Forms of Identity Theft Fraud

Can you imagine getting pulled over for speeding and finding yourself put in jail for three days because of a case of mistaken identity?

That’s exactly what happened to Stancy Nesbit . She got pulled over for speeding, and was arrested for possession of cocaine. Some other woman had been arrested for possession of cocaine, gave Nesbit’s name, and then failed to show up for her court date. The judge issued a warrant for Stancy Nesbit’s arrest – and the REAL Stancy Nesbit found herself in jail trying to prove what happened. The City of San Francisco took four years to get it straightened out – in the meanwhile she was arrested or detained a total of seven times.

But most identity theft does not end up with the innocent victim going to jail.  Most identity theft is not done to evade criminal prosecution, but rather it’s done as a form of theft. Cleaning up the mess after someone has stolen your identity can be a difficult, unpleasant, and time-consuming task.

The US government monitors identity theft and fraud.  The Federal Trade Commission tracks seven different types of identity fraud:

  • Government documents or benefits fraud
  • Credit card fraud
  • Phone or utilities fraud
  • Employment-related fraud
  • Bank fraud Loan fraud
  • All others

The most well-known form of identity theft is undoubtedly credit card fraud. The thief does not need your actual physical credit card – it’s enough to have the information on the card.

There are many ways that thieves can get credit card numbers.  Sometimes hackers will manage to hack into a company’s database and find a treasure trove of credit card numbers. Other times it’s a very low tech procedure: for example, a waiter in a restaurant can write down the credit card information when he takes a card to pay a bill – or even faster, take a picture of the card with his phone.

Clearly, the best way to protect against credit card fraud is to treat your credit card numbers carefully.

Until 2008 credit card fraud was the most common form of identity theft. However, over the last several years, credit card companies have gotten increasingly sophisticated at sniffing out thieves. That’s why you are much more likely to get a phone call from your credit card company if you try and buy something that would be very “out of the ordinary” from your usual buying pattern. As a result of the efforts of the credit card companies, credit card fraud is way down.

Nowadays, the most common form of identity theft is government documents or benefits fraud. At the same time that credit card companies have gotten smarter about how to catch thieves, the thieves have gotten smarter about how to rip off the government.

The most common form of government benefits theft is using other people’s social security numbers to file false tax returns. The IRS assumes most people aren’t thieves, which is why you can get a tax refund a few weeks after filing your return. They’ve almost made it too easy for the thieves, because until now they didn’t even check the records from employers to verify that the employer actually withheld the taxes for which a return claims a refund.

Most victims of this type of fraud don’t discover it until they file their own legitimate tax return – and the IRS says “sorry, you don’t have a refund coming, you already received one.”  Straightening out the mess with the IRS and getting your legitimate tax refund is a process that generally takes months to work out.

You should not give out your social security number unless it is a real legitimate request.

Phone or utilities fraud is when someone uses your personal information to set up utilities accounts – home or cell phone, water, cable, gas, etc. It’s pretty easy for thieves to set this up because in many cases all that’s needed if your name, address, and phone number. The best way to avoid utilities fraud is to keep close control on your personal information.

Employment fraud is when someone, typically an illegal immigrant, uses your social security number to get a job. This can cause many problems for the victim, including tax audits, lost government benefits, errors in government records, etc., that can take years to fix.  And once someone has gotten a job with someone else’s social security number, it’s not unusual that they continue with the phony identity for other purposes such as getting credit cards, utilities, etc.

Bank fraud identity theft is when someone uses your personal information to get access to your bank account.  There are many scams that thieves will use, including sending emails that look like they come from your bank asking you for your password.  You should never enter your bank account password or user ID anywhere except on the bank’s website when you have navigated there directly yourself.

Loan fraud identity theft is when someone uses your identity to get a loan from a bank or other institution, and then skips out leaving you the bills.

The standard precautions for avoiding identity theft all apply – be very careful with your personal information. Identity theft fraud can take other forms as well – this article highlights the most common ones.

There are several things you can do to avoid becoming a victim:

  • Shred any documents that have your personal information in them. Thieves don’t mind “dumpster diving” to hunt for personal information.
  •  Read your credit reports, bank and credit card statements, etc. Noticing that you’ve been a victim of identity theft early can help minimize the damage.
  • Don’t respond to emails or other messages asking for personal information. Legitimate businesses will never do that.
  • Use passwords that mix numbers, letters, and special characters. Don’t use the same password for more than one account, and guard the passwords carefully.
  • Don’t send personal information to a website that is not encrypted – make sure the address starts with https – the “s” stands for “secure.”
  • Keep your anti-virus, anti-spyware, operating system, etc., software up to date.
  • If you have been a victim of identity theft, flag your credit reports, create an identity theft report, and contact an attorney.

About the Author Nussin S. Fogel, Esq., has been practicing for over 25 years as a New York slip and fall lawyer. Mr. Fogel founded Fogel Law, a firm specializing in Motor Vehicle Injuries, Slip and Fall Accidents, and other areas of Personal Injury Law. He has published on various aspects of Personal Injury Law across the web.

About the Author

Lana is a real life Identity Theft Victim. Identity Theft Manifesto is a result of her own struggles to clear her credit, her name and reputation. She is on the mission to research, learn more and educate her readers about ID Theft Crime.