The frightening truth about identity theft.

Let me paint you a picture.  You’re sitting at Starbucks and pull up your laptop and log in with their Wi-Fi to check email.  BOOM!  Your bank account information was just stolen.

Or you get a few credit card offers and other junk mail you don’t want so you rip it in half and throw it in the trash.  POW!  Someone just took out 5 credit cards in your name and maxed them.

Even scarier, you just go to your local store and buy a pair of jeans.  SHAZAM!  Just by that act, they record sensitive financial information in their database – your name, address, credit card numbers, and anything else they can gather, which is easy pickings for hackers. 

In fact, identity theft and crimes of financial and data theft are more prevalent than ever in the United States, where approximately 15 million people have their identities used fraudulently each year.  The bill on that theft is upwards of $50 billion dollars every year.  That’s three times more than the combined $14 billion in losses from all other types of consumer theft (burglary, motor vehicle theft, property theft, etc.) combined.  It takes a lot of time and often money to clear up the mess identity thieves leave behind.  Their credit report and score will be compromised, which can set off a domino effect of raising interest rates and even insurance premiums.  Debt collectors start calling and sending mail, or even taking them to court.  Some people get lucky and they’re able to clear their good name in a few weeks, but for others it becomes a nightmare that lasts years.

Just last year, more than 16 million people saw their identities compromised or stolen, which equals an astounding 7% of all adults in the U.S.A.  The financial toll to those people is high.  On average, each identity theft victim suffers direct losses of $9,650, up from just $3,500 a few years ago. 

Of course we have to be careful of where we log in, how we store and use our passwords and financial information, and even how we discard our mail, but what’s truly frightening is that we put ourselves at risk just by being consumers.  Stores and businesses are in the practice of data mining, or collecting every shred of information on their customers and the public, used for marketing purposes and to anticipate and control buying behaviors.  And we’re not even talking about governmental databases yet.  But these massive databases of your information are rich targets for hackers and thieves from all over the world.  About 100 million Americans have their personal information put at risk of identity theft each year from government or corporate databases. 

Unfortunately, the bad guys are pretty smart and technologically savvy these days Identity thieves used to dumpster dive for your mail, but now they have elaborate phishing and vishing computer scams.   They used to pickpocket your wallet, now they set up elaborate networks of botnets and malware that hijack your computer without being detected.  They used to set up phony call centers, now they hack right into those corporate and government databases that hold hundreds of millions of consumers’ personal and financial information. 

These days, they’re not just after your credit cards and bank accounts – identity theft has expanded to fraud involving cell phone service, cable TV, your power, gas, and water utilities, internet payment services, mortgages, medical insurance, auto financing, and government benefits.  There’s even a growing trend of thieves using your identity to obtain employment (and then stealing from the inside,) and evading arrest using your identity as a cover. 

So the big question is: who is there to protect you?  If you’re counting on bank and corporate protocols to keep your data secure, you might be sadly disappointed.  Only about 45% of data theft was discovered by financial institutions, who notified their compromised consumers.  If their information was used to open new, fraudulent accounts, the financial institution sounded the alarm only 15% of the time.   21% of victims were alerted to the malfeasance when an outside company or agency reach out, and 13% found out when they received unpaid bills in the mail.  

Once identity theft occurs, it’s difficult to trace the source of the leak.  Only 32% of identity theft victims ever find out how and where their information was stolen. 

What can consumers do to protect themselves? 

They should check their own credit reports at least three times a year, when consumers are entitled to free annual copies of their credit reports from the three major credit bureaus: Equifax, Experian and TransUnion.

They should use secure wifi when pulling up sensitive information online, use online security measures and strong passwords.

Shredding mail before you throw it away, and verify every email and phone call before you offering any information. 

But the best way to protect yourself is to use a great credit report monitoring and protection service, like those offered by Blue Water Credit.