OII Backgrounder: Identity theft
(9/03)

Identity theft takes many forms. It ranges from fraudulent charges on an existing credit card account to the use of a person's identity to open a new account, take out a loan, rent an apartment or commit a crime.

Identity bandits victimized millions of people in 2002. In fact, according to a survey of 4,000 adults sponsored by the Federal Trade Commission (FTC) released in September 2003, one in four US households has been a victim of ID theft in the past five years. The study found that 10 million people were victimized in 2002, costing victims $5 billion in out-of-pocket expenses. The FTC also reports nearly $48 billion in losses to businesses and financial institutions in 2002. (See “Table 1” for other findings)

Measuring the extent of identity theft has been difficult, in part, because people don't always report the crime to authorities. Only about 25% of the victims who participated in the survey said they had filed a report with local police.

Among the report's findings:

• Nearly 25% of all victims said their personal information, such as credit cards, checkbooks and Social Security cards, had been lost or stolen
• 11% of the survey respondents said they were aware that their personal information had been taken before discovering they were victims of identity theft
• The incidence of ID theft was highest in the South and West and lowest in the Midwest
• One-quarter of the victims said the misuse of their information occurred during a single day; 12% said the crime occurred over a period of more than six months

Theft prevention measures

Here are steps you can take now to stop thieves from stealing your name:

1. Do not give out personal information, such as account or credit card numbers, on the phone or over the Internet unless you have initiated the contact. Identity thieves could pose as bank officials,
2. Report lost or stolen checks immediately, and properly store or destroy canceled checks. Don’t have new check supplies sent to your home. When you order new checks, arrange to have them sent to your bank. Examine new checks to be sure none were stolen during shipment, and store them in a safe and secure location.
3. Keep a secure list of all your credit cards. Record the account numbers, expiration dates and telephone numbers of the customer service and fraud departments in a secure place so you can quickly contact your creditors in case your cards have been stolen. Do the same with your bank accounts. Never carry this information around with you; keep it under lock and key.
4. Destroy unused financial solicitations before discarding them, and tear-up other financial documents such as statements or receipts before discarding them.
5. Guard your Automated Teller Machine (ATM) number, and treat your receipts with care. Leaving them behind or throwing them in the trash could leave them vulnerable to thieves, who could use them to access your accounts.
6. Make sure your mailbox is secure, and promptly remove mail when it has been delivered. Identity thieves often raid mailboxes to obtain credit card offers and financial statements.
7. Order copies of your credit reports at least annually to review your file. A copy of your credit report is available for a small fee. There are also online services that let you order reports from all three agencies. The three major credit bureaus are:
   Equifax: 800-685-1111
   TransUnion: 800-916-8800
   Experian: 800-682-7654
8. Minimize the amount of information a thief can steal. Don’t carry extra
   credit cards, your Social Security card, birth certificate or passport except when needed.
9. Invest in a shredder. Get into the habit of shredding all documents, forms and letters bound for the trash. This includes credit card receipts that you no longer need.
10. Don’t mail bills by putting them in your mailbox for your postal carrier to
    pick up. If stolen before they are picked up, your checks can be altered and then cashed by the imposter. It is best to mail bills and other sensitive items at the post office rather than neighborhood drop boxes
11. Watch the mail when you expect a new or reissued credit card to arrive. Contact the issuer if the card does not arrive.
12. Reduce the number of credit cards you use. Cancel unused accounts. Even though you do not use them, these account numbers are recorded in your credit report, which is full of data that can be used by identity thieves.

If you become a victim of ID theft

If you have been a victim of identity theft, take these steps immediately:

• Contact your bank or credit union to protect your accounts.
• Contact your credit card suppliers.
• Contact the Social Security Fraud Hotline: 800-269-0271.
• Contact the Federal Trade Commission (FTC) Identity Theft Hotline: 1-877-IDTHEFT (1-877-438-4338).
• If you have an ID fraud expense coverage endorsement to your homeowners insurance policy or a separate policy to cover such losses, contact your insurance agent to start the claims filing process.

TABLE 1: ID theft by the numbers for 2002

Source: FTC ID theft survey report, 2003