What you can do to combat identity theft

By Insure.com
"But he that filches from me my good name/Robs me of that which not enriches him/And makes me poor indeed." (William Shakespeare, Othello, act iii, Sc. 3)

Shakespeare evidently knew a thing or too about the meaning of identity theft ... and so should you. Identity theft occurs when a crook wrongfully gets and uses another person's personal information, using some method of fraud or deception, usually for economic gain at the victim's expense.

An identity thief seeks personal data such as your social security number, your mother's maiden name, bank account information, credit card info or a telephone calling card. Identity thieves have been known to use someone else's personal data to - among other things -- deplete someone else's bank account, run up thousands of dollars in charges on a victim's credit cards, and/or obtain a home loan. Identity theft victims could spend several thousand dollars and take years to restore their reputations and good credit standings.

New York accountancy firm BDO Seidman is among those that consider identity theft to be the fastest growing financial crime in America today with annual losses estimated at $2 billion a year. Identity fraud crime "has reached epidemic proportions," asserted Carl Pergola, national director of fraud investigation services at BDO Seidman in New York.

"With electronic access to data and gangs focused on committing this fraud," Pergola continued, "it's like giving (thieves) the keys to the vault. Maybe this will press companies to put more controls in place."

CBS News claims that criminals illicitly obtain someone else's identity every 79 seconds. The Federal Trade Commission reports that each year, more than 85,000 people become identity fraud victims.

Identity thieves use various techniques to come up with a potential victim's personal data. For example, identity thieves have been known to rummage through garbage cans (also known as "dumpster diving"); walk off with personal or business records at work; steal mail, wallets/purses; or pose as a landlord or employer to obtain credit reports.

Federal investigators recently uncovered the largest known identity theft ring, allegedly involving three male suspects in New York who illegally accessed personal credit data electronically. They've been accused of victimizing more than 30,000 consumers and causing millions of dollars in losses.

Fortunately, insurance industry experts such as Joanne Salvatore and Mary Ann Avnet offer consumers ideas on preventing and combating identity thievery.

"If you're vigilant, you can prevent identity theft in many instances," said Salvatore, vice president of consumer affairs for the Insurance Information Institute (III), in New York. Salvatore called on consumers to "protect all of your personal information, social security number, bank account numbers, that sort of thing. You can help achieve that by ensuring you don't give access to them unless you want them to have it for purposes of you making a transaction that you want such as buying a birthday or Christmas gift at store or placing a purchase order on-line."

What if you're not sure what to do if asked for your personal information? "If you have concerns about the merits of giving out your personal information, don't do it," replied Salvatore. "Don't leave bank deposit slips for someone else to pick up. Put them in a secure place immediately, lest they fall into the wrong hands."

If you can't prevent identity theft, maybe the next best thing might be to catch the culprit early-on. "If you are a victim of identity theft, be sure to report the crime immediately to the appropriate parties," said Salvatore. "Your first call should be to the bank or the credit card company or whatever agency that is affected by the questionable transaction. Make sure they stop any further unwanted transactions on that account. Then, file reports with the local police department and the Federal Trade Commission."

Chubb Insurance Co. Vice President Mary Ann Avnet urges consumers to request credit reports at least twice a year and more regularly if they've been victimized by identity thieves. Consumers can require the use of identification whenever their credit cards are used, according to Avnet.

Avnet advised consumers to safeguard items containing their driver's license, Social Security numbers and credit card numbers. "Be as careful with that information as you can. When choosing PIN numbers and ID numbers, make sure they are not easily replicated," Avnet added.

A Bloomington, Ill. businessman Dick Luedke talks about steps he takes to prevent he and his family from being victimized by identity thieves. For example, Luedke says that he does more than toss away unsolicited mail containing personal information. "I open the mail for my family, and I tear up credit card receipts and credit card applications into numerous pieces before disposing of them."

Luedke's thinking on the subject? "By doing that," Luedke answers, "unscrupulous individuals who might sift through my garbage won't pick up any of my family's personal information such as social security numbers."

You can arrange identity theft insurance coverage. Such insurance protection would reimburse you for costs of restoring your identity and repairing personal credit reports. Certain insurance companies include identity theft protection in their homeowners insurance policies. Other carriers market coverage as an endorsement to homeowners or renters insurance policies or sell that protection as a stand-alone policy.

American International Group (AIG), Chubb, Travelers and Farmers are among the insurers that have been known to sell identity theft coverage.


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