Identity Theft Part 1: How does it happen?

by Joanna

My bank called me yesterday to tell me that there appeared to be “unusual activity” on my credit card and asked if I had been making purchases overseas.  I absolutely had not been!  So, just like that I was a victim of identity theft.  I’ve heard that it’s the fastest growing crime today but I still didn’t expect it to happen to me.

Ask anyone who’s been a victim; it can be an enormous inconvenience and cause a lot of stress.  According to the Federal Trade Commission, identity theft happens when somebody uses your personal identifying information without your permission, to commit fraud or other crimes.  Personal identifying information includes your name, date of birth, Social Security number, credit card number, passwords, account numbers, etc.  Here are some ways that criminals obtain this type of information.

Skimming.  They obtain your credit/debit card numbers by using a special device when processing your card.

Phishing.  To get you to reveal your personal information, they pretend to be reputable companies or financial institutions and send spam or pop-up messages.

Dumpster Diving. They search your trash for bills or other paper work with your information on it.

Changing Your Address. They fill out a change of address form to switch your billing statements to another location.

Stealing.  They steal your purse, wallet, mail, pre-approved credit card offers, new checks, tax information, or anything else with personal information on it.

Hacking.  They hack into your email or online accounts to access your information.


Common ways that thieves use your information


Credit card fraud: They open new credit card account in your name.  When they use the cards and don’t pay the bills, it appears on your credit report.  They may even change the billing address on your credit card so you no longer receive bills, and then rack up charges.  Since its being sent to a different address, it may be awhile before you realize there’s a problem.


Bank/finance fraud:
They may create checks using your name or account number.  They may open an account in your name and write bad checks or take out a loan.

Phone or utilities fraud: They may open a new phone or wireless account in your name, or rack up charges on your current account.  They may use your name to get services such as electricity, heat, or cable.

Government documents fraud: They may obtain a driver’s license issued in your name but with their picture.  They may use your Social Security number to get government benefits or file a fraudulent tax return.

Other fraud: Using your information, they may get medical services, rent a house, or get a job. They may even give your personal information to police during an arrest.  If they fail to show up for their court date, there will be a warrant out for your arrest.

As you can see, these criminals are clever and put a lot of planning into what they do.  Watch for Part 2 of this series coming soon, where I will share tips on how to avoid identity theft.  Have you ever had your personal information stolen?  How was it stolen and how did you find out about it?

Source: Federal Trade Commission.



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