Identity Theft

Losing Yourself...

 

 

 

 

  Jesse Magloire

Independent Research Paper

 

    Shakespeare once said, “But he that filches me from my good name, robs me of that which not enriches him, and makes me poor indeed.” The short summary to what Shakespeare said is that identity theft is a crime. The 1990’s spawned a new variety of crooks called identity thieves. Their stock in trade is your everyday transaction. Each transaction requires you to share personal information: your bank and credit card account numbers; your income; your Social Security number  or your name, address and phone numbers. An identity thief co-opts some piece of your personal information and appropriates it without your knowledge to commit fraud or theft. Identity theft and fraud has become a serious thing ever since the beginning of the internet because of the personal information that is traded over the net. Over the past decade it has become a problem that has been dealt with pretty well, but as the armed forces get smarter, so do the criminals. Plus many people don’t actually know what identity theft is, when they have become a victim, how to prevent it, or what to do when they are victimized. So in this Independent Research paper some aspects of Identity theft and Identify Fraud will be discussed.

   The Federal Trade Commission recently released a survey showing that over 27.3 million Americans have been victims of identity theft in the last five years. To add to this number, over 9.9 million people in the last year have fallen victim to this crime. Also according to the survey, last year’s identity theft losses to consumer victims was reportedly $5 billion in out-of-pocket expenses losses to businesses and financial institutions that totaled nearly 48 billion dollars. This is a sad statistic but it happens because many people don’t even know that they are victims of identity theft. Even more people don’t even know what identity theft and fraud is. The definition of Identity theft and fraud given by the U.S. Department of Justice is, “Identity Theft and Fraud are terms used to refer to all types of crimes in which someone wrongfully obtains and uses another persons personal data in some way that involves fraud or deception, typically for economic gain.” Things like peoples credit card numbers, social security numbers, bank cards, calling card numbers, etc... are all accessible through different facets and can be used at your expense to personally profit others. In the U.S. and Canada many people report that strangely money has been removed from their bank accounts, or they have given consent to something that they have no knowledge of. Many of those people think that this is a system glitch or a coincidence but in reality their identity has been stolen. In some worst case scenarios many people have their identities taken over all together and they obtain vast debts, and crimes are committed in their name. The worst part about it is not finding the criminal though, it is restoring ones reputation in the community and correcting the erroneous information for which a criminal is responsible.

    In one famous case a criminal not only incurred more than over 100,000 dollars of credit card debt, he obtained a federal home loan, bought homes, motorcycles, and handguns in the victims name. He then taunted the victim by calling him and saying that he could pose as him for as long as he wanted to (because identity theft was not a federal crime at the time of the incident). Then to top it all off he filed for bankruptcy in the victims name. The victim and his wife spent more than four years and more than 15,000 dollars of their own money trying to restore their credit and reputation. The criminal served a breif sentence for making a false statement to procure a firearm, but made no restitution to his victim for any of the harm he caused. This and other cases, and others like it, prompted Congress to create a new federal offense of identity theft in 1998.  Cases like this are usually rare but when this does happen it’s because people don’t know the signs of possible identity theft. There are three basic things you can look for to see if someone is using your identity. The first is if your credit card statements show unauthorized charges and/ or purchases that you know you did not make are shown. Second, if you fail to receive bills or credit card statements for charges you have made, when in the past you received them at the same time each month. Last if you receive phone calls from creditors trying to collect debts that are not yours.

