How to Foil Identity Thieves

by William J. Lynott

The identity thieves are looking for you.

They love professionals and small-business owners because they make such profitable victims. If they catch up with you, they could destroy your personal financial standing—even your business.

Like all predators, identity thieves stalk their targets, strike without warning and then disappear into the night with their bounty. Their attacks produce delayed reactions. It may be months, even years, before their victims become aware of their plight. Then, the painful road to financial recovery can take many more months, or years, to travel. The ultimate cost to the victims and their families often proves to be a financial and emotional catastrophe.

These criminals would like to make you their next victim, and national statistics suggest that they have a good chance of doing so. According to the latest government figures, identity theft is now America’s fastest-growing crime. According to a Federal Trade Commission report, almost 10 million Americans fell victim to identity thieves in 2003 (the last year for which figures are available).

Identity thieves don’t have to be smart

Unfortunately, identity theft is an easy crime to commit. Using personal information about you, the thief assumes your identity, obtains false ID, and sets out to purchase huge amounts of merchandise in your name. It wasn’t you who bought all those products and services—tens of thousands, perhaps hundreds of thousands of dollars worth—but now it’s up to you to prove that. And that job often turns out to be far more difficult than you could ever imagine.

Jan Jacobs, of Burlington, Vermont, is still struggling to repair the damage caused when her identity was stolen. “My first hint of trouble came in the form of a letter from a credit-card company saying that they had been trying to reach me by telephone,” says Jacobs, a tent-company employee. “It turned out that someone was attempting to open a new credit card in my name. Until then, I had no idea that I had been victimized.”

Jacobs took corrective action immediately. “I called the credit bureaus and asked them to put a fraud alert on my accounts, spent two hours on a consumer hotline trying to find out what to do next, and launched myself on what seems to be an endless route of tedious paperwork and phone calls.”

She feels that she’s making progress in getting her name cleared, but was discouraged recently when she ran into trouble trying to get a car loan.

John T. Stevens, Jr., of Maryland, provides an even scarier example of the devastation wreaked by identity thieves. Stevens was at his Maryland home on a day he remembers well. The phone rang. When he picked it up, his nightmare began.

The call was from an investigator for NationsBank asking why Stevens was “delinquent” on payments for a $27,000 Jeep Cherokee, bought in Dallas a year earlier.

“I don’t have a Jeep Cherokee,” Stevens protested. “And I haven’t set foot in Texas in over 30 years.” True, but his name was on the contract, and so was his Social Security number.

Soon thereafter, Stevens and his wife learned that someone had bought four more cars and other items worth more than $113,000 in their names. Their excellent credit had been destroyed. “After a lifetime of integrity,” says Stevens, “I was being essentially accused of embezzlement and treated like a deadbeat.”

It took three years of paperwork and $6,000 in legal fees for Stevens to clear up the mess. In the meantime, he was denied a loan to build a vacation home, harassed by debt collectors, and forced to pay cash for everything he bought. The crowning blow came when their home was put under surveillance by investigators looking for the missing Jeep.

Other identity-theft victims have had their drivers’ licenses suspended, been turned down for jobs, even jailed for offenses committed by total strangers.

You may already be a victim

The FTC reports that many victims don’t discover their plight for more than a year, while some don’t for as long as five years.

Jeanine Guilfoyle, an office worker in Bergen County, New Jersey, became a victim of identity theft nearly two years ago. She says she will never forget the experience.

“I received letters from several department stores. When I opened them, I found new credit cards with my name on them that I had not applied for. When I called to cancel the cards, I was told they had already been maxed out. Apparently the thieves applied for instant credit at the stores and immediately spent the limit.

Guilfoyle says that she is still paying the price for her identity theft. “I had to call each of the stores’ credit departments, call the credit bureaus, get a new driver’s license, and contact Social Security. It took months of paperwork, phone calls and correspondence. I finally got things straightened out, but not before I was stressed to the point that I broke down.”

How can this happen? How can a criminal you have probably never met assume your identity and cause you so much grief?

The magic key that allows a thief to open the door to your life is probably somewhere in your purse or wallet right now. It’s your Social Security number.

Of all the tools coveted by identity thieves, including drivers’ licenses and credit cards, your Social Security number is the most sought-after prize. It’s astonishingly simple to steal a person’s identity starting with nothing more than those nine digits. With that information, the thief can easily apply for and obtain credit cards and drivers’ licenses in the victim’s name.

“Phishing” for information

Modern technology, the Internet, and our ability to gather and store huge amounts of personal data on individuals have all contributed to the evolution of identity theft.

In the latest variation of identity theft, a technique known as phishing is rapidly becoming a major threat to consumers. To avoid becoming a victim, watch out for e-mails designed to look like messages from legitimate companies and government agencies. These messages often provide direct links to Web sites that have been expertly designed to look like legitimate company sites. This is where you must be especially vigilant. These counterfeit Web sites not only look like the real thing, they often make use of legitimate logos and trademarks.

Using a ploy such as “updating our records,” e-mail predators usually ask for sensitive information such as Social Security number, credit card numbers, even mother’s maiden name. No legitimate company or agency will ever ask you to send that kind of personal information to them in an e-mail. If you respond to such a request, you almost surely will be targeted as an identity-theft victim.

Experts suggest that you never click on a link to a Web site that has been sent to you by e-mail. Instead, type in the known correct address directly into your browser

The best solution: hit the delete key, call the company directly, or forward the message to the Federal Trade Commission (alert@ftc.gov).

Perhaps the same kind of technology that has helped to make identity theft a major national problem will eventually help us to find a solution. In the meantime, take the most important step needed to keep yourself out of that kind of trouble. Get in the habit of protecting your Social Security number and other personal information as if your financial life depends on it. In a very real sense, it does.

See Issue 117