How to Protect Against Identity Theft

Filed in Credit Monitoring, Personal Finance by on August 20, 2013 0 Comments

Identity theft is a relatively new problem, aided by online banking systems, credit cards, and Canadian social insurance numbers. The number of incidences of identity theft has continued to grow rapidly since the first cases started showing up in the 1990’s. By 2005, the number of Canadians victimized by the crime has reached close to 4% of the population, according to studies. Millions of Canadians have been targeted and those are just the ones who realized they had been victimized. In Ontario, millions of dollars have been scammed by credit thieves. According the the Canadian Anti-Fraud Centre, a department of the federal government, new scams are popping up everyday with the goal to get you to part with your ID and money.

Identity theft creates issues that can last for a long time especially on Canadian Credit Reports. Victims are forced to endure financial losses, hours of time devoted to putting things right, and a dip in credit scores that can have a damaging effect. To make matters worse, there are also problems that can arise that the victim doesn’t realize was caused by ID theft. Those include loans being denied and job offers lost, all while someone else uses the victim’s name and credit.

The bad news is that there is no one thing you can do to protect yourself against identity theft. Thieves use all sorts of different means to get at your critical information, as well as regularly thinking up new ways to do so. If you really want to protect yourself, you need to develop a widespread plan that involves becoming somewhat paranoid about your personal information.

Read on to see the steps you can take to stop the thieves in their tracks and protect your personal info at all times.


What is Identity Theft?

Quite simply put, identity theft is a crime that falls under the fraud umbrella. The criminal will either use the personal information of the victim to create a fake identity or use credit cards to make fraudulent purchases. Either way, financial gain is usually the reason for the theft. One route they may take is using a stolen Social insurance number to obtain a credit card, which they then proceed to rack up without having to worry about a bill. Another option is to use stolen information to create fake paperwork for illegal immigrants, who can then live and work somewhere they shouldn’t.

One of the most common forms of ID theft is a stolen credit card. The thief will take the card and start making purchases with the hope that clerks don’t pay any attention to the signature or ask for photo ID. While this method requires the thief to physically get the card from you, others simply make purchases using information that does not require them to steal the card. Can you remember the last time someone asked for your ID when you were making a purchase with a credit card?  By the time the statement comes in the mail, the criminal would have been long gone.

If a thief rally wants to, he can basically take over the life of the victim. This is done by getting a fake birth certificate, before then using a stolen Social insurance number to perform all sorts of financial transactions, including loans and mortgages, in the name of the person they are targeting. The victim might even end up with a criminal record of the criminal uses the innocent persons name when they are arrested.


Credit Watch & Monitoring

The first step in protecting yourself is being vigilant about your credit. Take the time to carefully study all of your bank and credit card statements, keeping an eye out for transactions that simply don’t make sense. Thieves will try to get around that by making a series of smaller purchases that may not register with you, just to make sure your account is still active. Another to watch for is bills that don’t show up on the scheduled dates. It may be that someone is stealing your mail in order to get the information they need.

Regularly checking your credit report and score is another way to keep an eye on things. Do this with all of the major credit rating companies, with experts recommending you perform checks every three months. If you’re reading this on my site, you are already a step closer to ensuring that you continue to have good credit scores.

Simply viewing your credit report isn’t enough, as you need to understand what the results mean. The credit rating companies do not compile this information for consumer use, but rather for banks, merchants, and other organizations. It’s not always that easy to understand what the report shows. It will begin with the basics like your name, address, Social insurance number, and other personal information.

The next part of the report will feature your credit history, which each credit account known as a trade line. This will either be a company name you recognize or a series of numbers. If you have moved a few times, there is a chance that a single account will show up several times. What you should be looking for are lines of credit that you are not at all familiar with.

The final part of the report will show you how often checks have been run against your credit report. These will happen when you apply for credit, or when an employer performs the check. Again, if you see a business or employer running a check that you don’t recognize, you should view it as a red flag.


Steering Clear of Identity Thieves

The internet is a place where identity thieves can really thrive. The Web has afforded them numerous different ways to get at your information that simply wasn’t available before. These are people that are always looking for new ways to get at your personal info, and the easiest way to stop them is to make sure that you don’t give it out.

It doesn’t matter if you are posting in a forum or leaving a comment on a blog post, never give out personal information such as your address, phone number, or Social insurance number. While that seems like pretty obvious advice, you’d be surprised at how little thieves need to get at your information. You mother’s maiden name, where you went to school, or even the name of your pet can all serve as clues.

Phishing is another tactic used to trip you up. Phishing is when you receive an e-mail that appears as though it comes from a trusted source like your bank or an auction website. The body of the e-mail will tell you the system has been upgraded, and that you need to follow a link to update your personal information. While you accept the form as legitimate, the information that you fill out is collected by criminals who either use it themselves or sell it to a third party. While these e-mails may look real, closer inspection will often reveal spelling and grammatical errors, as well as large chunks of text that are actually images used to disguise links.

If you shop online, always use a credit card. You receive a level of protection that you don’t get with debit cards that are stolen. Credit card companies allow you to dispute false charges, whilst also limiting your liability on any fraudulent purchases. Make sure that any website you buy from has security measures in place. You will normally see a closed padlock on your web browser that indicates a secure site. You should also steer clear of making purchases or checking financial accounts on a public wireless network or on a public computer.

Make sure that your home computer has an up to date ant-virus software, or that is uses a secure encryption method like WPA2. Many viruses and Trojans are loaded with key loggers that can basically read everything you type, which makes it easy for identity thieves to access all the login information to your important accounts.

My Experience with ID Theft

I had my fair share of identity theft and it definitely left me feeling violated. Today I am more prepared than ever before. A few years ago I had my debit card compromised and somehow, the criminal was able to access my bank account and knew exactly how much money I had in my account. Within days, my account was wiped and I lost everything. I had credit cards opened under my name which I didn’t approve. It amazes me until today how quickly and fast it happened.  Today, I am consciously shredding any private data, and have been very careful with data over the internet. I still use online banking, but have taken additional steps to secure my finances through online credit monitoring services and not giving out my Social Insurance Number on any application. Have you run into identity theft before? What was like for you?


About the Author ()

Pat Drummond is the author of Credit Reports Canada and considered by many to be one of the leading experts on productivity and simplicity in relation to financial planning. He started this online credit score & reporting site to chronicle and share what he’s learned in over 20 years of counseling families and individuals on debt management, obtaining loans and improving credit scores.

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