Should I sign up for one of those credit card programs?

Give Me ID Protection!

Foreword

What would you do if you were arrested for a crime you didn’t commit and couldn’t explain why the warrant has your name and address?

What if you went to buy a car and found out your credit had been wrecked…and not by you?

What if your health insurance provider dropped your coverage because of pre-existing conditions you never had?

How would you feel if your child called from jail saying she was arrested for drug charges she knew nothing about?

What if you received a notice from the IRS that you were being audited and owed $48,120 in taxes on income you never earned.

And how would you feel if you found out that it was going to take hundreds of hours of your time, and thousands of dollars, to clear your name after you’d been victimized by identity theft? What if, despite your best efforts, the effects lingered on your credit report for 10 years?

What would you do? Who would you call?

If you’re concerned about protecting yourself and your family from the horrendous effects of identity theft, you owe it to yourself to read the following information.

In today’s world, identity theft and fraud are growing fast and have already affected millions of innocent consumers in this past year alone. Think identity theft will not, can not, happen to you? Think again. Federal statistics show identity theft is the fastest growing white-collar crime in the United States. In January of 2005, the Better Business Bureau reported that more than 9.3 million Americans had been victims of identity thieves in the past 12 months. Can you prevent identity theft? Do you know the most common types of identity theft and what to do if your identity is stolen? Where would you start? What can you do?

Identity theft is much, much more than just someone getting your credit card information and misusing it. In this report, you’ll learn facts about identity theft, how widespread it is, and what you must do to protect yourself from it – no one is going to do it for you and if you don’t protect yourself, you’re very likely to become the next identity theft victim.

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Identity Theft : Are You At Risk?

 

In 2004 the Better Business Bureau reported that identity theft cost Americans more than $52 billion during 2003. Most thieves target ordinary citizens: businesspeople, housewives, teenagers, the elderly…people just like you. If you haven’t already been an identity theft victim, you probably know someone that has an identity theft story.

Try this experiment – when you’re at a party or social gathering, ask if anyone has had their identity stolen or knows someone who has. I guarantee you several people will have stories to share related to identity theft.

How would you feel if that happened to you? Who would you call?

Identity thieves need relatively little information to steal your identity. In many cases a name and address is enough to begin the process.

Unfortunately you may not find out you are a victim of identity theft until it is too late. Did you know that more than 85% of victims will find out about identity theft only AFTER they suffer through countless phone calls and letters written to credit bureaus, banks, and even courts of law? What if it is happening to you right now and you don’t even know it?

What if you went to buy a new car and they pulled your credit and then the loan officer raised her eyebrows and said, “Oh, I’m sorry, but I see that you’re already 90 days overdue on two previous car loans and that your second home is in foreclosure. We can’t approve you.” And mind you, these are car loans and a second home loan that you never took out!

Anyone who has a checking account is also at risk. Even worse, anyone with a social security number, which today means everyone, is at risk for identity theft.

Even your children are at risk for identity theft. One of the latest techniques thieves have adopted is stealing the identities of babies. And it’s not always strangers who do this; non-custodial parents have done it, too. Responsible parents are finding that they need to safeguard not only their identity, but also that of their children.

What would you do if you came home and found your high-school age daughter crying her eyes out because her favorite college had turned her down, citing her poor credit history and criminal record…and you knew she’d never had a credit card nor any trouble with the law?

It’s happened. Child Identity theft has also caused problems for those kids when they grow up and try to get their first job.

Often it is even out of your control. In June of 2005, CitiFinancial, the consumer finance division of Citigroup, Inc, notified almost 4 million U.S. customers' that computer tapes containing information about their accounts — including Social Security numbers and payment histories — were lost.

It is happening all the time, in May of 2005 media and entertainment company Time Warner Inc. said that computer backup tapes containing data on 600,000 individuals were lost by an outside data storage firm. The list goes on and on of companies who have had the same problem – Ameritrade, BankofAmerica, MasterCard, Wachovia, Ralph Lauren…

Anyone is a potential victim in the eyes of an identity thief. Here are some examples of cases that happened to real people across the nation:

• In 2003, a Texas woman was pursued by the IRS for back taxes. She received a letter from the IRS stating that she failed to report income in 2003 that she’d never received. The woman struggled for months in an attempt to clear her name with the government, including filing reports with police, credit bureaus, the FTC and the IRS, and the Social Security Administration.

• In California, a woman returned home after living abroad for four years to find that her home had been rented out in her absence. The criminal rented her home out by posing as the landlord.  He forged a power of attorney in the woman’s name and used it to get a home equity loan on her home and took the quick cash. The Identity theft left the woman with thousands of dollars in debts she had to pay.

• A customer of a VA credit union found himself $7,000 in debt after his checkbook was stolen, even though he’d stopped payment on his checks for six months. The bank had failed to close the account as directed, yet they held the customer responsible for the financial loss that resulted from Identity theft.

• In Washington D.C., a woman received notice that her son was to appear at a bankruptcy hearing. Her son was only five years old. The woman learned that the father had stolen the son’s identity and was filing bankruptcy under the boy’s name.

• The New York Attorney General recently arrested a man who’d been working in the insurance industry for Identity theft. The man used personal data he collected at work to steal several people’s identity. The identity thief ruined the other employees’ credit ratings and most victims lost a lot of money that they were not able to get back.

• Also in New York, a clerical employee secretly collected the personal information of several employees at an insurance company and then used the information to steal more than $100,000 worth of goods and services.

