Fraudsters will use stolen information to obtain a credit card, rent an apartment, purchase goods online, and even withdraw money from a bank account, and sadly, you won't find out about the crime until it's too late. The worst part is that identity theft victims are left to clean up the mess alone, which can sometimes take months, even years depending on the damage.
How did they get my information?
There are plenty of sites (including this one) that frequently warn the public against the different types of phishing scams. Clever thieves will stop at nothing to get account information electronically, or physically by stealing a victim's mail. But sometimes, no matter what you do to protect yourself, the reality is the integrity of your identity relies on the security measures taken by merchants you deal with.
Sophisticated identity theft rings aren't wasting their time with petty phishing scams, they're going after the big guys. Their targets are now retailers, banks, schools, government agencies, and other companies with data banks that host millions of credit card and debit card numbers, as well as identity records. How scammers acquire this information varies, but we've all heard of the occasional missing laptop or retail hack job that compromised millions of account numbers.
What's infuriating, as Bob Sullivan points out, is that card associations like Visa and MasterCard are the first to notice when a large block of account numbers are stolen, yet for whatever reason, they won't reveal the name of the compromised retailer to banks or the public immediately. This means it may take months before a victim realizes their account information has been stolen, which gives identity thieves plenty of time to do more damage.
Fed up with the lack of identity theft reporting by lending institutions, Chris Hoofnagle, a researcher at the University of California at Berkeley, conducted a study that reveals which institutions had the most identity theft incidents. After analyzing over 88,000 complaints submitted to the FTC over a three month period, Hoofnagle found that Bank of America, AT&T, and Sprint had the highest number of identity theft complaints, while Macy's Comcast, and DirectTV had the least number of incidents. He admits the study is not perfect, but it's a good first attempt at getting lenders to disclose more information that would help consumers choose safer institutions.
What can I do to protect myself?
Research like Hoofnagle's could greatly benefit consumers, because it would give us a better idea of who to deal with in the future. Until then, I recommend you take a few safety measures of your own to protect your identity. Here are a few tips:
Buy a shredder, and shred any junk mail that has your name on it before you throw it away. Keep a lock on your mailbox if you can, or get a P.O. box. You might also want to take your name off any junk mailing list.
The best thing to do is to monitor you bank and credit card transactions regularly. Some banks offer daily alerts that notify you every time a transaction was made over a certain dollar amount.
Request a copy of your credit report semi-annually or annually if you can.
It's important for all victims of identity theft to report any discrepancies immediately after they happen to minimize the damage.
Always use your home computer when conducting online transactions.
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