 Over the entire identity theft landscape, what one aspect do you think would still surprise most people?
 New account fraud. Almost all of the data we have on identity theft involves existing account fraud -- someone stealing your credit card and buying things, stealing your bank account and taking money out, adding a cell phone to an existing account. New account fraud is a little more complicated and it's a lot harder to spot.
This would be someone taking out a brand new credit card in your name or opening up a brand new bank account at another bank in your name. You won't get any indication of that like you would with existing credit card fraud where those charges show up on the bill you get every month. With new account fraud, when someone opens up a credit card in your name, they're very likely to have it mailed to another address. Depending on how they do it, it may not even show up on your credit report. That's a much bigger hassle to discover, and much more likely to show up eventually as a negative on your credit report.
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Ah, that Holy Grail, the credit report. |
Yes, I made this point in my book but it seemed to fall flat: None of this would be a problem for the victims if there weren't credit reports. Because you're not out the money in most cases but you are out the reputation. I feel like the credit bureaus have not only gotten a free pass on this, but they make money on it; they sell these protection services. It's one of those things in the business world that have gone on for so long that nobody questions them anymore.
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What can people do to protect themselves? |
The credit freeze is really useful. It costs money, though. It's not free, so it's one of those things that I recommend with my teeth gritted. It is a little bit of a hassle, although it has gotten much easier thanks to some state laws. Utah passed a law that said you had to be able to do this in 15 minutes, which is great because the real concern is that you're going to someday want to buy a car and your credit report will be frozen and you won't be able to do it. Not enough people have used credit freezes yet for me to really know how workable they are, and that concerns me.
But there aren't 10 ways to protect yourself. You can shred. Using online billing is probably the best thing you can do, but that's not actually prevention, that's detection. Credit freezes can work, but they only work for certain kinds of identity theft; they wouldn't stop (thieves) from getting a driver's license in your name, for example.
And another underreported, but very prevalent form of identity theft, is the use of Social Security numbers to gain employment by folks. Somewhere around 8 (million) to 10 million people a year suffer from what's called SSN-only identity theft. There's no way to prevent that. Once your number is successful, it's often used again and again. I talked to one woman who had her Social Security number used 47 times. You know how she detected it? She applied for a job at a Target and they said, "We're sorry, we can't hire you. You already work here."
| -- Posted: April 21, 2008 |
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