, buy a shredder and use it. A cross-cut shredder is best. Additional defenses are in the January 2003 issue and in the Scam Watch section of the Archive on the web site.

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