Identity theft: How does it happen and how to avoid it

What is Identity Theft?

Identity theft is basically stealing of your personal information like the social security number, credit card number, home address, and date of birth to fraud others. As per the Federal Trade Commission estimates, there are over 9 million identity thefts each year in US. The frauds who indulge in identity theft steal identities of the victims for opening a new line of credit with a bank, debiting money from the bank accounts, getting a new credit card, opening accounts with utility companies like electricity and telephones or to rent an apartment.

The most important thing about identity theft is that you may not be aware of the fact that your identity is stolen until and unless you find a discrepancy in your credit card or utility bills or find an outstanding debt listed in your credit report. However, the most serious crime is when the identity thief uses the personal credit card and bank account information to make purchases or when the thief uses the social security number to open a new line of credit in the name of the victim. The criminal may use important information to obtain a fake license with changed picture and address claiming that he has changed his address, and then obtaining a credit in the name of the victim.

How these thieves steal identities?

The identity thieves may use various methods to steal your identity. Mostly they collect your old credit card or telephone bills from the paper bins where you throw them away and so before throwing them away, you should always cut those bills into numerous pieces, so that the information cannot be retrieved from those pieces. Moreover these thieves may also steal your purse from where they may find your credit cards or tax information.

What to do if you find your identity stolen?

Once you find that your identity is stolen, you should fill up the Federal Trade Commissions identity theft complaint form to get registered as a new victim and then take a printed copy of the form along with your identity proof and a photo to the police and file a complaint over there. Take a copy of the official police report. Some local police departments in US also allow automated reports either by phone or through internet, but it is always wise if you visit the police department to file the complaint. You can also call the Federal Trade Commission at their hot line number 1-877-438-4338 and update the complaint even if you have filed the complaint online with FTC.

How can we prevent this identity theft?

If you think that your personal information like your credit card or your social security number has been stolen, you can place a fraud alert on your credit report. If you place a fraud alert with any one of the three credit reporting agencies, the other two bureaus will be informed automatically and fraud alert services will be set up by all the three credit bureaus. It is a free service offered by the bureaus in which the creditor will call you up and verify before offering a new line of credit in your name. Once you set a fraud alert service you will automatically receive a free credit report from each of the three bureaus. You can call the three credit bureaus to set fraud alert services at the numbers provided below:

Experian: (888) 397-3742
Trans Union: (800) 680-7289
Equifax: (800) 525-6285