• One victim found that a stranger started using her social security number and professional licensing information to impersonate her. The thief took out loans, property and even bought a car in her name, then later filed for bankruptcy.

• An 18 year old found that her landlord had tricked her into signing documents that allowed him to file two bankruptcies in her name to avoid foreclosure on his properties.

Notice anything that all the examples above have in common? Here are a few:

1. None of them are about credit cards. Too many people just think of credit card fraud and credit card theft when they hear about Identity theft. There are numerous other forms of identity theft. In fact, credit card theft isn’t even the most lucrative for of Identity theft.

2. All of these examples were happening without the identity theft victim knowing about it.

3. These were all situations in which the identity fraud victim had no ability to prevent the Identity theft.

Still think it can’t happen to you? Well, it’s happening to millions of real people, and the statistics say it’s just a matter of time before ID theft happens to you. You must take steps to protect your identity, but even more importantly, you must be informed about what to do WHEN your identity gets stolen.

Unfortunately, right now it is unlikely that you can prevent identity theft. It’s like protecting your home. Most people don’t think their house will catch on fire, but the smart ones buy fire extinguishers, home insurance, fire alarms, and monitoring service.

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Fast Facts On Identity Theft

 

The statistics on identity theft are alarming. The Identity Theft Data Clearinghouse, working with the Federal Trade Commission, produced an identity theft report in February of 2005 showing:

• Identity theft and fraud losses totaled more than $547 million during 2004.

• Identity thieves can literally steal thousands and thousands of dollars from an unsuspecting consumer in very little time, often before they even are aware of the ID theft.

• Internet complaints comprise more than 50% of all reported complaints, totaling more than $265 million dollars in personal identity theft losses.

• 28% of all reported identity theft is credit card fraud, followed by utilities, bank and employment fraud.

• The number of victims of identity theft who have their money stolen via electronic funds transfer has more than doubled in the last two years. As more people use the Internet as a means of commerce, more opportunities arise for thieves to steal confidential information.

What would you do if you found out that as a result of a hacker attack during the Christmas shopping season, your personal information had been stolen and now some company you never heard of is demanding immediate payment of an overdue $11,000 debt?

According to Chris Swecker, Assistant Director of the Criminal Investigative Division of the Federal Bureau of Investigation, identity theft has emerged as one of the “dominant white collar crime problems of the 21st century.”

The victims of identity theft may lose their ability to utilize their credit and their financial identity, the impacts of which may last for years after the initial crime is committed.

A survey issued in 2003 by the Federal Trade Commission reported that the number of consumers victimized by identity theft over 2002 year comprised more than 9.91 million people, with losses exceeding $52.6 billion.

Many experts think your chance of being a victim are 1 in 8. Next time you eat out look at your table of 4 and the group of 4 next to you – one of you is an identity theft victim.

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What Type of Information Are Thieves Looking For?

Thieves are looking for any and all personal information that will help them access your bank accounts, apply for loans or credit in your name, or even get a job or run a business using your identity.

They’re looking for your:

• Name

• Address

• Phone Number

• Birth Date

• Social Security Number

• Previous Employers

• Name of your spouse or children

• Mother’s maiden name

They use your name to search online and offline for more of your personal information. As they pick up pieces of information, they will use that to get more new pieces. For example, if they know your place of employment and your doctor’s name, they will call and pose as you, trying to get more information (perhaps by claiming they need to contact you right away and need your cell phone number.) Every little piece gets them one step closer to your identity.

Your address can be used in many ways. They might use it as a legitimate street address to get credit, then run up a bunch of debts in your name. They could also use it on an employment application. If your mailbox is open and accessible, they may even use it as their own personal mailbox to receive contraband.

What would you do if you found drugs in an envelope in your mailbox? What if the Postal Service found it first? Who would help you?

Businesses are increasingly using phone numbers as account numbers to store your customer profile. If an ID thief has your phone number and name, he can pose as you to any number of businesses you patronize, particularly your phone service provider.

You might not think your birth date matters, but it does. Armed with your name and birth date, a thief can obtain your driver’s license data in most states. He can also use that information to get credit data.

The golden key, however, is the Social Security number. With this, a thief can get your credit report, establish credit in your name…even potentially refinance your property and get cash out of the deal. This is why it should concern you when colleges, insurance companies, banks and others use SSNs as ID numbers. Just think what you can do with only the last 4 digits of your SSN. Think a thief can’t do the same in your name?

Previous employers can be used to gain access to your credit report, or to build a history that the thief can present as his own to gain credit or loans in your name. He could even buy a car or house in your name.

So where are thieves getting all of this information?  We will cover this a little more later, but some of the more common places are::

• Your mailbox

• Your trash

• Stolen purses or wallets

• Overheard phone conversations

• Credit card and bank receipts and statements

• Online spyware that they put on your computer

• Online hacking tools

And what do they do with it? What they do with it is impersonate you on paper so they can:

• Clean out your bank account

• Charge things on your credit cards

• Open new credit in your name and buy more things

• Get cell phones and service in your name

• Get a job and/or professional licensing in your name

• Declare bankruptcy in your name

When it comes to identity theft, no one is safe, not you, nor your children, nor your family!

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Types of Identity Theft

Contrary to what you might think, identity theft is more than just credit card number theft—far more. In fact, the 5 most common forms of identity theft are:

1. Social Security number (SSN). These are appallingly easy to steal, and once a thief has yours he can open bank accounts in your name, get credit in your name, and access all sorts of records that are listed by SSN such as medical records and credit reports. Using this info, he can steal your identity and get jobs under your name. He might even get arrested using your identity.

