How Identity Theft Occurs, and What You Can Do to Avoid Becoming a Victim

Identity theft is a serious and growing crime. According to the Federal Trade Commission, as many as 9 million Americans have their identities stolen each year. Identity theft occurs when someone uses your personally identifying information (PII), such as your name, Social Security number, or credit card number—without your permission—to commit fraud or other crimes.

Identity thieves may rent apartments, obtain credit cards, or establish telephone accounts in your name. You may not learn of the theft until you review your credit report or credit card statement and notice charges you didn’t make—or until you’re contacted by a debt collector. Some individuals victimized by identity theft may miss out on job opportunities or be denied loans for education, housing or cars as a result.

The most effective defense against identity theft is to understand what actions thieves may take to obtain your personal information, and what actions you can take to prevent that from happening.

Here are 14 identity theft tactics to be aware of:

1. Skimming: Thieves can steal credit and debit card numbers by using a special storage device attached to ATM machines that reads the magnetic strip on your card.
2. Phishing: By pretending to be financial institutions or companies, thieves can send spam or pop-up messages to you online to encourage you to reveal your personal information—never click on these messages.
3. Changing your address: Thieves can divert your billing statements to another location by completing a change of address form. If bills don’t arrive on time, it might mean that someone has done this and changed contact information on your accounts to hide fraudulent charges.
4. Old-fashioned stealing: Just from snatching wallets and purses, thieves can gain access to your financial accounts.
5. Pretexting: Thieves might be able to obtain your personal information directly from you, by requesting it under false pretenses (claiming to be from a financial institution or telephone company.)
6. Fishing: Believe it or not, thieves use string to lower pieces of cardboard covered with glue down blue, public mailboxes and open envelops that stick, looking for personal information they can steal.
7. Dumpster diving: Thieves will go through your trash looking for bills, credit cards and other information. So, always shred anything containing your personal information including credit card offers and “convenience checks” that you don’t use.
8. Information retrieval: Thieves can get personal information from old computer hard drives. Have your hard drive professionally erased before disposing it.
9. Victim research: Thieves access government registers, Internet search engines, and public records to gain pieces of your personal information online.
10. Remote thievery: Using radio frequency devices, thieves can read contactless or smartcard credit cards remotely.
11. Shoulder surfing: A thief can simply “eavesdrop” on transactions you make in public and pick up whatever useful information you disclose. So, try to always make financial decisions in private.
12. Computer identity theft: With the use of computer viruses and hacking, thieves can get personal information from your computer.
13. Employment scams: These scams advertise bogus job and request personal information from applicants. Never give out personal identification information without knowing whom you are dealing with.
14. Social networking: Cyberthieves regularly roam social networking sites to steal personal information that they can use to commit fraud. Always be mindful of what you post online.

Now, here are a dozen steps you can take to avoid becoming a victim:

1. Check your credit report from each of the three major credit bureaus annually.
2. Always open your credit card bills and bank statements right away. Review your statements and close unused accounts.
3. If bills don’t arrive on time, it might mean that someone has changed contact information on your accounts to hide fraudulent charges.
4. Don’t carry your Social Security card or PIN numbers in your purse or wallet, because of what can happen if they fall into the wrong hands.
5. Avoid giving any personal information over the phone, mail, or Internet unless you know who is receiving the information on the other end of the correspondence.
6. Be aware that criminals pretend to collect money for victims during natural disasters—sometimes they claim to be police officers and ask for donations.
7. Elderly people are frequently targeted in money scams. Be willing to help older family members and vulnerable neighbors.
8. Make sure that you disconnect your laptop from a broadband or a shared connection when you are not using it.
9. Avoid offers online that sound too good to be true.
10. Remove your name from mailing lists for pre-approved credit offers. Pre-approved credit card offers are a target for identity thieves who steal your mail. You can have your name removed from credit bureau marketing lists by calling toll-free 888-5OPTOUT (888-567-8688).
11. Only enter personal information on secure Web pages that encrypt your data in transit, which you can often tell if a page is secure if "https" is in the URL or if there is a padlock icon on the browser window.
12. If you use a mailbox, do so during or close to the posted pickup hours. Better yet, drop your mail off at your local post office. Retrieve mail promptly and discontinue delivery while out of town.

There are numerous websites you can visit for additional guidance, including the Federal Trade Commission at http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/about-identity-theft.html and the National Cyber Security Alliance at www.stafsafeonline.org.