To start this course, we'd like you to think about what you are already doing to protect your identity. How many of these steps are you taking?
- Limit the number of identification cards that you carry
- Refuse to give out personal information over the phone unless you have initiated the call
- Signed up for the State or National Do Not Call Registry
- Shred or destroy credit card receipts, credit applications, bank checks, and financial statements
- Told credit bureaus you do not want to receive unsolicited credit or insurance offers
- Regularly review your credit card and other financial statements
- Ordered and reviewed a copy of your credit report
As you go through the course, you will understand why these steps are important. You may be already doing some of them. You can take more steps—or a first one—during this course. Now is always the right time to protect yourself from identity theft.
Just like preventing any crime, to prevent identity theft, you have to understand the tools the thieves use to commit their crime. In this session, you'll learn what identity theft is, and what thieves use to commit it.
To understand what identity theft is, let's look first at what your "identity" actually is. Then, we'll look at how thieves can steal it.
What Is Your Identity?
If you ask most people to identify themselves, they probably would tell you they are skinny or balding, tall or short. Or they may say, "I'm a baby boomer who's planning a second career after I retire." You might hear, "I'm a new grandparent and I'm more thrilled about it than I ever thought I would be."
You may be tall, dark, handsome, a boomer and a grandparent. But that is not your identity-at least in the identity theft sense. Your identity is all those bits of identifying information about you that are pieced together to make your financial identity.
Which of these are part of your financial identity?
- Social Security number
- Mother's maiden name
- ATM PIN (Personal Identification Number)
- Date of birth
- Bank account number
Did you choose all seven? Congratulations! You have identified some of the pieces of information that make up your identity.
How Do Thieves Steal Your Identity?
You may be wondering how your identity can be stolen if you still have your own identity—and you haven't lost your credit cards or purse recently. Many victims of identity theft are shocked to learn that someone else has been taking out loans, ordering cell phone accounts, getting new credit cards and even committing crimes using the victim's identity. Thieves do this by collecting those bits of identifying information about you and piecing them together to create a "new you."
It's like there are two of you—the real you with your good credit, and the other person pretending to be you. Without your even knowing this other you exists, the identity thief does financial things using your identity. The thief's real name and identity are invisible because the thief uses your name and identity.
It can be hard to appreciate the seriousness of identity theft. Some consumers tell us that they don't know why they need to be concerned about it. One AARP member said, "I don't have very good credit any way, so why would anyone want my identity?" Others have said, "I don't use a lot of credit cards and I'm not going to borrow any money any time soon, so why should I care?" If a thief takes your identity, eventually you will find out why you should care—perhaps when you least expect it.
John T., an airport security guard, took a short vacation to Mexico. When he tried to return home, he was arrested at the border—because "he" was wanted for murder. John was held in jail on a fugitive warrant until he could prove "he" wasn't the suspect and that his identity had been stolen. After a week in jail, he finally was able figure out that someone had found his driver's license and applied for a new one using his picture and John's information. That person was wanted for murder. But his driver's license number was the same as John's.
Mary W. had been widowed for ten years. One day she got a call from a bill collector demanding payment for thousands of dollars of electronic equipment. Someone using her deceased husband's name had purchased the equipment in 2004 and not paid for it. She never found out how they got her husband's Social Security number. But she realized that she had recently thrown away a lot of old files while cleaning out his desk. The thieves must have found her husband's Social Security number in those old files. They used it for an "instant credit" application at the electronics store.
Sue G. decided to go high-tech and purchase her first cell phone. She was denied credit because "she" had $568 in unpaid cell phone bills. When she started investigating where this phone bill came from, she checked her credit report. There, she learned that someone had opened other accounts using her name. She's not sure, but she remembers a rash of mail being stolen from mailboxes in her neighborhood. She always used to clip her mail to the outside of her mailbox. A thief must have taken her identification numbers from some mail to get a cell phone in her name.
Fred T. found that retirement was not so exciting after all, so he applied for a part-time job as a clerk at a neighborhood store. He got turned down because "he" had an unpaid court judgment for $15,000. Eventually Fred figured out that a workman in his home had taken bank account statements off his desk. The thief must have used Fred's personal information to borrow money. When the loan never got paid back, it ended up in court.
Maria C. got a bounced-check notice and fee from her bank right after she had deposited her pay check. She finally found out that someone had stolen a check out of the middle of her checkbook. It must have been when she left her purse in a grocery store shopping cart. They used her bank account number to open a new account, order new checks, and withdraw all the money from her account.
It's pretty scary how ordinary people going about their day-to-day business suddenly find out that their identity has been stolen. Now you understand more about what your "identity" is. You've seen what can happen when your identity gets used to commit a fraud or crime.
Next, in Session Two, you'll learn what you can do to reduce the chance these things will happen to you. You'll lower the chance that a thief will steal your identity, or use your identity to commit fraud or a crime.