2. Driver’s License. It used to be that most drivers license thefts were minors looking for a way just to get into a bar. Now stolen drivers licenses can give a thief a person’s entire life! Even just the drivers license number is enough and many make it easy by printing it on their checks for “convenience”. Don’t do it. No law requires you to have this number on your checks, and if a thief happens to work at a store that gets checks with driver’s license numbers on them, he can steal them and use them to open bank accounts, get credit cards, and steal your identity.

3. Employment. When a thief gets your work history (which he can do easily if you post your resume online), he can steal your identity by using it as his own to get a job under your name. This in conjunction with your Social Security number and all of a sudden he takes a job, doesn’t pay taxes on the income and you get stuck with the tax bill and IRS audit. You don’t even know this is going on!

4. Finance. If the account number to your checking, savings, and online brokerage accounts are stolen, a thief can clean those accounts out before you even know they’re being drained. This area also includes the well known credit card fraud, discussed more later.

5. Health records/insurance. Thieves buy and sell health and insurance records, primarily because those records are often a goldmine of personal information such as name, address, SSN, place of employment, and even driver’s license numbers. Your insurance information can be sold to someone with serious issues like heart disease, AIDS, or Cancer. Then when you go to have something checked out you find that your insurance has been canceled or they won’t cover you because you have a ‘pre-existing condition’. Think of the stress involved when you have a medical issue and you have to try to sort out your identity to get treated! Anyone who works in any doctor’s office you visit can get your information – nurse, janitor, even the person that just waters the plants!

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Common Identity Theft Scams

Contrary to what you might think, identity theft is more than just credit card number theft—far more. In fact, the 5 most common forms of identity theft are:

1. Social Security number (SSN). These are appallingly easy to steal, and once a thief has yours he can open bank accounts in your name, get credit in your name, and access all sorts of records that are listed by SSN such as medical records and credit reports. Using this info, he can steal your identity and get jobs under your name. He might even get arrested using your identity.

2. Driver’s License. It used to be that most drivers license thefts were minors looking for a way just to get into a bar. Now stolen drivers licenses can give a thief a person’s entire life! Even just the drivers license number is enough and many make it easy by printing it on their checks for “convenience”. Don’t do it. No law requires you to have this number on your checks, and if a thief happens to work at a store that gets checks with driver’s license numbers on them, he can steal them and use them to open bank accounts, get credit cards, and steal your identity.

3. Employment. When a thief gets your work history (which he can do easily if you post your resume online), he can steal your identity by using it as his own to get a job under your name. This in conjunction with your Social Security number and all of a sudden he takes a job, doesn’t pay taxes on the income and you get stuck with the tax bill and IRS audit. You don’t even know this is going on!

4. Finance. If the account number to your checking, savings, and online brokerage accounts are stolen, a thief can clean those accounts out before you even know they’re being drained. This area also includes the well known credit card fraud, discussed more later.

5. Health records/insurance. Thieves buy and sell health and insurance records, primarily because those records are often a goldmine of personal information such as name, address, SSN, place of employment, and even driver’s license numbers. Your insurance information can be sold to someone with serious issues like heart disease, AIDS, or Cancer. Then when you go to have something checked out you find that your insurance has been canceled or they won’t cover you because you have a ‘pre-existing condition’. Think of the stress involved when you have a medical issue and you have to try to sort out your identity to get treated! Anyone who works in any doctor’s office you visit can get your information – nurse, janitor, even the person that just waters the plants!

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How Do Thieves Steal Your Identity?

So now you know ID theft is likely to happen to you or someone you know. Another important question about ID theft is how thieves do it. There are a number of different ways it can happen. The shocking reality is that most identity thieves focus on stealing your identity without you knowing about it. In fact, most are quite skilled in knowing exactly how much time they have and what areas of your life and finances they can rob very quickly.

Your checking account may be drained, your credit rating may plunge by 100 or more points, and your reputation may even suffer when a thief gets hold of your information. What would it feel like if you got a call saying your credit cards had been cancelled due to your recent bankruptcy – when you know nothing of a bankruptcy?

All a thief needs to get started is your birth date, any identifying information about you and your social security number. With this information a thief can obtain a drivers license, apply for credit, open a bank account, acquire a car loan, and even obtain a job…all in your name.

It is quite easy to find very personal information the government stores on you. Your real estate deed, property tax information, phone numbers, birth information, court records, and more are readily available and give thieves tools they need to take on your identity.

Many thieves simply acquire your information from a dumpster. They may go through your garbage cans late at night. They might get copies of old checks, credit card or bank statements. Anything that has your name, address or telephone number is a potential gold mine for criminals. Just think of the damage a thief can do with just your credit card statement and your mother’s maiden name.

Consider this example. You get a call from your doctor’s office. They say, “Hi, this is Doctor x’s office. We are processing your claim and just needed to verify your insurance and social security number. Oh, looks like we also don’t have your driver’s license in our file let’s update that while we have you on the line. Ok, and we needed your credit card information for the co-pay.” Well, you did just go to the doctor so you give them the info. Little do you know that someone got your doctor’s statement from your trash and now you just gave this thief all of your information!

One of the number one ways identity thefts can hurt you is by stealing pre-approved offers from credit card companies in the mail. Do you simply toss all those “You’re Pre-approved!” junk mails in the trash? Then it’s only a matter of time before they’re stolen and misused.

