You and your husband are sitting anxiously at your real estate agent’s desk. She is checking to make sure you have been approved for your mortgage. You’re already thinking about what color curtains you would prefer, though. Or whether you want to keep the rugs or put in hardwood instead. That’s because when you were house shopping a few months ago you were approved for a mortgage. The deal fell through, though, so you never actually went through with it.
The real estate agent comes into the room. The mood darkens a bit. There is a second of awkward silence and you can feel what is coming.
“I’m sorry Jack and Jill… you weren’t approved. You had some dings against your credit report and you didn’t qualify.”
You respond back “What are you talking about!? It was checked four months ago and I was approved! It was perfect!”
Le sigh. If you didn’t cause the bad marks, somebody else did. And if you aren’t aware of it I imagine it isn’t just a case of you having short-term amnesia.
Your identity was stolen.
What is identity theft?
As in the above scenario, identity theft occurs when someone falsifies documentation and uses some form of your personal information. It may be just your name, it could be your social security number, or they may have used your credit card information. Perhaps they used other identifying information in order to open a new bank account, activate another credit card, get a drivers license, or commit some other type of fraud. Who cares? It’s not you at fault, right? Exactly! Except… not. You are the one held at fault because it is your personal information. Do you think the bad guy is losing sleep over your bad credit report?
Why do the identity thieves go through the trouble? Perhaps they want a new plasma TV. Or maybe they are really feenin’ on an iPhone. Whatever the reason, they want something and are using your identity to get it.
What are some things they may be using your identity for?
- Buying spree! A new plasma or laptop can be quite expensive… but not when you are paying! Or how about 40 Nintendo wii’s since they are so easy to resell on Craigslist?
- More credit cards using your information. This just opens the doors for an even larger shopping spree. For multiple people.
- We keep hearing it is a good buyers market for cars. Your name may look better on the auto loan than their own name.
- Ever have a credit check run trying to get a cell phone? Depending on your credit you may have to pay a huge deposit.
- Quick cash. They may write checks or use a debit card and drain your account.
- They may open a new account with no balance and just write bad checks.
- Get a job.
- Give your name to the police during an arrest. You may be getting a bench warrant when they don’t show.
You need to turn over stones (or boulders) in order to fix everything in the aftermath. This can take months or even years to resolve. In some cases you may even need to go to court to resolve all of the issues. I will go over how to fix a bad case of identity theft in a future post. While you are waiting years to make everything right, you may be losing out on some things such as: Job opportunities, car loans, mortgages, or even time… as you will be spending all of yours in jail!
8 Ways Identity Thieves Get Your Information
In order to figure out if you have had your identity stolen the first important step is figuring out where these identity thieves may be getting your information. Here is a list of common places where your information can be found:
- They get information by hacking into businesses or other institutions (like universities or office buildings) records or computers.
- They dumpster dive for random “loot.” If they are singling you out they go through your individual trash can.
- They pretend to be a potential future employer or landlord of yours and obtain a credit report by social engineering.
- They acquire your credit/debit card numbers as they are processed. This can be done by installing a piece on a scanner or stealing it electronically.
- They steal or find your wallet or purse. Your information on a silver platter.
- They intercept your mail. Pre-approved credit cards? Sweet!
- They go the USPS and fill out a change of address to have your mail diverted to a location of their choice.
- They actually steal the information from your home. Be careful about leaving strangers (contractors?) in your home alone!
Some indications of identity theft include:
- All of a sudden failing to receive bills or other mail. This could tip you off to a potential address change by the identity thief.
- On top of the normal “pre-approved” offers you start receiving credit cards for which you did not apply.
- Like in the opening scenario, being denied credit for no apparent reason.
- Suddenly receiving calls or letters from debt collectors or businesses about merchandise or services you did not buy.
All of these errors individually could potentially be caused by an error. Maybe the accounting department chose the wrong debtor and now all of a sudden it looks like your account is outstanding. However, when a few of them happen in tandem you should take it as a warning of potential wrong doing. To be ultra safe I would follow-up on even one of those indicators occurring.
Even if you don’t realize anything is happening, do not assume that your information is safe. Lack of evidence is not evidence of (the) lack (of fraudulent activity).
3 things you should do to check if you have been a victim of identity theft
- Get a copy of your free credit report annually. I advise getting your credit report every trimester, for free, using AnnualCreditReport.com.
- Open your bills as soon as possible.The sooner you find out the bill is fraudulent the easier it will be to correct.
- Monitoring the balances of all your financial accounts. You should go over the charges to make sure they are all legitimate.
I'm MLR. After graduating from college debt free, I decided to write a blog encouraging people to adapt responsible and sensible personal finance rules.
