The Dangers of Identity Theft
Sharae Ernst
IFSM 201 – Summer 2012
8/3/2012

“Identity theft occurs when someone uses your personally identifying information (PII), like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes.” (Fighting Back Against Identity Theft: Federal Trade Commission). According to the Federal Trade Commission, identity theft complaints have decreased since year 2008 (314,521 to 250,854). It is estimated by the FTC that as many as 9 million Americans have their identities stolen each year. As information technology progresses along with society, there is always an increased risk of having one’s identity stolen. “Identity theft was the number one complaint category in the CSN for calendar year 2010 with 19% of the overall complaints, followed by Debt Collection (11%); Internet Services (5%); Prizes, Sweepstakes and Lotteries (5%); Shop-at-Home and Catalog Sales (4%); Imposter Scams (4%); Internet Auction (4%); Foreign Money Offers and Counterfeit Check Scams (3%); Telephone and Mobile Services (3%); and Credit Cards (2%).” (Consumer Sentinel Network Data Book: For January - December 2010, 2011).

Although the numbers have slightly decreased, overall, identity theft is on the rise. “According to a February 2012 Javelin Study, identity theft rose 13% from 2010 to 2011. More than 11.6 million adults became a victim of identity theft in the United States during 2011.” (Coping with Identity Theft: Reducing the Risk of Fraud, 2012).

How do perpetrators steal the identities of unsuspecting victims? It is unfortunately simple, and there are several ways to do so: “Dumpster Diving”: which involves sifting through the trash of potential victims to search for any material that contains personal information; mail theft: which is illegal, but does not stop thieves from stealing mail; telephone solicitation: pretending to represent a bank or credit card company. This method is also used via the Internet, called phishing and spoofing; skimming: stealing credit and debit card numbers by using a special storage device when processing cards; old-fashioned stealing: as in, stealing a purse or wallet that would most likely contain all the information a thief would need for a successful identity theft. Information technology has made it easier for thieves to collect PII through breaches of security (internet and network).

There are several types of identity theft: financial, medical, child, social security, social networking, and smart phone security, to name a few. Financial identity theft is the most common type, which deals with credit reports and bank accounts. Medical identity theft is the most dangerous form and one of the hardest to fix. Child identity theft has become a serious concern recently, and it is usually a friend or family member that commits this type of theft. Social security identity theft is the theft of one’s social security number. Social networking is one of the more modern forms, where a user might post personal information on a social networking site with little or no privacy settings and clicking on links that leads to other websites. Smart phones are now being used by a good portion of the American population, and there are applications that link users to their bank information. It makes identity theft that much easier to take place. The above types of identity theft could be grouped into two categories: account takeover and application fraud.

Account takeover is when a perpetrator obtains a person’s credit card account information via any of the mentioned means stated above, in addition to more, and buys products and services using the credit card itself or the account number and expiration date (this may also include the security code listed on the back of the card). Application fraud, which may also be known as “true name fraud,” occurs when a thief uses a victim’s personal identifying information to open new accounts in their name.

Once a thief has successfully gained access to a victim’s personal information, they may use that stolen identity in many ways: credit card fraud, phone/utilities fraud, bank/finance fraud, government documents fraud, and other fraud. They use all of this information to impersonate their victims, usually in a short amount of time before being noticed. It is best to not use a debit card to make purchases in this day and age, since a victim will most likely be responsible for the total amount of the loss depending on how quickly they report the loss to the financial institution. In addition, their checking accounts are usually depleted completely. “Generally, victims of credit card fraud are liable for no more than the first $50 of the loss. (Truth in Lending Act, Fair Credit Billing Act, 15 USC sec. 1601) In most cases, the victim will not be required to pay any part of the loss.” (Coping with Identity Theft: Reducing the Risk of Fraud, 2012).

Due to the common occurrence of identity theft, it is imperative to find ways to prevent having one’s identity stolen. One of the most important and best ways to avoid this unfortunate incident is to obtain a copy of one’s credit report from one or all three of the credit bureaus, preferably on a regular basis. There are several ways to do this, some of them free of charge. In addition, a person’s financial institution may offer an unlimited amount of credit report checks for a monthly fee. This is useful for an individual to notice if there are any unauthorized activities taking place. According to Using Information Technology: 9e, there are some specific actions one can take to be proactive against personal information from being handled inappropriately: check credit card billing statements, treat credit cards and other important papers with respect, treats passwords with respect, treat checks with respect, watch out for “shoulder surfers” when using phones and ATMs, and do not bother signing up for ID-theft protection programs. (Williams & Sawyer, 2010).

If a person still becomes a victim of identity theft, there are ways to effectively decrease the damage one might find if this occurs. By placing a “fraud alert” on one’s credit reports, and reviewing credit reports, it helps prevent a thief from opening any more accounts in one’s name. Close the account(s) that is in question immediately, and if there has been fraudulent activity made on the account(s), dispute the activity by writing. File a complaint with the Federal Trade Commission, which will help law enforcement across the nation track down identity thieves. Lastly, it is best to file a report with the local police or the police in the community where the identity theft took place. Bring a copy of the Federal Trade Commission Identity theft Complaint form, a cover letter, and any supporting documentation one might have.

While information technology is advantageous in society, it may also cause an increase risk to unsuspecting persons in the form of identity theft. One should always be cognizant of what PII they put on any unsecure network. One should always use good reasoning whenever handling personal and sensitive information. If the trends continue to head in the same direction as it has been in the last decade, expect identity theft complaints to continuously rise. The only plausible way to stop identity theft is prevention.

Works Cited
(2011). Consumer Sentinel Network Data Book: For January - December 2010. Federal Trade Commission.
Coping with Identity Theft: Reducing the Risk of Fraud. (2012, June). Retrieved August 6, 2012, from Privacy Rights Clearinghouse: https://www.privacyrights.org/fs/fs17-it.htm
Fighting Back Against Identity Theft: Federal Trade Commission. (n.d.). Retrieved August 6, 2012, from Federal Trade Commission: http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/about-identity-theft.html
Williams, B. K., & Sawyer, S. C. (2010). Using Information Technology 9e: A practical Introduction to Computers & Communications. New York: McGraw-Hill Companies.

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[ 1 ]. Note that although the numbers decrease, in year 2001, there were only 86,250 complaints of identity theft. The most current year available is 2010.
[ 2 ]. The Consumer Sentinel Network (CSN) is a secure online database of millions of consumer complaints available only to law enforcement.
[ 3 ]. Equifax, Experian, and Transunion