Here is your monthly Bee Smart Financial Tip from Joel and Caroline at Metro Financial Group.
ID Theft – How Does It Happen?
In today’s technologically advanced society, identity theft is easier to commit than you might think. The Identity Theft and Assumption Deterrence Act of 1998 defines identity theft as the following: when someone “knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law.”
The Internet and automated teller machines (ATMs), now widely used for a variety of financial transactions such as shopping online and making cash withdrawals, are often cited as two contributing factors to what many perceive to be an identity theft epidemic.
If you worry about your personal information getting into the wrong hands, familiarize yourself with the following ways a criminal might obtain information with the intent to steal money or commit other crimes:
“Shoulder Surfing.” Shoulder surfing occurs when someone lurks near you while you give personal information to a person or enter it into a machine. Usually, the perpetrator peers over your shoulder and procures your information while you continue with your transaction. For example, if you are in a public place using a cellular phone to make hotel reservations, an eavesdropper might be able to remember, or write down, your name and credit card information. That information can then be used to make fraudulent purchases. Or, suppose you make a store purchase with a credit card and lose your receipt. Someone—even the store employee—could take the receipt with your information and commit fraud. Shoulder surfing can also be a hazard at ATMs. If someone inconspicuously standing in line manages to get your personal identification number (PIN), it may help him or her gain access to your bank account.
Pickpocketing and Lost Wallets. Years ago if you lost a wallet or were pickpocketed, you probably only worried about the cash that was inside. However, nowadays, being pickpocketed or losing a wallet can mean facing thousands of dollars in fraudulent purchases with credit cards.
“Dumpster Diving.” Dumpster diving is as obvious as it sounds. If you dispose of trash in a dumpster, others may have access to it. Identity theft perpetrators might “dive in” and easily find the information they need, via old bank statements, receipts, and bills, to wreak financial havoc in your name.
Intercepting Mail. Identity thieves watch mailboxes every day, waiting for the next credit card pre-approval letter to arrive. They then call the credit card company posing as the victim in order to open an account. While you cannot stop all solicitations, you can choose to “opt out” of receiving some of these letters. Calling 888-5-OPTOUT can help you limit the amount of unsolicited mail and phone calls you receive.
The Internet. Many Americans rely on the Internet to help them handle their personal finances. While it can be a useful tool for banking or paying bills, the Internet can also be a haven for prospective identity thieves. Entering your personal information into an unsecured website may allow an experienced hacker to obtain that information and use it at your expense.
If you become a victim, it can be financially, as well as emotionally, devastating. With your personal information, a criminal might be able to simply open a credit card account and make fraudulent charges, or in more extreme cases, he or she may even assume your identity, open bank accounts, and commit more serious crimes—all under yourname. These are just some of the ways criminals commit identity theft, the effects of which can be difficult and time-consuming to correct. Therefore, taking steps now to protect yourself may save you aggravation and money in the long run. For more details on how to avoid falling victim to identity theft, visit the Federal Trade Commission (FTC) online at http://www.ftc.gov.
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