More and more criminals are also using the Internet to commit crimes. The Internet is very appealing for a number of reasons. Criminals can obtain passwords, banking information and other personal information without you even realizing it. Many acquire information through programs that seem legitimate.

Have you ever entered personal information like your social security number, credit card numbers, or address, into your computer? Are you on a wireless network? Do you carry your social security card in your wallet? If so, you may have already been targeted by an identity thief!

Think your personal information is safe in the hands of a professional? You are probably mistaken.

A thief can obtain your private information from a number of sources you may not even consider. Your doctor’s office, your dentist, your health insurance carrier, your attorney, your apartment complex… even your current job. Any organization that contains personal and confidential information about you is a potential target for thieves. This is why most reputable organizations now have a privacy policy. Ask for it and read it.

You don’t need to lose your wallet to have your identity stolen.

Some of the more common ways thieves steal information is via social security numbers, credit card numbers, and then sell them via the Internet. Let’s look at this more closely.

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Trying to Survive Identity Theft

Here is some important information about identity theft that you should know:

• The average time you will spend trying to resolve the effects of identity theft is more than 600 hours according to the Identity Theft Resource Center.

• Because our lives have become so tied to our identity, it now takes longer than ever before to correct problems that result from identity theft. Many victims find themselves trying to clear their name for years after an identity thief has stolen their identity.

Among the most common crimes committed include opening or taking over a credit card account. Many victims find themselves facing thousands of dollars of credit card burden after a thief has stolen an account from them.

How would you survive if you found out you were suddenly $100,000 in debt because a thief acquired a credit account in your name?

More than 85% of victims will suffer long-term consequences according to the Federal Trade Commission and Identity Theft Resource Center. You could find yourself struggling five years or more to clear your name. In the meantime, creditors will be hounding you, day in and day out, to make restitution for the money a thief stole from you.

More than 4.6 % of the population will be victims of identity theft this year alone. You may already be part of this statistic. Are you certain your identity is safe?

Did you know that according to the FTC 49% of victims don’t even know their identity has been stolen? Trying to survive identity theft can be challenging at best.

If you are a victim of identity theft one thing is certain, you will lose a substantial amount of time, money, respect and energy trying to clear your name. Do you want to be one of the millions of people that find their lives ruined because some random person steals your identity?

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Social Security Fraud

Social security numbers are often used as the impetus for identity theft.

Many unknowing victims find their social security number is abused whether or not they give it out willingly. For example, one senior citizen found that the local transit agency she used every day had put her social security number on her bus pass. The driver was found to be writing down customers Social Security numbers in a little notebook for his use later.

Some companies still use social security numbers as employee ID numbers. One employee who worked as a sales agent for a long distance company complained because he noticed his SSN had been printed on the paperwork customers were receiving.

Many financial institutions use Social Security numbers as online or offline forms of identity. Sometimes it is used as your id name and other times as your password. They also may be printing it on your statements.

Many insurance companies use Social Security numbers on the health cards they provide. This makes Social Security fraud very easy. If your Social Security number is on your insurance card, call the insurance company and demand they change this practice.

Have you ever provided your Social Security number to a company, organization or individual? If so, you may have already been targeted by an identity thief! Even providing just the last 4 digits of your number can lead to Social Security ID fraud.

Several cases have been reported to the Privacy Rights Clearinghouse Hotline where victims found their privacy accidentally invaded, opening the door for identity theft to occur:

• An ex-husband accessed his ex-wife’s credit report using her SSN five times within a two-month time frame to track her new address and place of employment. She contacted the police, the FTC and the FBI. The FBI claimed that he needed to abuse the information before they could do anything. The FTC claimed they would investigate a company but not an individual. The police claimed it wasn’t identity theft even though the access was abusive and potentially damaging.

• A loan manager called a client’s home because her account was delinquent. He revealed the woman’s personal information including banking information to a friend that happened to answer the woman’s the phone. That friend could have easily used that information to steal the woman’s identity.

• A young adult found his identity had been stolen by an employee in his apartment complex office. The employee had taken information from his file, obtained a credit card and immediately began making charges. Even though the identity theft victim discovered the crime early, he still spent many, many hours trying to find the right people to help clear up his credit, drivers license, social security number, insurance, and banking information. Would you know who to call about each of these?

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Credit Card Fraud

When most people think of identity theft they automatically think of credit card fraud. An identity thief can access your credit card information in a number of ways. They can listen in while you give your credit card information over the phone. They can call you up and ask you to verify your account information. They can send you an email that asks you to verify your account information. Sometimes you will see these as emails from a recognizable company name with a slight twist, like using “Citybank” instead of “Citibank”.

Many thieves simply dig through dumpsters looking for pre-approved credit card offers. They can fill out these offers and get an account in your name sent to their house by changing the address on the account. Setting up an account under an assumed name is one of the easiest ways identity thieves can steal someone’s identity and money.

And unfortunately, even the seemingly helpful calls you get from people who purport to represent your credit card company are often fraudulent. These callers claim they’re with MasterCard or Visa, and they try to scare you by telling you that if you don’t purchase their credit card protection services for $29.95 a month (or some such amount), you will be liable for charges thieves make on your accounts. They ask you to confirm your account and personal information and then they have your total identity.

