By: Kristina Bolhouse CFP®
The term “identity theft” is now part of our lexicon. But what does it mean exactly? Since it covers a wide spectrum of activities, the term has become rather confusing. Identity Theft is simply defined as the use of one’s identity or personally identifying information by another person without his/her permission.
At one end of the spectrum is a stolen social security number or credit card number. At the other is the very scary type of identity theft: identity cloning. This is when someone attempts to take over another person’s identity in every possible way. Here is a small sample of other techniques:
Mail Theft – Stealing directly from mailboxes is becoming quite common. Thieves are specifically interested in pre-approved credit card applications. They typically will hit an entire neighborhood at one time. A more sophisticated method is filing a change of address form with the U.S. Postal Service to have victim’s mail re-routed to another address, usually a mailbox store.
Cell Phone Cameras – Cameras are becoming the weapon of choice with fraudsters, because of their ubiquitous presence. A common technique is where thieves standing near you in a retail establishment use their cell phones to take a picture of your credit card or signed check. This could occur while you are patiently standing in line, awaiting your turn to check out. It could also happen with that nice waitress at the new restaurant you just visited. American Express cards are most vulnerable, as the 4-digit security code is on the front of the card, making it camera ready.
Pretexting – This is where criminals pose as legitimate government officials, corporate employees or part of a legitimate business. One of the most alarming incidents I heard recently was from a fellow CPA. She went to a legitimate job fair after relocating with her husband to a new city. She liked one company in particular, and they interviewed her on the spot. They also gave her an application to fill out for a position, urging her to complete it there so they could get it back to headquarters immediately. Instead of turning in the application, she took it home with her. As she filled it out, she noticed it asked for her Social Security number and other information she thought was unusual. When she went to research the company, she found out it did not exist. She ultimately discovered the entire hiring process was a scam.
Awareness is a huge key to not falling victim to identify theft. Credit card companies do a good job of monitoring for unusual activity, but self-monitoring is even better.
Needless to say, several of us have recently signed up with LifeLock®, which is an identity protection service. While they monitor use of your Social Security number, they also have other benefits, such as eliminating pre-approved credit card offers. Unfortunately this is the world we are in now, and this is one area where an ounce of prevention may avoid a big headache in the long run.