Criminals continue to find innovative ways to steal personal information, causing consumers to look for ways to prevent and insure against it, according to the Insurance Information Institute.
According to Javelin Strategy & Research, there was a 13 percent increase in this type of illegal activity in 2011.
To protect against identity theft, it’s a good idea to review bank balances and credit card bills to confirm that all the transactions listed are legitimate. Consumers should also be vigilant when using smartphones, tablets and other devices that store personal information digitally.
“A healthy fear of ID theft is a good thing,” Gail Cunningham, vice president, Membership and Public Relations, for the National Foundation for Credit Counseling, said in a statement. “People often become complacent, particularly with their mobile devices. When people see their wallet, credit cards or checkbook, they think of money. However, they don’t connect the dots that critical financial information may be stored on their smart phone, thus putting them at significant risk if it is lost or stolen.”
Most homeowners and renters policies provide coverage for theft of money or credit cards; however, the amount of coverage is limited (usually $200 in cash and $50 on credit cards). Once the loss or theft of a credit card has been reported to the issuing company, cardholders are responsible for only $50 of unauthorized use.
Some insurers now include coverage for identity theft as part of their homeowners insurance policy. Other companies sell it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy, which can run about $25-$50 annually.
Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. It generally covers expenses such as phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer).
Some companies also offer restoration or resolution services to guide customers through the process of recovering their identity. An insurance professional can help find out what kind of coverage exists or offer details on what additional coverage might be needed.
“Victims of ID theft are often left with lower credit scores and spend months getting their credit records corrected. They also frequently have difficulty getting credit, obtaining loans and even finding employment,” Michael Barry, vice president, Media Relations, at the I.I.I, said in a statement.
The Javelin study found that LinkedIn, Google+, Twitter and Facebook users had the highest incidence of fraud, although there is no proof of direct causation. Despite warnings that social networks are a great resource for fraudsters, the study found consumers still shared a significant amount of personal information frequently used to authenticate a consumer’s identity.
Those with public profiles (those visible to everyone) were more likely to expose this personal information, with 68 percent of them sharing their birthday information (with 45 percent sharing month, date and year); 63 percent shared their high school name; 18 percent shared their phone number and 12 percent shared their pet’s name—all are prime examples of personal information a company would use to verify someon’s identity.
The survey found seven percent of smartphone owners were victims of identity fraud, a 1/3 higher incidence rate compared to the general public. Part of this increase may be attributable to consumer behavior, as 32 percent of smartphone owners do not update to a new operating system when it becomes available, 62 percent do not use a password on their home screen—enabling anyone to access their information if the phone is lost; and 32 percent save login information on their device
One likely contributing factor to the fraud increase was the 67 percent increase in the number of Americans impacted by data breaches compared to 2010. Javelin found victims of data breaches are 9.5 times more likely to be a victim of identity fraud than consumers who did not receive such a data breach letter.
According to the survey the three most common items exposed during a data breach are Credit card number, Debit card number and Social Security number.
The I.I.I. offers following tips to help protect against identity theft:
1. Keep the amount of personal information in a purse or wallet to the bare minimum. Avoid carrying additional credit cards, social security card or passport unless absolutely necessary.
2. Guard a credit card when making purchases. Use a hand as a shield when using ATM machines or making long distance phone calls with phone cards.
3. Always take credit card or ATM receipts. Do not throw receipts into public trash containers, leave them on the counter or put them in a shopping bag where they can easily fall out or get stolen.
4. Proceed with caution when shopping online. Make sure to buy from a reputable, familiar retailer with a secure network. And never buy anything online from a site that does not have SSL (secure sockets layer) encryption installed—at the very least. It’s easy to tell if the site has SSL because the URL for the site will start with HTTPS:// (instead of just HTTP://).
5. Monitor all accounts. Do not rely on a credit card company or bank to alert of suspicious activity. Carefully monitor bank and credit card statements to make sure all transactions are accurate. Anyone who suspects a problem, should contact their credit card company or bank immediately
6. When entering names, numbers and addresses into # electronic device, keep them as generic as possible. Include only as much information as is necessary, and never use monikers like “Hubby,” “Sweetheart,” “Best Friend,” or “Mom and Dad.” Do not store important social security or banking information on a PDA or cell phone—if it is stolen, the thief will have all the necessary information to steal an identity.
7. Place passwords on credit card, bank and phone accounts. When creating a password, avoid using easily available information like a mother’s maiden name, birth date, any part of a social security number or phone number, or any series of consecutive numbers.
8. Do not give out personal information. Whether on the phone, through the mail or over the Internet, consumers should not divulge sensitive information or a social security number to someone unless it’s the consumer who initiated the contact, the other person or company are known and they have a secure line.
9. Shred, shred, shred. Tear or shred any documents that contain personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.
In order to make it more difficult for identity thieves to open accounts in a consumer’s name, the consumer can also contact the fraud department of any of the three credit reporting agencies to place a fraud alert on their credit report—by law, the agency is required to contact the other two agencies.
The fraud alert tells creditors to contact the individual before opening any new accounts or making any changes to existing accounts. The three major credit bureaus are Equifax, TransUnion and Experian.
Anyone who believes they’ve been victimized should report the crime immediately to the credit card issuer and police. Ask for a copy of the police report, which is needed to file an insurance claim, or report the crime to the FTC for their assistance. Victims of identity fraud can call the Federal Trade Commission at 877-IDTHEFT.