May 7th, 2009 at 8:31 am |
This is a great resource for people wanting to learn more about identity theft. Especially useful was the list of ways a thief may try to get your information. By being aware of these we can make common sense changes in order to avoid them!
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May 7th, 2009 at 11:08 am |
Social media sites are dangerous too – esp. watch what you put on Facebook, it’s been in the news recently as a treasure trove for ID thiefs. You can see why. I’m amazed at some of the info people have put up there. ID thiefs could easily “stalk” them and intercept mail etc. Right from the beginning I was talking about that problem. I agree with Baker, that list was very helpful.
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Ryan P Smith Reply:
May 8th, 2009 at 5:18 pm |
@moneyenrgy
You are right, Linked In is a great source for identity thieves. It is a fine line between be “social” and accessible to being a target.
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May 7th, 2009 at 10:27 pm |
@ Baker –
I get surprised how people handle their personal information, so I had to write this. Some of my coworkers will fax a copy of their license and social to a bank… and then forget the copy in the fax machine :/ That’s one common sense change!
@ MoneyEnergy –
Good point, I was just discussing this with a friend. I can’t believe how people put their addresses and phone numbers on facebook with no privacy settings :/ Do you really want ANYONE to know you live at 123 Fake St Apt 803 w/ phone number 111-222-3333?
Ah! Thanks for commenting guys!
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May 8th, 2009 at 2:19 am |
This is in common domain that there are people out there who are out to make merry at your expense.. still people fail to take the requiste precautions.. identity theft could easily be avoided if we follow simple common sense approach to its prevention as is mentioned inthis article. VEry well written and informative article. Thanks!!
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May 10th, 2009 at 2:13 pm |
“They get information by hacking into businesses or other institutions (like universities or office buildings) records or computers.”
HAHAHA… This just happened to me @ UC Berk =)
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May 11th, 2009 at 8:29 am |
@ Ryan P Smith –
I would think Facebook is a bigger target. People put addresses, phone numbers, employment, education, etc. I don’t see that as much on Linkedin. But either way, your point is a fine one in re: people walking a fine line on social networking sites.
@ SJ –
You seem to have a good attitude about it, hah. Did your uni get everyone a free fraud monitoring service? My employer lost a portable HD with peoples personal information and decided it was the right thing to do to get every employee a 18-months of free monitoring.
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May 11th, 2009 at 9:39 pm |
What!? No… no such luck =(
That would however prolly break the bank considering it contains records from 1999… Instead they posted a nice site
http://datatheft.berkeley.edu/news.shtml
that provides all the news and some words of wisdom.
It was educational, seeing how you can post a fraud alert.
That and I am somewhat comforted there were that many stolen for that long; decreases odds i’ll be stolen ;-)
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May 12th, 2009 at 12:19 am |
@ SG –
Yeah, I guess it may be different for a school system. Our company has more than 20,000 employees… so I can only imagine how much they had to pay for the service. They obviously got a bulk discount, but no idea.
Just looked at the site… that is insane how long the breach lasted.
And have you ever looked at the prices of personal info on the black market? Its dirt cheap because of how hard it can be to actually use the info. You should be fine… just get a free credit report and check :)
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May 12th, 2009 at 2:02 am |
However did you find prices on such things ;-) ?
I got a credit report when I didn’t even know about this; I decided to be motivated in taking control of finances so am checking report ever 4 months lol…
I never knew about the fraud alert thing; I might end up using it depending as more information is released about the incident.
The best part is how they have a dedicated website just for the event. It’s kind of funny =)
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May 14th, 2009 at 10:34 am |
It is really bad to realize that you’re identity was stolen and used by the fraudulent people in committing crimes and using your credit before you knowing it. You really have to pay attention to any suspicious activity or signs that may prove to be an indication that you are targeted for identity theft. Always be careful.
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June 14th, 2009 at 9:09 am |
I have to say I’m really impressed with your posts and blog overall. I stumbled on your site accidentally but am now happy I did. I’ll be stopping in to read more often now. Thanks again !
Thanks,
Lou
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June 19th, 2009 at 9:48 am |
@ MyLifeROI
You know that, credit card hacking is now a common, probably largest threat for online security. Now it occurs as frequently as, that it becomes a major monster for almost all financial banks, credit card providers, retailers and also for innocent card users like you.
But if we maintain some rules we can reduces this types fraudulent.
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July 17th, 2009 at 9:57 pm |
In my recent article, I talk about the fact that online credit card theft often results in 600 hours of work on the victim’s part to fix the damage. Amazing isn’t it? What could you have done in those 600 hours?
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