What is identity fraud?

It can be as simple as someone stealing your purse or as complicated as someone hacking into your credit files. In any case, identity fraud - stealing personal data like credit card account information or a Social Security number to commit fraud or other crimes in the victim's name - has become the most prevalent crime in the United States. Not only can identity thieves steal from you, they can also ruin your name by, say, opening fraudulent accounts that leave you with bad credit - or even a criminal record.

Any of the following events may indicate you've been struck by an identity thief: unexplained charges in, or withdrawals from, your accounts; receiving credit cards for which you didn't apply; not receiving bills or other mail (which may indicate that an identity thief has changed your address); being turned down for a loan and receiving calls from debt collectors or companies from which you didn't order products.

Credit/account fraud is the most common form of identity theft. Online scammers and offline thieves steal your personal information - your name, address, birth date, driver's license number, Social Security number, ATM-card information, account log-ons and passwords - and use them to forge fake credit cards and ATM cards in your name and go on a fraud spree, putting unauthorized charges on your existing accounts. Strange charges show up in your billing statement and bills arrive from unknown or unfamiliar sources, turning your life into a nightmare.

According to the Federal Trade Commission (FTC), the average identity theft victim doesn't learn he or she has become victimized until a year after the incident occurs. Victims of identity fraud can spend hundreds of hours and tens of thousands of dollars repairing the havoc wreaked on their personal records and finances and often end up paying legal fees to do so. Sometimes, ID-theft victims are forced to pay off the debt racked up in their name by fraudsters. In the most insidious cases, they are arrested for crimes committed by the person who stole their identity.

Plain Facts about Fraud

• Identity theft last year struck 9.9 million Americans, costing businesses and individuals $53 billion, according to a survey commissioned by the Federal Trade Commission.
• Of the billions of dollars Americans lost to identity theft in 2004, just 12 percent of the cases were done online, compared with 72 percent offline. ---Reuters, 2005
• For businesses, victims of unauthorized access to sensitive information reported, on average, about $300,000 in losses in 2004. That's up from about $50,000 in 2002-2006. Meanwhile, the average loss from the theft of proprietary information was $355,000 in 2004, vs. $168,000 in 2002-2006. ---USA Today, 2005
• Identity theft is moving online and the criminals are shifting their focus to stealing personal information of individuals. In February, 2005, identity thieves had accessed sensitive information on at least 145,000 people tracked by ChoicePoint Inc., a California-based data broker. In June, hackers infiltrated the computers at CardSystems and stole as many as 40 million credit card numbers, the largest reported breach of personal data. ---Los Angeles Times, 2005
• Police are finding well-run hierarchical groups structured like businesses that are stealing and selling stolen credit card numbers and other personal data. ---The Wall Street Journal, 2005 
• Approximately seven million people were victims of identity theft over the previous 12 months. ---Advance, Quarterly News and Tools from TIAA-Cref, summer 2005
• When individual victims discovered fraud early through the Internet, their loss was $551. But when they realized the fraud only after receiving statements in the mail, it cost them $4,543. ---Reuters, 2005

About identity theft, Johannes Ullrich, chief research officer at the SANS Institute, a computer-security reach and training organization in Bethesda, Md., remarks, "All of the burden rests with the user, who's probably the least able to fix these things or recognize them." But with Monesafe, this is NOT true any more.

Report Fraud

Know what to do if you become a victim:

Act fast. In Monesafe, promptly contact your bank or credit card company to report fraudulent transactions. Most card issuers relieve you of liability only from the time when you notify them of fraud. So promptness is very important in protecting your credit record.

In more serious cases of identity theft, Lynn Brenner gave the following advice in Parade:

Alert any of the three major credit bureaus immediately. Call Equifax, Experian or TransUnion to put a fraud alert on your credit reports. The alert lasts up to 90 days and requires creditors to call you before opening new accounts in your name.

Close your credit card accounts and change the passwords on all your financial accounts.

File a police report. Credit bureaus won't extend a fraud alert without it.

Mail copies of the police report to all three credit bureaus with a cover letter demanding your complete credit file.

Call every creditor with a bogus account listed in your file and have them close it immediately.