Last week’s staggering headline that, Russian hackers stole over 1 billion internet passwords, is yet another example of how global the business of identity theft has become. A breach of this size should be enough to convince anyone about the importance of practicing good cyber security.
“The good news about identity theft, from a victim’s point of view, is that you are not liable for theft,” notes Willis’s North American Practice Leader for Technology, Media, & Telecom (and fellow blogger) Tom Srail. “A creditor cannot make you pay for something that a criminal purchased using your name. The bad news is, you need to clean up the mess, and that can be a real aggravation.”
7% of Adults Were Victims of Identity Theft in One Year
For many in the US, dealing with the headache of identity theft could become a very real thing. Identity theft is one of the fastest growing crimes in the US, according to the US Postal Inspector Service. Statistics from the Department of Justice show that 7% of all U.S. residents age 16 or older, were victims of one or more incidents of identity theft just in 2012. Recently, The Federal Trade Commission released data from 2013, showing identity theft is now the number one complaint of consumers.
The amount of data stolen online is truly staggering. The Identity Theft Resource Center has a tally running since 2005, which shows 4,579 data breaches with 630,870,450 records exposed. Unfortunately, the rate of identity theft continues to rise in 2014. As of the end of June, the ITRC has seen data breaches increase 19.1% over the same time last year.
How Identity Theft Occurs
Identity theft takes place a number of ways. Online identity theft methods often make the biggest headlines due to the significant amount of information stolen, but other methods are used as well. Thieves look through trashcans; steal mail from mailboxes or pose as bank or government agents on the phone. Even the most vigilant person can have a difficult time protecting themselves from all these different frauds.
Signs of Identity Theft
With the incidents of identity theft continually on the rise, it is important to know some of the signs that your data has been compromised and your identity stolen. Following are some examples from the FTC Consumer website that your identity may have been stolen.
- You receive notice that your information was compromised by a data breach at a company where you do business or have an account.
- Withdrawals from your bank account that you cannot explain.
- You are not receiving your bills or other mail.
- Merchants refuse your checks.
- Debt collectors call you about debts that are not yours.
- You find unfamiliar accounts or charges on your credit report.
- Medical providers bill you for services you did not use.
- The IRS notifies you that more than one tax return was filed in your name
Tips for Preventing Identity Theft
There are ways to make it more difficult for others to steal your identity. TransUnion recommends the below prevention tips. A complete list is available on the TransUnion website.
- Be careful when giving out personal information
- Shred sensitive documents like receipts, credit card offers, and bank statements before you throw them away.
- Protect Your Social Security number.
- Stay on top of your credit.
- Create passwords or PIN numbers out of a random mix of letters and numbers.
We asked Tom for some thoughts on preventing identity theft and he said, “Nothing can eliminate the risk of identity theft, but with proper planning and vigilance, you can significantly reduce your risk. Some top tips: Close unused accounts, monitor your banking frequently, USE DIFFERENT PASSWORDS for each account/PIN and change them regularly, and lock/freeze your credit bureau reports.”
If Your Identity is Stolen
Even the most vigilant can fall victim to identity theft. If your identity is compromised, first report your findings to your financial institutions and then to your local police department. Additionally, you should contact one of the national credit reporting companies and request that they flag your account with a fraud alert. You should also consider the resources posted on the FTC’s Identity Theft page, which includes Sample Letters and Forms for Victims of Identity Theft.
The cost of the recovery process, after identity theft, can be substantial and quite frustrating. An identity theft insurance policy can provide some assistance in reclaiming your financial identity. The policy coverage can vary by provider but most offer protection from a variety of circumstances, including fraud committed in your name. Consult your personal insurance representative to determine what, if any, coverage you currently have through your existing homeowners policy or other policies.