    People just can’t log onto the internet to steal someone’s identity though. There are various ways that a criminal can steal someone’s identity without even getting on a computer. Some criminals may engage in "shoulder surfing." That is watching you from a nearby location as you punch in your telephone calling card number or credit card number; or listening in on your conversation if you give your credit-card number over the telephone to a hotel or rental car company. Some criminals do what is called "dumpster diving." That is when they  go through your garbage cans or a communal dumpster or trash bin and steal copies of your checks, credit card or bank statements, or other records that typically bear your name, address, and even your telephone number. These are only a few of the ways in which criminals steal identities. Other ways someone gets information without touching a computer is by going through your trash to take pre-approved credit card offers, discarded credit card receipts or other personal information. Stealing your purse or wallet. Calling you on the phone, posing as a solicitor in order to gain personal information including your name, date of birth, or your social security number. Or if you receive something like a pre-approved credit card by mail and discard them without tearing up the enclosed material, criminals can retrieve them and try to activate them. They could complete a “change of address form” to divert your mail to another location. Also they could fraudulently obtain your credit report by posing as a landlord, employer, or someone else who may have legitimate need for, and legal right to, the information.

    But nowadays we live in a time where technology reigns supreme. The Internet has become an appealing place for criminals to obtain identifying data, such as passwords or even banking information. With the excitement and the amazement of a new world that is open to explore many people respond to “spam” unsolicited e-mail. Sometimes the e-mails promise the person who opens it with some benefit but request identifying data first. People respond to these e-mail thinking that the requester will hold up his end of the deal. In some cases criminals reportedly have used computer technology to obtain large amounts of personal data. If a criminal takes the steps to ensure that bills for the falsely obtained credit card or bank statements showing the unauthorized withdrawal, or payment statement are sent to an address other than the victim’s, the victim may not become aware of what is happening until the criminal has already inflicted substantial damage on the victim’s assets, credit, and reputation. They also can get your information from the workplace in a practice known as “business record theft.” This is when they steal files out of offices where you’re a customer, employee, patient or student; by bribing an employee who has access to your files; or “hacking” into electronic files.

    Once a criminal has this information they can do a number of different things to you. They can call your credit card company pretending to be you, and ask to change the mailing address on your credit card account. They can then run up charges on your account. Because your bills are being sent to the new address, it may take some time before you realize there’s a problem. They can open a new credit card account using your name, date of birth, and social security number. When they use the credit card and don’t pay the bills, the delinquent account is reported on your credit report. They can establish phone or wireless services in your name. They can open a bank account in your name and write bad checks on it. They can file for bankruptcy under your name to avoid paying debts they’ve incurred under your name, or to evade other financial problems. They can counterfeit checks or debit cards, and drain your bank account. They can buy cars by taking out auto loans. They can also give your name to the police during an arrest. If they are released from police custody, but don’t show up for their court date, an arrest warrant can be issued in your name. All of this can be don by someone simply responding to a promising e-mail that required them to relinquish private information.

    But people don’t just have to sit back and worry about becoming victims because the government is doing something about this ongoing problem. The Federal Government and many states have passed laws prohibiting identity theft. Anyone who intentionally uses the Social Security number of another person to establish a new identity or defraud the government is breaking the law. In a recent statement made by the federal government they said, “We're making sure that Social Security numbers are less accessible by strengthening our processes for issuing new Social Security numbers and replacement Social Security cards. Additionally, we are working with other federal agencies to find ways to detect and prevent identity theft.” But they just aren’t protecting people from getting their social security card stolen, they are doing everything that they can. The Department of Justice prosecutes cases of identity theft and fraud under a variety of federal statues. In the fall of 1998, Congress passed the “Identity Theft and Assumption Deterrence Act.” This legislation created a new offense of identity theft, which prohibits knowingly transfering, or using, without lawful permission 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 of local law. It is even illegal for people to be found with the intent to steal anothers identity. Federal prosecuters are working with federal investigative agencies such as the Federal Bureau of Investigation, the United States Secret Services, and the United States Postal Inspection Service to prosecute identity theft and fraud cases. Any federal offense that involves identity theft or fraud is a felony. They can carry substantial penalties in some cases which include fines and criminal forfeiture, and can carry sentences as high as 30 years’ in prison. Plus depending on your internet service (ISP) provider and your Web Browser, there are systems set up through your Web Browser that monitors whether or not your connections are secure, and if someone is attempting to hack into your system. Furthermore, many Browsers prompt people that there is a chance that they may have to exchange personal information before they even enter certain sites. Besides that, the safety if each site, (depending on your Browser) is also rated, and the rating is accessible to you.

