Since we've continued learning about new -and sometimes creative- examples of scams posing serious risks for seniors as well as attempts to prey on people's candor and greed (we should not forget the already famous affairs involving Bernie Madoff and Allen Stanford that caught many people off guard), even though learning those basic financial skills intended to help us manage our money wisely mostly involve practical subjects such as investments, returns, interest rates, savings, credit cards, debt, foreclosures, financial calculators, computers, etc, while we start the New Year, we should not forget as well the urgency to continue protecting ourselves while we're online: protecting ourselves from identity theft and phising scams.
In addition to the video (a very clear explanation) accompanying this post, let's consider the following article 2009 Identity Theft Statistics, some predictions for 2010 as well as a list of informational strategies intended to avoid identity theft.
2009 Identity Theft Statistics
Filed Under Identity Theft
Identity theft is defined as the process of using someone else’s personal information for your own personal gain. The Javelin Strategy & Research Center has been studying identity theft closely since 2004. Each year, they release their findings. Their 2009 study reveals that:
· Identity theft is on the rise, affecting almost 10 million victims in 2008 (a 22% increase from 2007)
· Victims are spending less money out of pocket to correct the damage from ID theft. The mean cost per victim is $500, and most victims pay nothing due to zero-liability fraud protection programs offered by their financial institutions.
· 71% of fraud happens within a week of stealing a victim’s personal data.
· Low-tech methods for stealing personal information are still the most popular for identity thieves. Stolen wallets and physical documents accounted for 43% of all identity theft, while online methods accounted for only 11%.
Types of Identity Theft
ID theft can happen to anyone, and it can come in all shapes and sizes. For example, your credit card digits could be stolen and used to make online purchases; a thief could impersonate you to open up a loan in your name; a felon could commit a crime and pretend to be you when caught; or someone could use your personal information to apply for a job.
Here’s a brief overview and description of each type of identity theft, based on Federal Trade Commission complaint data:
· Credit Card fraud (26%): Credit card fraud can occur when someone acquires your credit card number and uses it to make a purchase.
· Utilities fraud (18%): Utilities are opened using the name of a child or someone who does not live at the residence. Parents desperate for water, gas, and electricity will use their child’s clean credit report to be approved for utilities.
· Bank fraud (17%): There are many forms of bank fraud, including check theft, changing the amount on a check, and ATM pass code theft.
· Employment fraud (12%): Employment fraud occurs when someone without a valid Social Security number borrows someone else’s to obtain a job.
· Loan fraud (5%): Loan fraud occurs when someone applies for a loan in your name. This can occur even if the Social Security number does not match the name exactly.
· Government fraud (9%): This type of fraud includes tax, Social Security, and driver license fraud.
· Other (13%)
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