What is Identity Theft?

Identity theft is when someone steals your personal information with the intention of using it to commit theft or fraud. It's a very widespread criminal activity, and recent statistics tell us that it is starting to overtake credit card fraud as the preferred way for criminals to operate on the Internet.

How does it work?

All that needs to happen is for the criminals to get hold of enough information about you - your name, address, Social Security or identity number, your bank account or credit card details, and they can then pretend to be you and run up enormous bills in your name. They can even apply for new credit cards or take out bank loans and then purchase even more in your name, leaving you to foot the bill.

It's a nightmare scenario, since often it's difficult for you to prove that you didn't make these purchases, and the financial companies who are owed the money are sometimes very unsympathetic. You could even end up in court. It's an extremely disruptive and stressful situation to be in and it can sometimes take years to get your life back to normal.

So how do the baddies do it?

Anyone who has access to enough of your personal information to be able to apply for a loan or a credit card can steal your identity. If they have access to physical media or documentation, such as an identity document or card or a credit card, they can clone the information and produce duplicates very quickly. Be wary of letting your credit card out of your sight, in a restaurant or other retail outlet, as an unscrupulous cashier can swipe your card through a "cloning" machine in seconds and record details such as the authorization number at the same time.

Another "low-tech" way of getting information about you is to steal your wallet or purse. It's not that difficult to do, as most of us are pretty careless about safeguarding them in public. Guys, do you carry your wallet in your pants hip pocket? Ladies, is your purse in your handbag and do you put it in a trolley while grocery shopping? An accomplished thief will tell you that these are the worst places to keep your valuables. And take a look at what's in your wallet or purse and see how much information is in them that a thief could use to pretend to be you. That's scary, isn't it? And we haven't even looked at online methods yet.

There's no way of completely protecting yourself, but there are ways of minimizing your exposure to this kind of Identity theft.

There are people who have legitimate reasons for asking for information about you - doctors, employers, your bank etc. But before you supply the information, make sure you know why they want it and to what use they will put it. Never give out personal information to people or companies you don't know. You may be contacted by someone who claims that their company has lost your credit card details, or that they need your banking information and access codes for their files. Don't, under any circumstances, reveal information like this on a telephone call, or in an email. Reputable companies do not operate in this fashion.

Keep an eye on your mail and pick it up regularly. Criminals can learn a great deal from items in your mailbox, such as utility bills, credit card bills, financial institution communications and so on. If a bill is late, it could be that a baddie has requested it to be diverted to another address and is now in the process of gathering enough information about you to be able to assume your identity and run up some very big bills in your name.

Don't carry all your credit cards with you all the time, especially not the ones with the large limits. Leave your platinum card at home if you're doing the grocery shopping. That way, if your card gets stolen, you can limit the damage.

What about Online scams?

Scams and identity theft over the Internet are one of the fastest growing menaces to hit society. Some of the things to look out for include:

  • Phishing scams. Wikipedia defines Phishing as "the criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication". So watch out for messages which ask you to email any secure details to a destination purporting to be your bank, credit card company or other supposedly trustworthy recipient. As we said before, reputable companies don't operate like that.
  • Be careful when purchasing goods online. If the Merchant doesn't give a way of contacting them offline so you can verify their validity - beware. Also remember the maxim that if something looks too good to be true, it probably isn't. Be wary of goods which are advertised at extreme bargain prices. It may just be a way of gathering information about you.
  • Social Networking sites, such as Facebook or MySpace are treasure troves of personal information. For criminals. Be careful how much you reveal about yourself on these kinds of sites. Similarly, discussion forums can be manipulated by unscrupulous characters and participants can be encouraged to post potentially damaging information on them.
  • If you visit adult sites and/or hacking/cracking sites of any kind, be warned that any information which you give them may end up in the wrong hands and could compromise your identity.
  • Use good, strong passwords which are not obviously connected to your life, such as your spouse's name, kids names or pets names. Use a mixture of letters, numbers and special characters, and don't store the passwords on your computer - especially not in a folder named "passwords".
  • Use good anti-virus, anti-spyware and personal firewall software from reputable suppliers and keep them up to date.

It doesn't cost a lot to provide yourself with good protection, and it's worth it to enable you to sleep well at night, knowing you've shielded yourself against the people who want to steal your name.