The truth is there’s already a federal law that limits your liability for credit card fraud to $50 per card! The problem, however, is that even though your liability is only $50, you could still suffer significant damage to your credit report if the fraudulent charges have gone overdue for 30, 60, 90 or even 120 days. Even with documentation that it wasn’t you who made those charges, it can take awhile to clean up credit and some of the damage never goes away.

Most of the time, when a pre-approved application is stolen, you won’t even know that it was sent to you since a thief can intercept it and acquire credit in your name without you ever suspecting it!

As a result, you will find your credit card companies trying to sell you fraud protection against these very problems they cause. Don’t be lured into their protection plans as they are generally very limited and overpriced. For example, as we have explained, identity theft goes far beyond your credit card – into areas like your driver’s license, social security number, employment, and character.

In addition, they generally only monitor your credit report – they don’t do anything to restore your identity once it is stolen. For more information read our section on “Should I sign up for one of those credit card programs”. If you are looking for what we found to be the most comprehensive identity theft protection and restoration available, e-mail us for information or visit our recommended identity theft protection service provider.

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 Internet Identity Theft

Did you know that a lot of your information is actually available on the Internet? Public documents are even available online that contain identifying information that might harm you in the hands of a thief.

The Internet is a wonderful marketplace for buying everything under the sun…including your personal information. Believe it or not, there are chat rooms where the pirates of personal information go to sell or trade credit card numbers, social security numbers, and other personal information.

On a May, 2005 episode of the Paula Zahn show on CNN, Zahn described identity theft as a multi-billion dollar epidemic. She interviewed a woman who’d been “living identity theft for seven years now.”

How angry and frustrated would you be if you had to spend the next 7 years cleaning up your credit, clearing your name, and paying off debts some thief ran up? How would such a major loss of your time impact your job performance and life?

Zahn showed a videotape of a chat room, probably in Europe, in which thieves were quite shamelessly and brazenly swapping credit card numbers and checking account numbers for cash and for the latest versions of hacker tools. In fact, when an investigator entered the chat room, he received an instant message offering credit cards with CVV-2 (the three or four numbers above the card number), full info, and PayPal account numbers—all for sale or trade.

Guess how many other people were in that chat room? 600! 600 thieves, all swapping personal information. You have to wonder how many other chat rooms there are for those thieves. Something else to consider: if all of that is happening in public areas online, what is going on in private online areas?

You will learn more about Internet and computer ID theft in the Preventing Online/Computer Identity Theft section.

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Large Scale Corporate Identity Loss

What would you do if you heard on the news that a trusted company that you frequently do business with just announced that personal information from their customers had been stolen from their computer system by a hacker?

• In April of 2005, information publisher Reed Elsevier publicly announced that the personal information of as many as 310,000 people was unknowingly exposed to scammers on his LexisNexis databases during the previous month. Personal information that was stolen included names, addresses, Social Security numbers and driver's license numbers.

• In January of 2005, data provider ChoicePoint admitted it had mistakenly provided the personal data of 150,000 people to approximately 50 fake fronts for businesses which were actually rings of thieves.

• In February of 2005, Bank of America lost computer tapes containing information on customers in the government’s SmartPay charge card program. The number of identities affected is estimated at 1.2 million.

• In June, 2005 Citifinancial began notifying 3.9 million customers that their information had been lost – including social security numbers, addresses and payment histories.

Many large online financial institutions are hurrying to find ways to fix website flaws that put users at risk of phishing attacks. Particularly disturbing were some new phishing scenarios that could allow the hackers to steal financial date from within a bank’s website, even if the bank used SSL security features.

Unfortunately, the market that exists in consumer data represents an accident waiting to happen. Companies such as ChoicePoint make their profits by legally selling lists of people and their personal information to marketing companies. When they loose that information your identity is gone.

What happens when those packets of information fall into the wrong hands? Hundreds of thousands, even millions of people could become victims of identity theft as a result of one hacker attack or a corporate mistake. Notice again, none of us can prevent these losses of personal information. In fact, these events can make any of us a victim no matter what id theft prevention steps we have taken. In these cases the only help identity theft victims can get is identity theft restoration.

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Preventing Online/Computer Identity Theft

Since half of all identity theft occurs online, you’ll want to take a good look at some of the methods you can use to prevent your personal data from being stolen while you’re buying and selling online, sending e-mail, or even just web browsing.

Stay secure—get the upgrades
Internet security begins with making sure that you have the all the current security updates for your operating system. Windows, for instance, has a special site where you can go to check for updates, and the later versions of Windows will prompt you periodically to check for critical upgrades.

Operating system security patches are easy and free, so take advantage of them—update!

Use a firewall
The next thing you’ll want to get is a firewall. This is software that acts as a shield against hackers, worms, browser hijackers, and malicious spyware that might be directed at your computer when you’re online. Firewalls are highly-recommended tools, but when a firewall is configured wrong it can leave you exposed and vulnerable.

If you aren’t firewall-savvy, consider purchasing a firewall from a company that performs a port scan to help determine your level of risk. The company’s port scanner should be fast and include the ability to scan all 65,535 ports.

Seek out and eliminate spyware
When your browser starts to slow down and your cursor is lagging behind your mouse, you should suspect a spyware infestation. Spyware is malicious code that is inserted onto your computer without your knowledge and it collects information about you. Many marketers use it innocently to gather information about buying preferences, but thieves also use it to steal personal information.

In addition to the security risk, spyware can be annoying when it results in browser hijack attempts. This can also be a risk for children.

Often the spyware does other undesirable things to your computer besides identity theft. How would you feel if your young daughter’s browser was hijacked and it led her to a pornographic site?

