Identity theft is one of the fastest growing crimes in North America. A recent study by Javelin Research found that in 2009 ID theft affected 11.2 million consumers costing about $54 Billion! This is a staggering increase from 2008 where 9.9 million people were affected with a cost of about $48 billion. If you have ever had your ID stolen or know someone who has been through it, then you’ll know that it is one of the most stressful events you can go through. In order to prevent or reduce the chances of ID fraud, it is important to know how ID thieves steal your information and how you can protect it. Unfortunately, there really is no way to be 100% protected against this rapidly growing crime, however you can reduce your risk by understanding how your information can be obtained by ID thieves.
Trash is Gold
Your garbage can is the thieves’ goldmine. Think about all the things you throw away, receipts, bank statements, tax information, bills etc. All these contain important personal information that can be used by others. All it takes is just one letter with your name and another important personal information.
Remedy: Shred sensitive material before you dispose of them.
You’ve Got Mail
Your mail is another goldmine for ID thieves. Stolen mail is one of the most popular methods of stealing identities; your mail contains all the personal information someone would need. All the marketing material you receive from companies and banks contains vital personal information.
Remedy: Most companies give you the option of receiving your mail online; view your banking and credit card statements online. You might also want to consider having a postbox as they are often monitored and protected by the postal service. Put your mail on hold if you will be absent for a while. Do not just throw away marketing material, open and shred them first.
Another very popular strategy employed by ID thieves is “card skimming.” Skimming is when you cards information is stolen by swiping your card through a magnetic card reader, which stores/downloads your card information. The thieves can then use this info to make purchases online or even load it on another card and use it in stores.
Remedy: Be carful when handing your card over to someone else to swipe, if you notice anything suspicious contact the authorities and your institution immediately. For example, if they swipe your card more than once or drop the card and pick it up you could potentially become a victim of ID fraud. Also, when using the PIN pad cover your PIN with your hand, even if you are using an ATM and nobody is around you. Always cover your PIN because a hidden camera could have been placed to obtain your PIN.
What’s in Your Wallet?
One of the best ways to steal ID is by stealing a wallet. Think about all the things you have in your wallet like your license, health card, bankcards, credit cards, even pictures and Social Insurance Card? Imagine all the good things that one can do with all this info.
Remedy: Try to minimize what you carry in your wallet, don’t keep 3 different credit cards and two debit cards on you at all times. Never keep your PIN in your wallet.
What should be in our wallet?
- Driver’s license or other form of government issued ID
- Car registration and insurance if required by law (I often keep these in my dashboard)
- One or two credit/debit cards
- Any other personal identification document you need on daily basis.
You should NOT keep the following in your wallet:
· Social Security/Insurance card
· Excess credit and debit cards
· Health insurance cards
· Passwords or personal identification numbers (PINs)
· Any other personal identification document you don’t need on daily basis.
These are just four ways your ID can be stolen. Of course there are numerous other methods such as hacking into government and/or corporation database, stealing info through employer, Phishing attempts and many others. Although you cannot stop this trend nor can you be 100% safe against ID theft, you can try to prevent it and minimize the chances that your ID will be stolen.
Has your ID ever been stolen or do you know anyone whose ID has been stolen? What other forms of ID theft do you know of? What do you do to prevent your ID from being stolen?
Ray is an ex-financial adviser and the founder of Financial Highway. Currently working in the financial industry and working towards completing his Chartered Financial Analyst, CFA, designation.