Preventing Identity Theft

There are reports indicating that up to an estimated ten million Americans are being victimized on a yearly basis costing them close to five billion dollars out-of-pocket expense, which on average becomes $500 individually. The source of the report, Federal Trade Commission (FTC) also states that the average yearly loss of businesses and financial institutions on fraudulent purchase is close to $48 billion, which translates to $4,800 on average.

The total sum is huge that will not be recovered for the most part unless the appropriate arrangements had been put in place in advance. The problem is exasperated on the Internet where the identity thieves could easily apply sophisticated technology to steal IDs while people are shopping or doing any kind of business online where giving out personal information is involved, making it very precarious.

The old methods of preying on what people throw out is slowly becoming obsolete and the new sophisticated methods are applied on the Internet while people are doing so many different things. From buying, to paying bills, to doing their banking online, there are sophisticated technologies that could get all the sensitive information without the owners knowledge and put it in the hands of those who can use it fraudulently.

One of the recent renowned method is known as “phising” where an individual will receive an email presumably from the financial institutions where he or she keeps account with, asking them to update or upgrade their bank account or a credit card, and when they comply the information will end up in the hands of thieves who would not hesitate to empty the account using the information. Or they can use the other personal information for various fraudulent purposes.

That has evolved into what has become to be known as “pharming” where the thieves will create fake Web sites that are identical with a given financial establishment and while unnoticing customers try to log in, that information will reach the thieves ending up doing whatever they want once they have access to the account. If there is anything that will save the customers is to know the existence of “phising” and “pharming” so that they will be careful whenever they try to log into their account or whenever they reply to emails asking them personal information.

According to various source the other most common method of stealing financial information is while people swipe their cards at a gas station where the information is sent via satellite for verification. The identity thieves have come up with programs that enable them to divert the account information to them while at the same time the verification process goes through, and it takes place without the knowledge of anyone. One way fighting this crime is to use a debit card where the amount of money loaded will be controlled so that the damage could be kept at a minimum, even if according to various reports credit cards are recommended, because credit card companies refund immediately whenever fraud is reported, whereas debit card issuers will take them a while.

The other known method where sensitive financial information will be lost is while swiping the card into small machines that will take the cards information, while in the process of making payments, and to do that in most cases the cards have to leave the customers or it has to be done when the customers are not noticing what is taking place. To prevent such an incident, customers will have to watch what is done with their cards, and if they see something out of the ordinary, either they have to try to prevent it or if that is not possible and they become suspicious, they will have to report it either to the issuing financial institution or to the credit bureaus, which will put a fraud alert on it.

There is also a keystroke catcher, according to various reports, where it is possible to attach the device to the cable that goes between the keyboard and the computer. The devices that look like connectors cost as little as $100 and would record every keystroke made. To avoid this particular problem people would have to avoid using public computers to do their banking or purchasing online.

The other one that could expose a big number of people is data given out to a big number of businesses in the processes of doing business. It is the responsibility of those who are gathering the data to guard it, but when there is compromising the damage could be devastating. In most cases, when that happens most of them take a major step, like for example changing all cards if the data of a financial establishment had fallen into the wrong hand, which means users do not have control except to comply with whatever is asked of them to avoid further damage. But users always can control how much information they should give out, because most services do not require to know for example the Social Security Number, and if they do they should settle with the last four digits, the same could be applicable to a license number too.

The first precaution users have to apply is there are certain activities, crime preventing sources are advising that they will have to avoid while they are on the Internet to be on the safe side. Sending a Social Security Number or a credit card number via email is discouraged, because it is possible to divert it into the wrong hand. The recommendation for the most part is shopping at well-known companies only, as well as making sure the particular site they are doing business with uses encryption software for processing the transaction. Companies like Versign give security verification and looking for their sign on the sites is essential, as well when the padlock icon is on display on a site, it means the transaction made on the particular site is safe. People have to guard their Internet password and changing passwords regularly is recommended, while at the same time making the password difficult deters from being guessed.

In addition, checking an account regularly, even on a daily basis to see if something unusual had taken place is among the recommendations. On top of that, it is possible to pay $100 a year to a company known as Equifax that will provide unlimited credit reports. It will also send out alert whenever a change occurs on an account. It also provides a $20,000 identity theft insurance and will avail a special hotline that will facilitate things in case someone stole the identity.

The insurance covers expense up to $4,000, whether it is a lost wage or other related expenses. Once a customer registers with one of these key companies, known as credit bureaus the information will be available to the other two companies, called Experian and TransUnion. TransUnion has a similar insurance program of its own that costs $44 a year and it will cover up to a loss of $25,000 caused by identity theft. These three companies are very important because once a fraud alert is filed with them, everything that has to do with an account or an ID will reach them, and they can prevent anyone from opening an account by using a stolen ID or if anyone wants to withdraw money from an account that is on a fraud alert the account holder will be informed immediately.

On a recent survey that was commissioned by Sun Microsystems Inc and made by Harris Interactive Inc stated that 34 percent of those who were surveyed said either they themselves had been a victim of identity theft or they know someone who was. According to the same report, two-thirds of adults surveyed said they will shop on the Internet for the holiday season, which makes taking the required precautions an important measure, as most of those who were surveyed said, all they will do if their personal information is compromised is to change financial institutions.

However, if there is a loss that needs recovery, mixing what the credit companies are offering, an immediate refund of a disputed transaction, with the affordable insurance could go a long way. Money that is taken out of a bank account will require a lot to have it retrieved back. The same applies if someone goes into a spending binge by obtaining a line of credit by using a stolen identity, where a lot will be involved in order to clear the incident out of one’s credit history, which could be cushioned by paying for the generous insurance policy, that might even cover the loss. Consequently, especially the second one is highly recommended.

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