Unknowingly, there are many ‘spyware prevention’ software companies that unknowingly install their own spyware on your computer when you purchase and install their computer. Be sure you obtain spyware prevention software from a reputable provider. There are many free spyware programs available online.

Pflush phishers
As we mentioned earlier, there are also many e-mail scams circulating, mostly by phishers who send you a very realistic-looking e-mail purporting to be from a large company. The best tool to use against these scams is your common sense. Phony phishing e-mails used to be easy to spot, since they resembled spam, with very poor spelling, poor grammar, and misused English words.

Unfortunately, the phishing scammers are getting much better. Many of their e-mails now have the same professional language, spelling, and grammar use you’d expect from a real company, complete with an identical logo. Phishers used to use look-alike logos that could be detected as false if you really looked, but now they just steal the company’s logo.

The FBI reports that e-mail phishing scams are the fastest-growing form of internet identity theft. What would you do if you clicked on a link you though was from a trusted source and it caused you to lose $50,000?

Evil E-mail scams
What would you do if you received a very authentic-looking e-mail from your mortgage company, advising you that your loan was about to default and telling you to click on a link immediately to clear up the matter, or to update your security information? And what if the return address was the same domain as the company’s real site?

This very scenario happened to thousands of Washington Mutual customers in 2005. The e-mails were perfectly written and they were from wamu.com, which is Washington Mutual’s domain. How did this happen? Online thieves are now able to forge DNS entries and make it appear as if e-mails came from a legitimate source. And that link they wanted people to click on went to a phony site that looked just like the real one…except for a slight difference in the url.

So if you’re tempted to respond to an urgent e-mail that seems to be from a company you do business with, don’t click on the link and don’t reply. Pick up the phone and call the company. Make sure the number you call is the one on your bill, not one in the e-mail.

Internet Fraud
In addition to the many benefits the Internet brings, it’s also fertile ground for identity theft. When you buy online, make sure that the company you’re dealing with is legitimate. And when it’s time to pay, make sure they use secure socket layers (SSL) protection for your credit card numbers.

Many online merchants offer you the convenience of setting up an account so that you won’t have to enter your credit card information for every transaction. Think long and hard before you take them up on this, since it means that they’ll be storing your credit card data. Who will have access to it? You’re not there at that company, so you won’t know.

What would you do if you bought something online, then on your next statement there were thousands of dollars in fraudulent charges? Do you have a plan?

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Dangers of Identity Theft

The dangers of identity theft are real. Congress is struggling to find an answer for how to protect identities while still preserving privacy. Identity theft laws are limited. It is up to you to educate yourself and others on identity theft prevention.

Identity theft is very expensive. It may take years and hundreds or even thousands of dollars to resolve the issues that identity theft causes. The legal costs alone can be tremendous.

• What would you do if you lost your current job because a routine credit report screen came up looking very ugly?

• What if you couldn’t get a new job for the same reason?

• What if you couldn’t buy a new home or go to school because bankruptcy had been filed in your name?

• What if your car was repossessed or your home listed for foreclosure?

• What would you do if you were arrested mistakenly for crimes that were committed under your name?

• What if you got a letter from the IRS saying you were being audited because you paid no taxes on your income, for a job you know nothing about?

• What if you were pulled over for a routine traffic stop and the officer handcuffed you, saying there was a warrant out for your arrest for drug trafficking charges?

• What would you do? Who would you call? How would you get started? What would it cost in time and money?

The dangers of identity theft are real. Thieves can harm you in an endless number of ways

• They can cause you to lose your job.

• They can acquire a job in your name.

• They can obtain telephone calling cards in your name.

• They can open bank accounts in your name.

• They can bounce checks without your knowledge.

• They may make unauthorized withdrawals from your bank accounts. (They may even drain your bank account without you realizing it).

• They can charge thousands of dollars in debts under your name and then file for bankruptcy.

• They can take out loans in your name, whether personal or business related.

• They can change the mailing address on your credit card accounts and run up bills without you realizing it.

• They can open new credit card accounts in your name, charge up bills and then fail to pay them. These delinquencies will be reported under your name on your credit report.

• They can acquire professional licensing and operate under your name.

• They can destroy your reputation and good name.

• They can prevent you or your children from attending school.

• They can cause you to lose your home.

• They can steal your life savings and something even more valuable…your time, as you struggle to set things right.

• They can file bankruptcy under your name, which can ruin your credit for 10 years.

• They can commit a crime and cause you to go to jail instead of them.

It will take you, on average, 600 frustrating hours to try to clean up the mess an identity thief causes. If you work a 40-hour week, that’s the equivalent of not working for 15 weeks, or about 3 ½ months. Meanwhile, how are you paying your bills and taking care of your family? Think about this: when can you take care of those issues? The organizations you have to work with to restore your identity are only working during normal working hours! Think your employer won’t notice your lack of productivity and reprimand you for it?

Identity theft can be extraordinarily damaging. Look at these examples:

• Phillip A. Cummings plead guilty in 2004 to stealing more than 30,000 credit histories in a two-year time frame. Cummings worked for a communications company that provided customers access to the three major credit bureaus. He obtained confidential passwords and subscriber codes. The losses resulting from his actions exceeded $11 million dollars.

• In 2003, a man using a false identity was able to obtain more than 100 credit reports using stolen names and social security numbers. Your credit report lists all of your credit cards, loans and other information.

