Last Updated: July 1, 2010
There's good news and bad news according to a recent report on identify fraud in America.
The bad news: identity fraud became more prevalent in 2008, with nearly 10 million American victims losing some $48 billion last year. The good news is that the average loss fell as consumers and businesses are starting to detect fraud faster, according to the fifth annual study by Javelin Strategy & Research, released in February 2009.
According to Javelin, the number of victims rose 22 percent to a record 9.9 million in 2008 from 8.1 million a year earlier. In all, about one in 23 U.S. adults became victims of ID theft in 2008, with the average consumer losing $500. According to Javelin, there's a difference between identity theft and what it calls identity fraud. "Identity theft happens when your personal information is accessed by someone else without your explicit permission," the company said in a release. "Identity fraud occurs when criminals take that illegally obtained personal information and misuse it for their financial gain."
So what can you do to protect yourself against identity fraud?
According to Javelin's report, the only way to adequately safeguard yourself from identity theft is to determine where and how your personal information is being acquired. Improper use of lost or stolen wallets, checkbooks, and credit and debit cards remained the most common means of fraud, according to the report. That represented 43 percent of all identity fraud incidents in 2008. Roughly one in four victims had personal identification numbers (PIN) compromised on their ATM cards. And online fraud totaled 11 percent of cases.
Given those statistics, Steve Weisman, author of The Truth About Avoiding Scams and a lecturer at FPA conferences and learning sessions, and other experts suggest that you can reduce the risk of fraud by doing the following:
- Don't give out your personal information on the phone to someone you have not called.
- Don't' give personal information online to anyone you have not contacted directly, and be sure that the company with which you are dealing is legitimate. Also, don't share personal data with unknown emailers or on social networking sites and chat rooms.
- Check your annual credit report periodically throughout the year. It's free. Also, be sure to notify financial services providers and the Equifax, Experian and TransUnion credit bureaus if fraud is suspected.
- Don't carry your Social Security number in your wallet.
- Don't use your Social Security number for identification purposes unless you are required to do so by law. Since December 17, 2005, it has been against the law for states to use your Social Security number as your driver's license number. Be sure to get a new license number if your current license still has your Social Security number. Also, change your health insurance card number from your Social Security number.
- Take yourself off the list to receive those nuisance preapproved credit card offers. Go to www.optoutprescreen.com to get your name removed from the lists that are used to generate preapproved credit card offers.
- Check web sites that use personal data. Web addresses that begin with "https" instead of "http" are protected by Secure Sockets Layer (SSL) security that encrypts your data. Speaking of the Web, be sure to choose hard-to-guess passwords and PINs.
- Keep sensitive documents secure and be sure to shred any and all documents you don't want others to see.