Identity Thieves Employ High-Tech Tactics

THANKS TO TECHNOLOGY advances, identity thieves no longer need to dumpster-dive in search of your private information. Now, sensitive data can easily land in their hands while you're shopping, browsing the Internet or simply visiting your dentist.

Here are five of the latest high-tech forms of identity theft, according to Truecredit, a unit of credit-reporting bureau TransUnion, along with ways consumers can protect themselves.

1. Pharming. You've probably heard of "phishing," a form of identity theft where fake emails are sent out, asking you to urgently update your bank account or credit-card information, which is then sent to identity thieves. Now phishing has evolved into "pharming," where thieves create fake Web sites similar to the Web sites of banks or credit-card companies. When consumers who don't know the difference try to log in, their account information is sent along to the thieves.

These Web sites get traffic through phishing, explains Nicole Lowe, credit education specialist at Truecredit.com, or with the help of computer viruses that automatically redirect traffic from specific Web addresses, such as those for banks, credit-card companies or shopping Web sites. To avoid pharming, look out for anything strange or new in the site's Web address, or URL, Lowe recommends. You can also browse the Web site in depth. The crooks likely haven't recreated all its layers.

2. Gas stations. Every time you swipe your credit or debit card at the gas pump, your information is sent via satellite to your bank for verification. According to Truecredit, identity thieves have now invented a way to hijack that information by modifying the program that carries out the data transfer so that your credit-card number is sent to them at the same time it's sent to your bank. While there isn't a way to detect when your data are being stolen, Lowe recommends using only credit cards at the pump as a precaution. With debit or check cards, it takes a while for fraudulent purchases to be credited back into your checking account, while credit-card companies will remove any disputed charges from your account immediately.

3. International skimming. According to Truecredit, skimming occurs when your credit card is run through a small reader, similar to those used in grocery stores, which captures your card information for future use by identity thieves. This form of fraud is common in the service industry here in the, and anywhere abroad. Be on the lookout when paying with a credit card in a restaurant that you're not familiar with, Lowe recommends. If you don't feel comfortable letting your card out of sight, use cash or walk over to the cash register to pay your bill. When traveling abroad, use only one credit card so it's easier to detect any fraudulent charges.

4. Keystroke catchers. These small devices are attached to the cable that connects your keyboard to your computer and can be bought online for a little over $100. The "catcher" resembles a standard connector, but contains a memory chip that records everything you type. It's typically used in public places where computers are available, such as libraries, Internet cafes and college computer labs. To protect yourself when using a public computer, never shop online, check your bank account, pay bills or enter your credit-card information.

5. Database theft. Chances are, your personal information is part of numerous databases, including those at your dentist and doctor's offices, your college or university admissions office, your mortgage and insurance companies, even your local Blockbuster. While there's little you can do about the way those companies safeguard your information, you can try limiting their access to sensitive data, such as your Social Security number, says Lowe. Your cable company and DVD rental store, for example, have no need to know your Social Security number and should agree to an alternative, such as the last few digits of your driver's license number.

14 Tips to Avoid Identity Theft

Identity theft again tops the Federal Trade Commission's list of consumer complaints. Frank W. Abagnale, a reformed thief, is now a respected authority on identity theft and other forms of fraud. His book, Catch Me If You Can, which details his criminal escapades, was made into a feature film by Steven Spielberg and stars Leonardo DiCaprio as Abagnale. Frank Abagnale wrote this commentary for Bankrate.com..

Identity thieves rob more than 500,000 Americans every year. Credit can be damaged, and fixing it can cost you hundreds of dollars and take hundreds of hours of your time. These steps will help you reduce your risk of identity theft.

1. Guard your Social Security number. It is the key to your credit report and banking accounts and is the prime target of criminals..

2. Monitor your credit report. It contains your SSN, present and prior employers, a listing of all account numbers, including those that have been closed, and your overall credit score. After applying for a loan, credit card, rental or anything else that requires a credit report, request that your SSN on the application be truncated or completely obliterated and your original credit report be shredded before your eyes or returned to you once a decision has been made. A lender or rental manager needs to retain only your name and credit score to justify a decision.