• In September of 2004, the U.S. District Court of Eastern Michigan charged Richard Burley with conspiracy charges related to an identity theft ring that made more than $2 million in profits.

The stories go on and on. Identity thieves are easily accessing and obtaining the data necessary to steal information from ordinary citizens just like you. Identity theft is expensive. Identity theft protection is not.

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Surviving Identity Theft

Identity theft is still somewhat like the days of the wild west. No one really knows how to protect themselves. Consider this: in most instances you are allowed to get a free copy of your credit report so that you can review it for things you don’t recognize. However, to qualify for the free credit report you must PROVE YOU ARE A VICITM OF IDENTITY THEFT. How about that? To determine if someone stole your identity you must first show that they did!

Here is some important information about identity theft that you should know:

• The average time you will spend trying to resolve the effects of identity theft is more than 600 hours according to the Identity Theft Resource Center.

• Because our lives have become so tied to our identity, it now takes longer than ever before to correct problems that result from identity theft. Many victims find themselves trying to clear their name for years after an identity thief has stolen their identity.

Sure, there are steps you can—and should—take if you have reason to suspect your identity has been stolen. But they’re very time-consuming and costly. You’ll need to contact:

• Your state’s Department of Public Safety or DMV concerning your driver’s license number.

• The Social Security Administration about your SSN.

• Your employer

• Your insurance companies

• All your credit card companies

• Your bank(s)

• The credit bureaus

• The Police Department

• The FBI

• Your Lawyer

Note also, you’re only entitled to one free credit report a year. If you have already received one, you may have to pay for it this time unless you want to try to prove that your identity has been stolen without the use of the credit report.

That will bring you to another huge challenge: ever try to read a credit report? They’re not easy to decipher. There are many complex codes listed on them. Good luck trying to figure out what they all mean. Often you won’t recognize a name on it and there won’t be a number for you to call. Then what?

More than 85% of identity theft victims will suffer long-term consequences according to the Federal Trade Commission and Identity Theft Resource Center. You could find yourself struggling five years or more to clear your name. In the meantime, creditors or even lawyers will be hounding you, day in and day out, to make restitution for the money a thief stole from you.

More than 4.6 % of the population will be victims of identity theft this year alone. You may already be part of this statistic. Are you certain your identity is safe?

Another important factor in the time and financial burden of being an identity theft victim is the legal costs that are involved. Restoring your identity can take significant amount of time consulting with an attorney. Often this time is billed at $200 or more per hour. Remember how we have said that it can take up to 600 hours to clean up your identity? While most of that time will be your time (you may incorrectly consider free), much will be paid attorney time. This is why we are such fans of legal protection plans as part of our readers’ protection strategies.

How would you respond if you found out you were suddenly $100,000 in debt because a thief acquired a credit account in your name? And what if an attorney called saying you actually had to REPAY that debt?

If you are a victim of identity theft one thing is certain - you will lose a substantial amount of time, money, respect and energy trying to clear your name. Do you want to be one of the millions of people that find their lives ruined because some random person steals your identity? You must do everything you can to prepare for this.

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Why You Need To Protect Yourself

The effects of identity theft are long reaching. Many people have difficulty proving their innocence. You may have to contend with delinquent bills or bankruptcies that were filed in your name. You will probably be facing unauthorized charges. You may have lawsuits filed against you.

Unfortunately, judges and the courts aren’t very sympathetic. When they hear cases every day involving violent crimes and brutal attacks, identity theft doesn’t sound that bad. As we discussed earlier, there are very few laws about identity theft, which makes receiving any help from the legal system very unlikely.

What would you do if a judge ignored your problem? What will you do when the Police Department says “I am sorry but there is nothing we can do”. Who would you turn to? Who can clean up the mess? Think your credit card company will? Forget it. An attorney? You’d better have a lot of money; attorneys don’t come cheap.

The stress and anxiety associated with identity theft are real. As a matter of fact, many people suffer long term health consequences as a result of the stress induced by identity theft.

A woman from Berkeley, California had her name, birth date and SSN from her insurance paperwork stolen in 1999 by the receptionist at her doctor’s office. For the next three years, the thief used the woman’s name to rent an apartment, get cable, buy a cell phone, open credit card accounts and apply for other lines of credit. The imposter was able to steal more than $15,000 worth of goods.

The woman spent more than a year trying to clear her name, but there were several items she was not able to correct on her credit report.

Creditors, collection agencies and even credit reporting agencies are often unresponsive to consumer requests to clear their names, so many consumer find they aren’t able to clear their names entirely despite their best efforts.

In this particular case the woman’s credit dropped more than 100 points, and she was unable to repair it completely. The damage on her reports may stay for as many as 7-10 years.

Think you can clear up your account and just be done with it? Think again. In many cases fraudulent accounts have to be cleaned up more than 3 times due to the inadequate response from creditors and reporting agencies. There are even some cases in which victims found new accounts were opened even after a fraud alert was filed because creditors simply ignored the alerts.

Beyond the financial and time impact, many victims find themselves suffering from depression after fighting for years to clean up their credit without avail. Think about how frustrated you get when a store won’t accept a simple return or you can’t figure out how to follow some simple government process, then multiply that by 100!

While we would love to give more instructions on how to survive after your identity is stolen, it is very difficult because it involves so many factors for each individual. There is no generic solution.

The reality is everyone is either on a pre-identity theft restoration plan or a post-identity theft restoration plan. Our research tells us that post-theft identity restoration is very expensive and time consuming. We did find a reputable company that will restore your identity but the fees start at about $1,500 per incident. If you are completely stuck, frustrated, and out of time, email us and we can provide a referral.

