Identity theft is a crime where someone wrongfully obtains personal identifying information such as Social Security numbers and driver's license numbers and uses it for his or her personal gain. This can occur when a wallet is lost or stolen, when mail is stolen, a data breach, computer virus, “phishing” scams, or documents that have been thrown away.
Identity theft is one of the fastest growing crimes in the United States. This crime includes but is not limited to financial identity theft (checking and/or credit card fraud), criminal identity theft, governmental identity theft, and medical identity theft. Victims of this crime can have their bank accounts wiped out, credit histories ruined, and jobs and valuable possessions taken away. Some victims have even been arrested for crimes they did not commit.
Once every four seconds, someone becomes a victim of identity theft. Out-of-pocket expenses related to identity theft are more than $4,800 per incident, plus $16,000 in lost wages.
A stolen identity can be used to:
- Open new credit accounts
- Hijack existing benefit and healthcare accounts
- Empty bank accounts
- Apply for jobs and tax benefits
- Use as an alias when committing other crimes
Many people are concerned with how to protect themselves. Make sure to monitor your credit report from each of the three credit reporting bureaus and review them for accuracy, and stay up-to-date with your credit and financial information. Also be careful about how much personal information you carry with you and never leave it out. Avoid giving out any confidential information to an unsolicited caller over the phone. Also be careful of phishing and other online scams, monitor your online payments and install a firewall and anti-virus protection.
Even if you take all the right precautions, you may not be able to prevent identity theft from happening. Insurance companies offer access to money to be used towards lost wages, attorneys fees, data recovery and other costs required for recovering from theft. Some may also offer extras such as:
- ID monitoring
- ID risk scoring
- Fraud report card
- Computer protection – anti virus software
- Guaranteed restoration services
It is likely that everyone will be a victim of identity theft at some point in his or her life, and many are likely to be victimized more than once. It is important to take all the preventive measures and consider identity theft insurance.