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CHIPS Articles: Facts About Identity Theft

Facts About Identity Theft
By Barbara Figueroa, Lani Gordon, Jim Hoskins, Steve Muck, Charles H. Vaughan - January-March 2011
How do thieves steal an identity? Identity theft starts with the misuse of an individual's personally identifiable information (PII), such as name and Social Security number (SSN), date of birth, mother's maiden name, credit card numbers or other financial account information. For identity thieves, this information is as good as gold.

Skilled Identity Thieves May Use a Variety of Methods to Obtain Personal Information, including:
• Dumpster Diving: They rummage through trash looking for bills or paper with personal information on it.
• Skimming: They steal credit/debit card numbers by using a special storage device when processing a card.
• Phishing: They pretend to represent financial institutions or companies and send spam or pop-up messages to trick people into revealing their personal information.
• Changing Addresses: They divert billing statements to another location by completing a change of address form.
• Old-Fashioned Stealing: They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit card or loan offers; and new checks or tax information. They steal personnel records or bribe employees who have access to PII.

Useful Identity Information:
• The Federal Trade Commission (FTC) reports that approximately 3.6 percent of the U.S. adult population has experienced identity theft. Identity theft of children and the deceased are on the rise. Additionally, medical identity theft is a growing concern.
• The most common forms of identity theft are the fraudulent use of PII to open a new line of credit and the use of credit/debit card account numbers to make purchases.
• The full SSN, linked to a name, is a key element to committing identity theft.
• Crimes occur more often offline than online.
• A significant amount of PII, including Social Security numbers, can be found in public records.
• Risk is greatest when information is stolen by someone targeting the data, e.g., by a hacker or a burglar.
• Most victims find out about identity theft through an adverse action such as a creditor demanding payment on a delinquent bill.
• Half of known identity thieves are known by their victims; one-fourth are dishonest employees.
• The President's Identity Theft Task Force recommended that federal agencies reduce the unnecessary use of Social Security numbers, which it calls "the most valuable commodity for an identity thief."
• Phishing attacks aimed at identity theft affect one in four individuals per month.
• Two-thirds of attacks appear to be from legitimate companies.
• Consumer credit card liability is $50.
• Consumer debit card liability is $50 if reported within 48 hours, $500 if reported within 60 days. After 60 days the victim may lose all the money in the account — in addition to the overdraft amount.
• The Identity Theft Enforcement and Restitution Act of 2008 makes it easier to prosecute thieves and compensate victims for time and trouble.

Once they have your personal information, identity thieves use it in a variety of ways.

Credit Card Fraud:
• They may open new credit card accounts in their victim's name. When they use the cards and do not pay the bills, the delinquent accounts appear on their victim's credit report.
• They may change the billing address for a credit card so that the victim no longer receives bills, and then run up charges on the account. It may be some time before the victim realizes there is a problem because the bills are sent to a different address.

Government Documents Fraud:
• They may obtain a driver’s license or other government-issued ID card in the victim’s name but with their photo.
• They may use their victim’s name and SSN to get government benefits.
• They may file a fraudulent tax return using their victim’s information.

Phone or Utilities Fraud:
• They may open a new phone or wireless account in their victim’s name or run up charges on an existing account.
• They may use their victim’s name to get utility services, like electricity, heating or cable television.

Bank/Finance Fraud:
• They may create counterfeit checks using their victim’s name or account number.
• They may open a bank account in their victim’s name and write bad checks.
• They may clone their victim’s ATM or debit card and make electronic withdrawals in their victim's name, draining the accounts.
• They may take out a loan in their victim’s name.

Other Fraud:
• They may get a job using their victim’s SSN.
• They may rent a house or get medical services using their victim’s name.
• They may give their victim’s personal information to police during an arrest. If they do not appear for the court date, a warrant for arrest is issued in their victim’s name.

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Related DON CIO Policy

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