As criminals get more desperate, consumers take steps to limit losses.
The Associated Press
New York
In 2008, the number of identify thefts cases jumped 22% to 9.9 millions, according to a study released Monday by Javelin Strategy & Research. The good news is that the cost per incident – including unrecovered losses and legal fees – fell 31% to $496.
One reason for the spike in cases is probably the worsening economy.
“The short story is that criminals are getting more desperate,” said Jim Van Dyke, spokesman for Javelin, which started tracking identity theft cases in 2003. Last year marked the first time the number of cases rose.
Crimes of opportunity, such as stolen wallets, were linked to 43% of cases last year, up from 33% in 2007. That might be why women were 26% more likely to be victims of ID, they reported more cases of lost or stolen information during in-store purchases.
Online access accounted for only 11% of cases, according to their survey.
Despite the growing number of victims, the total fraud amount edged up just 7% from the previous year to $48 billion. Financial institutions are taking more steps to thwart thieves, such as sending change-of-address confirmations to the original address.
This prevents ID thieves from rerouting mail to different addresses and delaying victim’s awareness that their accounts are siphoned off.
Some types of ID theft aren’t preventable. Someone could get your information by hacking into a retailers database, for instance.
And in some instances, it appears people may have been overly trusting: More than 10% of victims knew their ID thieves and the Javelin study also found ID went undetected longer and cost twice as much when victims knew their attackers.
Six ways to guard against identity fraud
1. Be vigilant. Regularly monitor your accounts. Set up alerts on e-mail and a mobile device.
2. Protect personal data. Don’t provide sensitive financial information over the Internet or phone unless you initiated the interaction with a trusted entity.
3. Move Online. Cancel paper invoices, bank statements and checks and replace them with electronic versions.
4. Check who’s watching. Be mindful of your environment and who may overhear or see sensitive information.
5. Guard Liability. Use credit card and debit cards from financial institutions that provide liability if a card is used without authorization.
6. Tap Services. Review your credit report at least once per year. You get one free report a year. Also consider signing up for credit monitoring or fraud alerts. Some services may come with a fee.
My comments: Beware of so-called friends, roommates, even relatives. Even your own children will take and use credit cards if into drugs. When it comes to money, trust no one.
Also, they blame the ID theft on the worsening economy. That may be one cause, but since it is so easy and almost impossible to get caught, this will continue to be a problem for a long time. People always want easy money, regardless of the economy. There was ID theft during the boom times, and banks were still being robbed. You can’t blame everything on the economy.
Advance Fee Scheme
An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value, such as a loan, contract, investment, or gift, and then receives little or nothing in return.
The variety of advance fee schemes is limited only by the imagination of the con artists who offer them. They may involve the sale of products or services, the offering of investments, lottery winnings, "found money," or many other "opportunities." Clever con artists will offer to find financing arrangements for their clients who pay a "finder's fee" in advance.
They require their clients to sign contracts in which they agree to pay the fee when they are introduced to the financing source. Victims often learn that they are ineligible for financing only after they have paid the "finder" according to the contract. Such agreements may be legal unless it can be shown that the "finder" never had the intention or the ability to provide financing for the victims.
Some Tips to Avoid the Advanced Fee Schemes:
· If the offer of an "opportunity" appears too good to be true, it probably is. Follow common business practice. For example, legitimate business is rarely conducted in cash on a street corner.
· Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them. Depending on the amount of money that you intend to spend, you may want to visit the business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police.
· Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
· Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address, or of dealing with persons who do not have a direct telephone line, who are never "in" when you call, but always return your call later.
· Be wary of business deals that require you to sign nondisclosure or non-circumvention agreements that are designed to prevent you from independently verifying the bona fides of the people with whom you intend to do business. Con artists often use non-circumvention agreements to threaten their victims with civil suit if they report their losses to law enforcement.
Learn how to protect yourself from online scams and what to do if you have been scammed. Click here for more information.