    Also now there are numerous acts that have been implemented that keep you from becoming a victim in any aspect. The Fair Credit Reporting Act (FCRA) establishes procedures for correcting mistakes on your credit report and requires that your report be made available only for certain legitimate business needs. This also comes with a list of things that protect you from someone else’s criminal acts from ruining your credit. Because of this disputed information that cannot be verified must be deleted from your credit report. If your report contains erroneous information, the credit bureau must correct it. Also if your file shows an account that belongs to someone else, the credit bureau must delete it. The Truth in Lending Act limits your liability for unauthorized credit card charges to $50 per card. The Fair Credit Billing Act (FCBA) establishes procedures for resolving billing errors on your credit card accounts. This includes fraudulent charges on your accounts. The Fair Debt Collection Practices Act prohibits debt collectors from using unfair or deceptive practices to collect overdue bills that a creditor has forwarded for collection. Also the Electronic Fund Transfer Act provides consumer protections for transactions involving an ATM or debit card or any other electronic way to debit or credit an account. It also limits your liability for unauthorized electronic fund transfer. Many things are being done to prevent identity theft and fraud, but the best way to prevent it is to know how you can protect yourself.

    There are some basic ways that someone can protect themselves without even getting on a computer. Even though most of the identity theft going on is now done on the internet, it is more common for someone to steal your purse, than to hack into your computer. To reduce or minimize your risk of possibly becoming a victim of identity theft or fraud, there are some basic steps you can take. First off, just remember the word, “SCAM.”

    S- Be stingy about giving out your personal information to other people unless you have a reason to trust them, regardless of where you are. When you are at home all information that you give out should be on a need to know basis. Your bank or credit card company isn’t going to call you and ask for your social security number or date of birth, because it is already on their record. Also if someone calls you that you don’t know and states they are from a “major” credit card company or other place. You don’t have to give them any information over the phone. The best thing to do is to ask them to send you a written application. The more personal information that you routinely hand out to people who may not need it puts you at risk.

    C- Check your financial information regularly, and look for what should and should not be there. If you have a bank or credit card account you should be receiving regular monthly statements that list all transactions for the most recent month or reporting period. If your not getting these things then immediatley call the financial institution or credit card company to inquire. If your told that your statements are being mailed to an address that is not your own then you should immediately make it known that you didn’t authorized that change. You should make it known that someone may be improperly be using your account, and that you would like a history off all of the transactions made.

    A- Ask periodically for your credit report. Your credit report should list all bank and financial accounts under your name, and will provide other indications of whether someone has criminally opened or used any accounts in your name.

   M- Maintain careful records of your banking and financial accounts. Even though financial institutions are required to keep copies of your checks, debit transactions, and things of that nature of at least five years, you should keep these things too. Your monthly statements and checks should be kept for at least one year, if not more. Because if you need to dispute a certain discrepancy (especially if they purport to bear your signatures) your original records will be more immediately accessible and useful to the institutions that you have contacted.

    Yet even though you may be careful about all of this stuff, and you keep your doors and windows locked, and you keep all of your personal papers in a secure place, you could still be at risk. This all depends on what you use your personal computer for. Social security numbers, financial records, tax returns, birth dates, and bank account numbers may be stored on your computer. This is a virtual goldmine to an identity thief. But there are many things that you don’t have to be a computer expert to do, that will keep your information safe.