The much smarter option is to evaluate identity theft protection options now and implement a pre-theft protection plan. Make sure the plan can help address, as much as possible, all 5 areas of identity theft we have defined in this book:

• Finance/credit,

• Employment,

• Health records/insurance,

• Social Security

• Drivers license.

We strongly recommend that you DO NOT SETTLE FOR WHAT THE CREIT CARD COMPANIES PROVIDE! Our research did not find any credit card company offerings that were comprehensive enough to justify the fee.

We conducted exhaustive research on this topic and found only one provider who meets our criteria. Their service costs about $1 per day and is very comprehensive in both monitoring and restoring your identity – including legal assistance by attorneys. Actually, there are many side benefits that this membership includes, such as will preparation, assistance with traffic tickets, contract reviews, and phone consultations with attorneys about other issues. If you are interested you can :

E-mail us for an identity theft protection referral

Or

Visit our recommended identity theft protection service provider.

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How to Tell If You Might Be a Victim

So, now you know that you are likely to be an identity theft victim at some point, even if you are careful. So how will you know? What are the signs of identity theft? The majority of victims never even realize they are victimized until it is too late. How do you know if someone is using or selling your future??

You may be a victim of identity theft if :

• You receive a phone call or letter from someone claiming that you have been denied credit for an account you never applied for.

• You receive information indicating a new account has been opened in your name without your knowledge.

• You stop receiving your credit card statements suddenly.

• You find that a collection agency is contacting you about a debt you know nothing about.

• You are denied credit or a loan despite a history of good credit.

• You are denied a job opportunity after a background check is performed.

• You are denied credit or a loan despite a history of good credit.

We have prepared an online quiz to help test your risk for identity theft. You can take it and assess your risk by clicking on our link for Online Test for Identity Theft

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Fighting Back Against Identity Theft

While ID thieves are constantly changing their techniques and creating new ways to steal and use your identity, there are certain steps you should take to protect your identity from thieves. These include:

• Order a copy of your credit report every year from each of the three national credit bureaus and checking them for inaccuracies.

• Be sure to shred all credit card receipts and bank statements.

• Have your name removed from pre-approved credit mailing lists.

• Remove your name from telemarketing lists. (Get on the no-call lists.)

• Be sure to keep your PIN number in a safe and confidential pace.

• Take care to keep your PIN number hidden when you are using it at an ATM or other public location.

• Be sure to keep your computer virus protection updated.

• Use a secure browser when ordering online.

• Never respond to emails that ask you to enter or verify your account information.

• Avoid providing personal information over the phone unless you are the person initiating the contact.

• Never carry your social security number in your wallet or purse.

• If you find you are missing a monthly bill or statement, be sure to contact the creditor immediately.

• Shred any documents that contain personal information. We recommend a cross cut paper shredder, such as Fellows brand.

• Provide your social security number in person rather than on forms at medical offices and other facilities that may require it.

• Pay attention to, and ask for, privacy policies from companies you deal with.

Identity theft is much easier to prevent than it is to clean up after the crime has already been committed. Wouldn’t you spend less than $1 per day to prevent $7,000 of monetary loss, 600 hours of your time lost, and untold damage to your reputation? It is possible (see Give Me ID Protection.)

Despite your best efforts, you may find yourself the victim of identity theft. If you do find that your identity has been stolen, you must take immediate steps to clear your name and recover any funds stolen from you.

Here is a list of steps you can take if you find your identity has been stolen:

• Call the police and file a police report with them. Note: we have heard reports that some police stations are not accepting police reports on identity theft as there is really nothing they can do about and it is unclear if it is an issue for the police, FTC, FBI, etc.

• Place a fraud alert on your credit report by notifying any one of the national credit bureaus.

• Contact your financial institution and let them know that a thief may be using your name to conduct transactions. If you find any of your accounts have been tampered, with close them immediately.

• Contact your local FBI office and file a report.

• File a complaint with the FTC.

• Contact a reputable provider of identity restoration services. Be prepared to spend several thousand dollars for this service.

At all times you should work diligently to protect your identity and those of your children. Remember that criminals can find the information they need to steal your identity relatively easily.

You should always take the time to reconcile your bank statements and credit card bills to make sure that there are no unauthorized charges.

You should also keep a list of your credit card numbers and the phone numbers of your credit agencies so you can report a card lost or stolen in the event that a theft occurs. Also, keep a copy of your Social Security card, drivers license, insurance cards, passport and any other identifying documents in a safe place, such as a home safe that is bolted to the floor.

The reality is, even if you take all of these recommended steps for preventing identity theft, you are only scratching the surface. As we pointed out, many retail, financial, health care, government and other organizations are ‘losing’ your identity details every month. Remember, the best way to prevent identity theft is to prevent it from happening in the first place.

You owe it to yourself and your family to consider identity theft protection services. If you are interested in the service our research indicates is the most comprehensive and affordable you can:

E-mail us for an identity theft protection referral

Or

Visit our recommended identity theft protection service provider.

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Should I sign up for one of those credit card programs?

You’ve probably seen the advertisements that Visa, MasterCard and Discover have that offer to protect from identity and credit card theft. You’ve probably wondered if those are worthwhile. For instance, Discover offers a program, “Identity Theft Protection”, which costs $9.99 per month.

We have listed here what such credit card “protec