Identity theft occurs when someone uses another person’s personal information without their permission to commit fraud or other crimes. Over the past several years, identity theft has been a growing issue among consumers and businesses alike, as access to personal information has become more readily accessible.
While many businesses and government institutions are getting better at securing personal consumer information, there are still many threats that face us every day.
Some studies in the past year indicate that identity fraud is a decreasing problem, but the Federal Trade Commission disagrees, noting that the crime was their #1 complaint for the 7th year in a row in 2006.
They received 250,000 complaints of identity fraud in 2006, a number which accounts for 36% of their total complaints, and a number which is still quite small compared to the estimated 10 million Americans who fall victim to this crime each year.
Even if the crime did decrease somewhat in 2006, it is hardly anything to get excited about, as the estimated losses in 2006 were approximately $50 billion, a number not much lower than previous years.
The vast majority of these losses (around $45 billion) are felt by businesses and financial institutions) leaving the rest for consumers to bear.
The studies on identity theft in recent years suggest that the average victim spends around $6,000 and 25-30 hours recovering from identity theft.
Depending on the type and extent of the crime, it may even take years to sift through the mess. It takes a very long time to eliminate negative information from credit reports, even if you have shown proper evidence of the fraudulent information.
In some cases, people even find themselves having trouble getting loans, fair insurance rates, obtaining employment or opening accounts for years after they discover the theft.
Most affected people find out that they have been victimized suddenly and unexpectedly through such means as being denied for employment, denied credit or contacted by a collection agency or even the police.
The news is shocking and confusing, and often, the victims don’t know where to begin to resolve the problem.
Proactively educating yourself and protecting your personal information will be invaluable should you become a victim.
Not only will it help you understand and be prepared for what has occurred, but it will help you catch fraud early, saving you a wealth of money and time.
In fact, studies show that victims who learn of the crime within five months experience significantly lower losses than those who learn of the crime with more months or even years.