Several years ago, my identity was stolen. It took several years to get everything straightened out but I still worry about it. When I changed banks to PerkStreet recently, for a short period of time, I didn’t have my identity theft protection in place because I forgot to change the debit card I used to set it up. When I realized I wasn’t protected – honestly, I freaked out until I could get my ID theft protection back in place. I was bitten once and it forever changed the way I view identity theft protection.
How identity thieves use your personal information
Once someone has accessed your personal information, he or she can exploit that information in a wide variety of ways, ranging from simple fraud (intentional deception for personal gain) to criminal impersonation to illegally using benefits that are rightfully yours. Knowing how identity thieves might use your information is an important step toward defending yourself.
ID thieves can use your information in at least TEN ways:
- Make purchases
- Withdraw funds
- Change the address on file with your creditors
- Open new credit accounts
- Obtain medical services
- Get services like utilities or cell phones
- Create false identification
- Get a job
- Use your name if they’re arrested
- Receive your benefits
Make purchases or withdrawals
With even the smallest amount of information in hand, a thief can exploit your existing bank accounts, run up debt, or living the high life at your (and your credit card company’s) expense. These fraudulent buying sprees may include expensive high-end items such as computers and other electronics, which the thief can quickly and easily re-sell for cash.
Withdraw your cash
With the proper credentials or information, a thief can withdraw money from your savings, checking, or investment accounts via ATMs, checks, online payments, or an electronic transfers. This money can then be used to do everything from buy drugs to finance illegal arms shipments to make the thief’s mortgage payment. How does THAT grab you?
Change your address
A thief can change your credit card billing or home mailing address by calling your credit card company or filling out a change of address form at the post office. Once your address has been changed, the thief can:
- Prevent you from learning of fraudulent purchases and accounts right away
- Collect the abundant personal information contained in your daily mail
- Receive and respond to preapproved credit card offers
- Receive new credit cards and checks that have been sent to you
- Receive your tax refund, social security checks, or any other mailed income
Be vigilant about your mail. Know what you should receive and when each month.
Open new accounts
An identity thief can use your Social Security number and other identifying information to apply for and open new credit accounts in your name. Types of accounts thieves tend to open are:
- Credit card accounts
- Checking accounts
- Car loan or other loan accounts
Thieves typically make account applications using a fraudulent address, preventing you from learning of the accounts’ existence right away. When these accounts go unpaid and become delinquent, a collection or repossession agency might be notified, and the delinquency will be recorded on YOUR credit report, damaging YOUR credit score.
Obtain medical services
Thieves have been known to use your information to obtain medical services at emergency rooms. They typically will use your medical insurance card to run up huge bills for fraudulent injuries or use your insurance to obtain prescription medications which can then be sold … or used. These huge bills can have a very detrimental effect on your employer, who usually handles your medical insurance. How? One of the determining factors for insurance premiums is the group’s claims history. If an ID thief ran up a $50,000 medical bill using your information, you, your employer, and your employees could be paying for it through higher premiums next year.
Thieves can use your name, a fake mailing address, and other personal information to set up service accounts, including:
- Utilities (gas, electric, oil, water, etc.)
- Cable or satellite television
- Telephone or cell phone
- Internet service
When the thief fails to pay, guess who’s credit is damaged?
Create false identification
The manufacture and sale of false identification is a thriving underground business. Thieves who want to create false driver’s licenses and IDs try to get access to what is called “breeder documents” — documents containing personal information that can be used to create a variety of different types of false ID. The most sought-after breeder documents are:
- Social Security cards
- Birth certificates
Thieves can use these documents to commit various types of fraud, such as:
- Altering or selling existing identification – Stealing your driver’s license or passport and then attempting to alter it, or selling it to someone who will alter it.
- Creating counterfeit identification – Using the information in your documents to create authentic-looking identification using readily available technology, such as scanners and personal computers. These fake IDs probably wouldn’t hold up to the scrutiny of most law enforcement officers but will easily get by a busy cashier, typically untrained in security issues.
- Obtaining fraudulent identification through a legitimate venue – Using your personal information and documentation to obtain a driver’s license or passport that shows the thief’s picture but your name. These will get past law enforcement.
Get a job
Thieves who cannot secure employment with their own identity (due to a criminal record, residency status, etc.) may try to secure employment using your name and SSN. When the employer reports the thief’s earnings to the IRS on your SSN, the government may think you’ve failed to report all your income. If the thief files a tax return to obtain a refund, it will appear as though you’ve filed twice. Talk about a fiasco. Then guess who would be expected to show up at the IRS audit?
Use your name when arrested
In the most insidious cases, a thief may use your identity when stopped, questioned, or arrested by law enforcement. If the thief’s scam is successful, the consequences of the thief’s actions can affect you personally. For instance, if the thief receives a traffic ticket, the points will accrue on your license. Or worse, if the thief fails to show up for a court date, an arrest warrant could be issued for YOU.
If you later apply for a job, your application could appear to have conveniently omitted the felony “you” had, should a background check be performed.
Get your benefits
Identity thieves can use your information to obtain your Social Security benefits, pension monies, or other benefits that are rightfully yours to obtain. In one case I read about, an identity thief filed for, and received an elderly widow’s Social Security benefits. The scam was so successful that the district attorney believed the thief was the true owner! Only after the widow used a lawyer to fight back was the case resolved and the thief jailed.
How can you deter identity thieves?
- Never give out personally identifiable information unless you know who you’re giving it to, how they’ll use it, and how they’ll protect it.
- Guard your identity, treating it as a precious asset. It is.
- Join me in signing up for identity theft protection. For my money, nothing beats that peace of mind.