Saturday, November 14, 2009

Identity theft booms, even as thieves rely on old-fashioned methods

By Andrea Leptinsky

Identity theft skyrocketed last year in a huge about-face for fraud trends, insurance giant Travelers reported.

And while increasing in number, identity theft incidents also seem to be increasing in simplicity. Identity thievery has gone old school, with thieves grabbing wallets or laptops rather than sifting through electronic information to snatch personal data.

Identity fraud increased by 22 percent in 2008, and an identical increase is expected in 2009, Travelers said in a Nov. 2 report based on claims data from the insurer. That's an alarming change from previous years' identity theft statistics. From 2004 to 2008, the number of identity theft incidents had been on a steady decline, thanks in part to increased consumer awareness and new technology.

Why the increase? Travelers attributes the boom to the difficult economy. They say people -- perhaps beset by job woes or other financial troubles -- are turning more to burglary and other so-called "crimes of opportunity" to get by. Even though online security and data breaches often earn front-page news placement with their high-priced casualties, identity theft most commonly resulted from pickpocketing, purse swiping or computer theft. In instances where victims knew their identity had been stolen, the incident was the result of personal property theft nearly 78 percent of the time. Fourteen percent of identity theft incidents came from online or data breaches, and 5 percent from postal fraud.

Once your information has been obtained, thieves tend to open up new credit cards, Travelers reports. Stolen information is used for new accounts 75 percent of the time. Twenty percent of identity thieves will instead withdraw cash from existing accounts, and 16 percent will open utility accounts in the victim's name.

Don't be a victim
Reducing the risk of falling victim to identity thieves can happen in a few basic steps:

  • Be aware. The Federal Trade Commission recommends studying up -- be aware of how information is stolen and what you can do to protect your own. Monitor your personal information to check for any irregularities and to uncover any problems quickly.
  • Guard your Social Security numbers and financial information. Do not carry these types of information in your wallet or purse. Also, shred any financial statements or credit card applications you don't need.
  • For extra protection, invest in identity fraud expense coverage. This type of coverage offers high-quality resolution services that can help resolve incidences of identity theft much faster than normal processes.
"Our data indicates that identity fraud can happen to anyone at any time," says Joe Reynolds, identity fraud protection manager at Travelers in a statement. "It really becomes a matter of being vigilant and prepared in the event identity fraud happens to you."