How Thieves Work, and How to Stop Them
Identity theft comes about in a variety of ways. The common ingredient to all cases is the fact that a thief gets a hold of your personal identifying information. Once they have that, they're ready to strike. They may sit on your information for a while, waiting for you to drop your guard, and waiting for any short-term fraud alerts to expire. Once they have your information, they can use it for many years to come.
Personal information that can be used for identity theft is all over the place. Although you are not an aspiring criminal, you should know how they operate so that you can protect yourself. Identity thieves have several tricks of the trade that they use to get the information needed for identity theft.
Dumpster Diving
A common way to get valuable personal information is a practice known as dumpster diving. As the name suggests, dumpster diving involves digging through dumpsters with the goal of finding discarded papers that contain important information. Unlike scuba diving, you don't have to travel to exotic places to be a dumpster diver. Major cities are full of them. A good dumpster diver can easily hit a hundred dumpsters in one day. If just a small percentage of consumers are careless enough to throw away important documents, the dumpster diver has a good day.
If you live in the suburbs, don't necessarily assume that you are safe. Dumpster divers might operate at a bank, doctor's office, or other institution with which you do business. Furthermore, dumpster divers can operate out of landfills and recycling facilities. It may not even be your fault — an employee may throw out a document with your information on it, and put you at risk.
To protect yourself from dumpster-diving identity thieves, you have to make sure that there is nothing there for them to find. The easiest way to do this is to shred any documents that have important personal information in them. If you don't already have one, buy yourself a cross-cut paper shredder. When in doubt about anything, shred it. If they can't read it, they cannot use it against you.
It is difficult to ensure that others who have your personal information are protecting it. Banks and other institutions can slip up, and all the shredding you've been doing might be for naught. Ask them if they have policies and procedures for protecting customer information. If they do not, consider working with somebody else.
Computer Hacking
An increasingly common form of identity theft is a result of computer hacking. Thieves might gain access to your computer, or the computers of a company that you do business with. Once they are in, they can download anything they want. If the computer happens to belong to an organization, the personal information of hundreds, thousands, or even millions of consumers may be at risk. Computer hacking is the preferred method of obtaining valuable information. As you might imagine, it is much more glamorous than dumpster diving, and the working conditions are better. When computer hackers are most successful, they get information on a large number of potential victims. This increases the likelihood that they can find somebody who has assets and good credit.
Be sure to keep all of your computer software up to date in order to keep your personal information safe. Hackers and computer experts constantly discover vulnerabilities in popularly used software. Software manufacturers often provide free security updates to fix the vulnerabilities. If you don't update your software, you make it very easy on the hackers.
To protect yourself against computer hackers, you need to protect your computer. The easiest thing you can do is have a good antivirus program and keep it up to date. You should also check to see if a firewall will do you any good. Follow some commonsense computing rules: don't open attachments from unknown senders, avoid visiting Web sites that you don't need to visit, and keep all of your software up to date.
There are a lot of free software programs out there that help you protect your information. Search around consumer-privacy Web sites, and you will find some good ideas. You might start with the Gibson Research Corporation (
Old computers can also be a gold mine for identity thieves. Since computers constantly improve, you may buy a new one every few years. What happens to that old computer? If you donate it, sell it, or give it away, you need to be sure that any sensitive information is permanently deleted. Even if you delete everything, the data may still be on your computer's hard drive. To permanently wipe the data out, you should use a specialized software program designed for this purpose. As an alternative, you could reformat your hard drive before getting rid of the computer.
Going Phishing
Another easy way to get information for identity theft is to use a tactic called phishing. Scammers contact you and claim to be employees of a reputable institution. They often use the names of banks and credit card companies with this strategy. For example, you may get an e-mail from somebody who claims to be an employee (or automated system) at Bank of America. The e-mail might say that they have had technical difficulties, or that something strange is going on with your account. Then, they ask you to verify your identity by sending all of your personal details: your full name, date of birth, Social Security Number, and so on. Of course, you divulge this information to an identity thief, not the bank. Much like computer hacking, phishing is fairly easy. Scammers can send thousands of e-mails just as easily as they can send one. Much like real fishing, they throw their bait out and see if anybody will bite.
Identity thieves can use computer-hacking techniques to get your information. However, it is probably still much safer to do things online (such as pay bills with an online bill-pay service) as opposed to the old-fashioned way. Most transactions and computer systems are secure. However, systems that aren't secure make it really easy for the scammers.
To protect yourself from this type of scam, be extremely cautious about whom you talk to. If somebody calls you or e-mails you asking for sensitive information, be suspicious. If the request comes via e-mail, there's a 99.9-percent chance that it's a phishing scam. Most organizations will never call you or e-mail you and ask for personal details. If it ever happens, you can simply state that you'd like to call them back just to be safe. Then, call a number that you know is a legitimate phone number to that organization — don't call a phone number given to you by the person requesting your information.
An Inside Job
Most of the methods described previously are fairly anonymous and involve thieves who have no idea who the victim is. Having your identity stolen by an unknown criminal is somewhat random, but it happens all of the time. Unfortunately, some victims of identity theft have a connection with the thief. Sometimes there is a close personal connection, and sometimes it's a business relationship.
Occasionally, you see a high-publicity case where an employee sells the information about his customers. A person at a bank or credit card company can easily get a hold of the personal details of a large number of consumers. If the employee is part of the wrong crowd, he may sell that information to somebody who plans to use it for identity theft. Unfortunately, one bad apple can do some serious damage to a bank's PR.
In order to access your credit report, some thieves pretend to have a permissible purpose for obtaining your credit information. They may pose as a landlord, potential employer, or financial institution as they request your reports. Once they have succeeded, they know about most of your accounts, they know your current and previous addresses, and they are ready to strike.
Sometimes the connection is even closer; family members have been known to steal each other's identity. It may be a troubled youth, or somebody in a tough financial situation. Either way, the victim feels especially violated in these cases. When the identity thief lives with the victim, it is more difficult to uncover the crime. The thief can easily intercept mail and cover his tracks.
It is difficult to prevent a dishonest insider from doing bad things. As a consumer, you are largely at the mercy of organizations that you deal with. The greatest power you have is the power to take your business elsewhere. If you suspect (or know) that an organization is not protecting your valuable information, go somewhere else. Unfortunately, they may already have information about you in their databases — the fact that your account is closed does not mean that your personal details have been deleted.
Stolen Property
Identity theft also happens when valuable items are stolen or lost. Your purse or wallet may have all kinds of useful information for an identity thief. Your Social Security Number, birthday, address, and account numbers fall right into an identity thief's hands. Likewise, the thief may steal a laptop or computer hard drive that contains sensitive personal information about a group of people. Traveling salespeople, human-resource specialists, and consultants all have important information on their computers.
Skimming
There are an unlimited number of ways that identity thieves operate. Most of the methods above involve impersonating a victim, and using their accounts. However, some thieves use a much simpler form of identity theft. All they need is a credit card number, and something to buy. They can get your credit card number in all the ways listed above. In addition, there are countless other creative ways to get valuable information. For example, the technique known as skimming allows criminals to capture your credit card number as you make purchases. There might be a hidden device attached to the machine, or the thief might have a small portable device he can use while he has your card.
