Identity theft consists of various types of crimes of stealing credit card number to open accounts in the name of the victim. Nearly 15% people complain that their identities were stolen and used for reasons other than getting credit, like procuring government documents, perpetuating tax fraud, or misleading police. It is quite commonplace for the culprit to give a false name and Social Security number on being arraigned for a traffic violation.
Thieves cause the most harm when they take over your identity completely. By feigning to be you, they open new credit card accounts, avail of an auto loan, get medical treatment or rent an apartment. When the bills arrive, they fail to pay. Now those delinquencies, charge-offs, collections, repossessions, evictions, and judgments show up on your credit report, thus dramatically lowering your credit score.
This modern version of theft costs about $10,000 for every victim and constitutes nearly 70% costs borne by businesses and financial institutions. The miscellaneous expenses for consumers are also quite high, around $1,200 as against $500 on an average for the other types of identity thefts. The FTC approximates that the customer spends around 30 hours on average to sort out the problems. But theft experts consider this figure as way too low. As per the Identity Theft Resource Center, most victims devote 300-600 hours sorting the various problems resulting from identity thefts.
Major portion of the victim’s time is spent in attempting to erase the fraudulent accounts from credit reports. Many victims complain that the bureaus make them run around. The bureaus’ explanation is that the lenders keep on sending the account information to the bureaus even though they have been informed about the fraudulent accounts. But ultimately the victim suffers.
Your identity can be stolen in the following ways:
1. A waiter in the restaurant to who has your credit card, disappears and scans the card through a small, hand-held device called a skimmer. The important account information recorded on the card’s black magnetic strip like your name and the account number, is transferred to the device and is used to create new cards.
2. A rogue employee working for the institution where you had submitted your application for credit, an apartment, insurance, or employment, sells your details to identity thieves or uses it to open accounts.
3. Hackers hack into the online databases that contain your personal financial data.
4. Thieves masquerading as legitimate lenders or crooked employees of genuine lenders get credit reports from the bureaus and use the details to open new accounts.
Tags: heft Problems, Identity