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Credit card fraud is biggest form of identity theft in U.S.

July 18, 2009|By BRANDON BIELTZ

Your name is part of what makes you unique.

It sets you apart from others and it is a large part of what makes your reputation.

But what do you do when your name -- and your reputation -- is in the hands of someone you've never met?

Identity theft is becoming an increasing problem in the United States.

According to Federal Trade Commission (FTC) reports, there were 31,140 complaints of identity fraud in the U.S. in 2000. Eight years later, there were 313,982 complaints nationwide, including 5,412 in Maryland, according to the FTC.

Reports show credit card fraud is the most common form of identity theft, with 20 percent of complaints of identity theft attributed to the scheme.

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Tami Nealy, director of corporate communications at LifeLock, an identity theft protection company, explained why credit card fraud is so common.

"If a thief has a name and a Social Security number, they can open a line of credit," Nealy said.

With just two pieces of information, a thief can open a new credit card account or any other line of credit, for something such as a cell phone plan, Nealy said. An account can be opened in someone's name and they can be unaware it exists until collection notices start coming in the mail or debt collectors start calling, she said.

Identity theft and credit card fraud are threats to everyone, regardless of age. Nealy said children are one of the fastest-growing targets of such schemes.

When a child's identity is stolen, it can take years before someone becomes aware of the problem. An identity stolen at 3 years old might not be discovered until the victim tries to get a student loan when he or she is 18, Nealy said.

Although identity theft can't be stopped, people can take precautions to minimize their risk, Nealy said.

Jay Foley, executive director of the Identity Theft Resource center, said in an e-mail, "The individual only controls about 15 percent of their total information."

The other 85 percent, he said, is shared among the employers, doctors and everybody else to whom someone has given his or her Social Security number or other personal information.

Foley and Nealy suggest people be cautious when giving out Social Security numbers. Nealy suggests asking questions such as, "How do I know my Social Security number is secure?" or "Why do you need my Social Security number?" If your Social Security number is secure, it will be much harder for a thief to use your name to establish lines of credit.

Another way of minimizing risk is placing fraud alerts on credit accounts. A fraud alert is a red flag on an account that notifies the account holder if any changes are being made to the account.

Fraud alerts are free and available by calling a credit bureau, Nealy said. The alerts last 90 days and can be renewed.

Victims of identity theft should contact their bank and credit bureaus, and file reports with police and the FTC.

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