It is a long established truth that frauds flourish when good people do nothing!
Since the US economy began its downturn several years ago, many of the traditional frauds have been on the increase. The numbers indicate that bankruptcy fraud, financial institution fraud, insurance fraud, securities fraud and different types of business frauds have been growing. One fraud, however, personal identity theft, has been growing over the last five to seven years directly in concert with the growth of Internet usage.
Statement of the Problem
The Federal Trade Commission (FTC) estimates that approximately 20% of all Americans will be victimized at one point in their life by some level of identity theft. Over an 18 month period, the FTC documented an almost 700% increase in calls to its hotline. Annually they have been receiving 100,000 calls to their identity theft hotline. And this is just the thefts that are officially reported. How many thefts go unreported, are yet to be discovered, or are reported to local or state law enforcement and never get plugged into these national estimates?
Identity Theft Methods
The Association of Certified Fraud Examiners (ACFE) home based in Austin, Texas is the nationally recognized private organization, which studies all types of fraud and trains investigators from the public and private sectors to detect and deter fraud. Recently, the ACFE found that over the last five years the FTC saw a 25-fold increase in Internet-related complaints. Further, Internet usage was responsible for over 25% of all FTC identity theft complaints. And, the complaints have continued to grow through the US economic downturn over the last two years.
Michigan Assistant Attorney General, High Tech Crime Unit Chief, Terrance Berg reported in 2001 that “identity theft is a double-barreled crime (using the Internet) because it defrauds a seller who sells goods or services to a person who uses a stolen identity, and also steals the credit worthiness of the person whose identity is stolen.” He further reports:
“E-commerce transactions are necessarily not face to face, thereby making it easier to assume someone else’s identity by using a credit card number or password.” Second, verifying the authenticity of ones identity is harder over the Internet than in the real world, because of the inability to check a photo ID, compare signature, or seek some other kind of authentication. Third, the growth of online purchasing has resulted in many “.com” merchants storing vast databases of credit card numbers, passwords, email addresses, and other personal information in systems that are not always secure, and have been tempting targets for hackers interested in trafficking credit card numbers. Fourth, the Internet has created a whole new array of account-based services that are used by consumers: email accounts, list serve accounts, purchasing accounts, online checking accounts, etc., than that rely on passwords for identification. Access to such passwords may mean access to a persons entire financial, medical, employment, academic, and personal history.”
How to Protect Yourself
The Federal Government through the FTC, the Federal Bureau of Investigation (FBI) and other branches, the Michigan Attorney General’s Office, the Michigan State Police, and local police are taking steps to address this growing threat to personal security. However, sadly they are only able to react after the theft has taken place. As is the case with many types of fraud, it is up to the individual and/or business to protect themselves. There are steps you can take in this regard:
Do not carry more personal information than you need. Keep unnecessary credit cards, social security identification information, PINs, codes, etc. in secure places.
With regard to Internet usage, take steps to ensure the security of any information that is transmitted relative to searches/purchases.
Shred or burn all personal information. Never casually discard any of this information in your trash.
Never use cordless phones to transmit personal information either by speaking or by using the alphanumeric pad.
Change password and PINs regularly, and be careful not to disseminate to anyone including family members. Interestingly, a significant number of thefts are committed by members of immediate family.
Destroy all mail related to credit offers.
In the event that you suspect identity theft, report details immediately to the Federal Trade Commission and the Michigan Attorney General’s Office as well as with local police. Remember, the squeaky wheel gets the grease, so stay in touch after the initial report.
Order credit reports periodically from the three major credit bureaus at least annually to verify information accuracy and also determine whether there have been inquiries from sources about which you are unaware. Report any irregularities immediately.
Finally, the ACFE publishes a list of websites that relate to identity theft. Check these out for more tips;
www.usdoj.gov/criminal/fraud/idtheft.html
www.stolen-identity.com/prevent1.html
http://consumer.usatoday.findlaw.com/money/idtheft/le7_8privacy.html
www.cfenet.com
www.clarkhoward.com/library/tips/identiy_theft.html
Bottom line
You are in the best position to protect yourself and avoid the costly time and money losses that are incurred by victims of this most personal fraud violation. Take steps to protect yourself and your businesses now!
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