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THE GOOD, BAD AND UGLY OF ID THEFT TRENDS

Source:  Indy Star

Posted on March 6, 2009

      It seems as if a month can't pass without word of some new research report on identity theft. The results are rarely good.

      Identity theft is on the rise, up as much as 22 percent in 2008. Fraud of all stripes is up, too. The reason, experts say, is the recession is pushing criminals to be more brazen.

      Tax returns are being filed under victims' names to fraudulently claim tax refunds. Employment fraud, such as using a victim's Social Security number to work or get benefits, is up, too, according to last week's study from the government-run Consumer Sentinel Network.

      And let's not forget the spike in crimes of opportunity, such as purse snatchings. Such crimes were tied to 43 percent of identity theft cases last year, up from 33 percent in 2007, according to a survey last month from Javelin Strategy & Research. Yes, it's all doom and gloom. On the surface, anyway.

      The deeper truth is that the Web - once the main culprit for identity theft - is helping consumers prevent such crimes at perhaps a faster rate than ever before.

      Consumers who bank online are checking their accounts every week or every few weeks because funds are tight, said Linda Foley, founder of Identity Theft Resource Center in San Diego (www.idtheftcenter.org). They are watching where every penny goes, and it's easier - for better or worse - to notice a transaction that shouldn't be there.

      I know this is definitely the case for me. I've caught at least two small, but still fraudulent transactions in the past six months. And I've had to cancel at least one credit card.

      The same economy that's making criminals more active also is forcing consumers to get off their butts and be more vigilant about their finances. "People are looking at their credit reports - finally," Foley said.

      They're uncovering cases faster and limiting their losses.

      This could explain why Javelin, in its report last month, said that although the number of identity theft cases jumped 22 percent last year, to 9.9 million, the cost per incident fell 31 percent, to $496.

      The Consumer Sentinel Network, which is a database of consumer complaints collected by several federal agencies, had similar tallies.

      Another thing working in consumers' favor is that businesses are being more vigilant about the lines of credit they extend and the bills that their customers then rack up. In many cases, there are now more steps to verify an application for a credit card.

      "Consumers get a call and (businesses) ask: 'Did you apply for a credit card?' " Foley said. If not, that could prevent identity theft right there. Businesses, she said, also are turning delinquent accounts over to collections agencies in three months instead of four to six months.

      Why is that good? Well, if you're late on your bills, I suppose that's bad. But if someone fraudulently started an account in your name, you might not hear about it until it goes to collections, and you'll be hearing about it sooner rather than later. This could be why the Consumer Sentinel Network's report said credit-card fraud is still a big, but steadily shrinking cause of identity theft.

      Other types of fraud are picking up the slack, though. So, your best bet is to stay vigilant. Stop carrying your Social Security card in your wallet or purse. Shred important documents. Protect your computer with a firewall and anti-virus software.




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