Most people think it has something to do with bank accounts, credit cards and fraudulent purchases. They are indeed correct, but only partially. There are several forms that identity theft can take:
Theft of Character – This is where a person steals someone’s social security number, driver’s license number or commits a crime in a victim’s name. Some of the things that can happen include receiving a DUI, traffic tickets, filing false tax returns, opening new bank accounts, or gaining employment in a victim’s name.
Theft of Medical Benefits – Occurs when a victim’s health insurance identification or social security number is used to get health care. This form of identity theft can have life threatening ramifications if misinformation is included in a victim’s health records. Think about a comatose auto accident victim arriving at the local ER. Computer records say that the victim is a diabetic but has no documented drug allergies. But the victim is really not a diabetic but has an allergy to penicillin.
Theft of Financial Information/Identity Fraud - This is probably the most recognized form of the crime.
This theft occurs when a thief uses a victim’s information for illicit gain. Thieves obtain credit cards, loans, purchase merchandise, vehicles, and even homes posing as someone else. This type of misuse of information is termed identity fraud.
Synthetic Identity Theft – This happens when different pieces of personally identifiable information, typically a real person’s social security number are joined with a different name to create a new person. This crime can be financial in nature, but also can impact a victim in other ways.
For example, a friend of mine couldn’t figure out why every time he went to apply for a job he was being turned down. He ultimately found out he had “a record” with several criminal convictions. His social security number was used each time the other person was arrested.
Business/Commercial Identity Theft –Criminals can establish new credit cards or accounts with a business' name or even make fraudulent purchases in the name of the business. Businesses normally don’t become aware of the activity until they are billed on these accounts. Business owners and executives, employees of the business, and business clients can all be victims or suffer losses, directly or indirectly.
For a small business, this can be devastating to both the business and the owner. Small businesses can be especially vulnerable to this form of crime because the business’ credit and the business owner’s credit are very often one and the same. The business owner may personally guarantee a business loan or line of credit, or may use his or her own personal credit accounts directly to finance the business.
During a recent speaking engagement, I met a gentleman who was victimized in that fashion. Hearing of
my topic, he told me about a current case he was embroiled in. Someone had taken his social security number and opened a business in another state. The only reason he found out was when the thief walked away from the business, and this gentleman was left with $150,000 in debt and a big legal battle on his hands.
At this point you may feel, “I’m pretty safe. I leave my extra credit cards at home; I don’t carry a social security card around with me; I have a firewall on my network, we run background checks on all our new hires…” But think about it. If you’ve purchased a car, bought a home, gone to a doctor’s office, served in the military, applied for a loan or insurance, how many thousands of databases have
you been entered into? How about all those great supermarket key tags: just swipe it and we’ll give you $2 off a gallon of ice cream. Sounds funny, but that purchasing data is associated with you, and who has it?
Face it, our information is irrevocably and irretrievably out in the real world, and it’s vastly outof our control!
According to statistics from the Federal Trade Commission, identity theft results in approximately $50 billion dollars in annual business losses, affects about 10 million victims per year, and results in out-of-pocket expenses for victims of roughly $5 billion dollars each year. This doesn’t even include the incredible investment of personal time to restore their identities, which the FTC estimates could be as high as 500 hours per theft.
As a result of the implementation of many data privacy, security, and identity theft laws, people and businesses have become more aware of identity theft in general. But people don’t fully realize the damage it can cause a victim and their family, or how it devastates a business if it suffers a loss of data, or if its employees become victims. In addition to potential fines, lawsuits, and even worse, permanent reputation damage, there is also the possible responsibility on the consumer’s and/or business’s part for fraudulent losses to employees and other victims. The physical and emotional toll it can take on the victim is outlined in this Wall Street Journal article at http://online.wsj.com/article/SB121807447764219305.html
There are many simple steps a consumer can take to minimize the risk to the information in their possession such as:
* Remove social security number from driver’s License and wallet.
* Don’t leave your car unlocked in a driveway or parking lot (there’s a lot of information about you in the glove compartment).
* Don’t put mail in a basket on the office receptionist’s front desk or a home mailbox, take it to the Post Office.
* Don’t share a computer. If you do, have separate logons and passwords.
Most consumers are rather naïve about the threat and potential damage of being victimized. Many business owners simply take a wait and see approach to implementing some kind of identity theft program within their organizations. But it can be a win-win situation for the employer, employees and customers to add an identity theft preventive plan. It can save dollars to the bottom line if it avoids an employee taking time off to fix the problem, and it can have risk mitigation benefits for
the company to offer a benefit should employees become victims as a result of an internal breach.
Simply put, (and yes, the old adage is still true) an ounce of prevention is worth a pound of cure. Beyond this, the benefits of offering employee education about identity theft and the potential risks to both the employees and the business can deter someone on the inside by letting a potential thief know that the company takes the personal information of its employees, customers and business entity seriously.
As the growth of the crime has skyrocketed, so have the potential offerings available for consumers. But there are many things one needs to look for when selecting one of the products. Some key features to look for in an identity theft protection program are: does it provide credit monitoring, restoration of a victim’s identity as well as access to legal services? Does it cover minor children?
Does it prevent problems or merely clean up after the fact? Is it affordable in light of the risks and potential damages faced? Is it updated as the law changes? Does it identify new threats as criminals adapt to law enforcement efforts?
Even though the Internet receives a bulk of the blame, and crime through this mechanism is indeed growing, it is not the only area of activity. It happens in businesses, in your own home, at your kid’s college campus, over the telephone during a simple “survey”. Does this mean we should stop the use of the Internet, social media, cell phones and wireless devices? No. But it does mean that every
consumer needs to be responsible for things like online activity, not ignoring privacy policies, Tweeting and posting on Facebook properly, and appropriately forwarding and responding to emails.
The crime is not going to “go away” and is only expected to get worse. It is the number one crime world-wide. And the single best thing we can do is raise consumer and business awareness.
Some of our recommendations include
* Take the issue seriously.
* Put appropriate company plans in place.
* Offer an identity theft program (and awareness training) as part of your employee benefits package.
* Encourage people to implement simple personal safety measures.
NCR Credit Plus 866 469 6599
Credit repair can save consumers hundreds of dollars every month in interest payments. That’s because lenders of all types, whether they’re passing out home, auto, business or personal loans, rely on credit scores to determine the interest rates they charge borrowers. Borrowers with high credit scores qualify for the best interest rates. And today, these top rates are truly impressive – throughout much of the second half of 2009, interest rates on 30-year fixed-rate mortgage loans had fallen under 5 percent, a historic event. But borrowers with bad credit scores won’t qualify for these rates, and that’s a distinction that can cost these borrowers a significant amount of money every year.
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