The fastest growing financial crime in America today without question is identity theft. In their most recently yearly study, Javelin Strategy and Research Center estimated that almost 10 million people were victims of identity theft in 2008, a 22% increase over 2007.
So how can you protect yourself? The first step in avoiding this unsettling crime is to gain an understanding of identity theft. But it is also very important to put protective measures in place, just in case you become a victim.
When an individual wrongfully acquires another person’s private information, and fraudulently uses the information for economic gain at the victim’s expense, a case of identity theft occurs. An identity thief searches for personal data such as bank account information, social security numbers, or credit card data. The thief uses the information to deplete bank accounts, obtain bank loans, or make thousands of dollars of charges on a victim’s credit card. The result can be that victims are left with significant debt, blemished reputations, and scarred credit histories for many years to come.
To avoid this pain, first and foremost use good common sense. Guard all of your personal information, including bank and credit card account numbers and your social security number. Never leave bank deposit tickets lying around for someone else to find. Shred credit card receipts and applications before throwing them away. Protect your driver’s license, and don’t make obvious choices when setting up account PINs and ID numbers.
As an added safeguard, you may want to consider the possibility of setting up identity theft insurance coverage. If you do become a victim of this insidious crime, this coverage reimburses you for costs incurred to restore your identity and repair your personal credit report. Evaluate your homeowner’s insurance policy, as some insurance companies include identity theft protection in your policy. Other insurance companies sell identity theft coverage as an endorsement to homeowner’s or renter’s insurance policies, or may even market the protection as a stand-alone policy.
If you do become a victim of identity theft, call the bank, credit card company, or agency that is affected by the questionable transaction as soon as possible. Make certain they are aware of exactly what is going on, and that they have taken steps to prevent any further unwanted transactions. Finally, report the crime to the appropriate authorities, and file a report with the local police department and the Federal Trade Commission. A copy of the police report will be necessary to file the claim under your insurance policy for both reimbursement of funds and credit repair.