    First off you should update your virus protection software regularly, or when a new virus alert is announced. Viruses can have a variety of damaging affects, including introducing program code that causes your computer to send out files or other stored information. Look out for security repairs and patches that you can download from your operating system’s website. Second, don’t download files sent to you by strangers or click on hyperlinks from people you don’t know. Opening these can sometimes expose your system to a computer virus or program that could hijack your modem. Use a firewall program, especially if you use a high-speed internet connection. Because this leaves your computer connected to the internet 24 hours a day. The firewall program will allow you to stop uninvited guest from accessing your computer. Without it, hackers can take over your computer an access your information on it. Next you should use a secure browser. A secure browser uses software that encrypts or scrambles information you send over the internet to guard your security. Be sure your browser has an up to date encryption software installed. If not you can download browsers from the net. When you submit information over the net, look for the “lock” icon on your browser’s status bar to be sure your protected. Next try not to store financial information on your laptop unless it is utterly necessary. If you do then be sure that you don’t use an automatic log-in feature which saves your user name and password so you don’t have to enter them each time you log-in. Also make sure your password is a strong one that has a combination of numbers, upper, and lower case letters. Plus once your done your session log-off immediately. That way if your laptop is stolen it is almost impossible for a thief to gain your personal information. Another way of protection is to look for web site privacy policies. They answer questions about maintaining accuracy, access, security, and control of personal information collected by the site. If you don’t see a privacy policy, you should consider surfing the web on another website. The last way you can help, to help yourself is by watching how you dispose of a computer. Before you dispose of a computer, delete personal information. Deleting files through the keyboard or mouse command may not be enough because the files may still be stored on the computer’s hard drive. You must use a “wipe” utility program to overwrite the entire hard drive. It makes the files unrecoverable.

     Yet with all of these sysytems and prevention precautions set into place people still become victims of identity theft and fraud. If you are to become a victim of identity theft there are a number of things that you should do. First you should order copies of your credit report from all three credit reporting agencies to get as much information as possible. Call the toll-free fraud number of any one of the three major credit bureaus to place a fraud alert on your credit report. This can help prevent an identity thief from opening additional accounts in your name. As soon as the credit bureau confirms your fraud alert, the other two credit bureaus will automatically be notified to place fraud alerts on your credit report, and all three reports will be sent to you free of charge. Then contact the credit reporting agencies in writing and let them know that you are disputing specific inaccurate items in your credit report due to possible identity theft. Under the FCRA they must investigate. Next you must contact the necessary credit card companies who are reporting the false debt and have them investigate due to possible identity theft. You must then close any accounts that have been opened fraudulently or tampered with. These accounts included accounts with banks, credit card companies and other lender. Last make sure that you keep a copy of all of the information that you receive from any companies that you petition. This is very important in the event that you would have to take your case to trial. But if you think that you are having a serious case of identity theft you could simply call the Federal Trade Commision (FTC) to report the situation. Under the Identity Theft and Assumption Deterrence Act, the FTC is responsibe for receiving and processing complaints from people who believe they may be victims of identity theft. They must provide materials to those people and refer the complaints to the appropriate entities. These entities include the major credit reporting agencies and law enforcement agencies. Furthermore you can also call your local FBI office or the U.S. Secret Service to report crimes relating to identity theft and fraud. You can also contact the Postal Inspection Service if you suspect that an identity thief has submitted a change-of-address form with the Post Office to redirect your mail, or has used the mail to commit frauds involving your identity. You can even get in touch with the Social Security Administration if you suspect that your Social Security Number is being used. Also if push come to shove, you can also contact the Internal Revenue Service. This is if you suspect the improper use of identification information in connection with your taxes. There are a number of government and private organizations that have a lot of information about various aspects of identity theft and fraud: how it happens, what you can do about it, and how to guard yourself. No situation has to escalate to the point where someone has accumulated thousands of dollars of debt, and a bad reputation in their community. There are doors and gateways that are there to help others get out of any fraudulent situation that they might find themselves a victim of. But once you find help you must take the precautionary steps to not get in that situation again. You must regularly order a copy of your credit report from each of the three major credit bureaus. Place secure passwords on your credit card, bank, and phone accounts. Then you must ensure that your home and personal computer are secure at all times.