3. Shred all old bank and credit statements and "junk mail" credit card offers before trashing them. Use a crosscut shredder. Crosscut shredders cost more than regular shredders but are superior.

4. Remove your name from the marketing lists of the three credit reporting bureaus to reduce the number of pre-approved credit offers you receive.

5. Add your name to the name-deletion lists of the Direct Marketing Association's Mail Preference Service and Telephone Preference Service used by banks and other marketers.

6. Do not carry extra credit cards or other important identity documents except when needed.

7. Place the contents of your wallet on a photocopy machine. Copy both sides of your license and credit cards so you have all the account numbers, expiration dates and phone numbers if your wallet or purse is stolen.

8. Do not mail bill payments and checks from home. They can be stolen from your mailbox and washed clean in chemicals. Take them to the post office.

9. Do not print your Social Security number on your checks.

10. Order your Social Security Earnings and Benefits statement once a year to check for fraud.

11. Examine the charges on your credit card statements before paying them.

12. Cancel unused credit card accounts.

13. Never give your credit card number or personal information over the phone unless you have initiated the call and trust that business.

14. Subscribe to a credit report monitoring service that will notify you whenever someone applies for credit in your name.

Frank W. Abagnale is one of the world's most respected authorities on the subjects of forgery, embezzlement and secure documents. For more than 25 years he has lectured to and consulted with hundreds of financial institutions, corporations and government agencies around the world. <o:p></o:p>

Mr. Abagnale has been associated with the Federal Bureau of Investigation for more than 25 years. He lectures extensively at the and for the FBI's field offices. More than 14,000 financial institutions, corporations and law enforcement agencies use his fraud-prevention programs. In 1998, he was selected as a distinguished member of "Pinnacle 400" by CNN Financial News.

Mr. Abagnale believes that punishment for fraud and recovery of stolen funds is so rare, prevention is the only viable course of action.

Should you shred?
 

Got any secrets?

Sure you do. How about your bank and credit card statements? Personal bills, canceled or blank checks, investment information and financial statements? And, then there are medical records, income tax records and credit reports.

Do you simply toss them in the trash when you no longer need them for your records? If so, you need to change your modus operandi. Start shredding.

Anything you wouldn't feel comfortable having someone pick up and read, you should shred, says Jerry Haas, vice president of sales and marketing for American Document Destruction Corp. in.

Criminals need very little information to steal your identity. With your Social Security number they can apply for credit cards, cellular phones, loans, bank accounts, apartments and utility accounts.

Garbages hold a plethora of information. Once your Social Security number or an account number hits the dumpster, your identity is floating among the refuse, just waiting to be stolen. Shredding is a minimal inconvenience and expense compared to its alternative -- becoming an identity theft victim.

FTC is getting tough -- shred or else
The Federal Trade Commission issued the Fair and Accurate Credit Transactions Act in 2003, a law aimed at minimizing the risk of identity theft and consumer fraud. In November 2004, the FTC added the FACTA Disposal Rule to enforce the protection and disposal of sensitive consumer data.

Beginning the FACTA Disposal Rule says that "any person who maintains or otherwise possesses consumer information for a business purpose" must destroy discarded consumer information, whether in paper or electronic form.

Who must comply? Simply put, virtually everyone. Any business (whether employing one or thousands) using consumer information in its everyday operations or storing personal data as a business, such as banks, lenders, insurers, auto dealers, real estate agents, employers and record management companies, must safeguard consumer information. The new law also applies to service providers that destroy information, from shredders, recyclers, waste management or technology disposal companies.

The disposal rule offers business owners a few choices. They must burn, pulverize or shred paper documents and completely erase or destroy all electronic media. Or, they can contract a third-party information destruction company.

"The most important impact of the disposal rule is the attention it sheds on the problem of identity theft and proper information destruction," says Bob Johnson, executive director of the National Association for Information Destruction, a paper-shredding industry trade group.

"Many larger institutions, such as banks, investment companies or hospitals, have been working towards the issue of protecting consumer information, but too many smaller businesses, from auto dealerships, furniture stores and apartment landlords, have been flying under radar."

"As a matter of fact, every household should have a shredder to destroy personal documents," he adds. "I see them as being as common as the washing machine and dishwasher."

It's quite a list

Financial documents aren't the only items that should be destroyed rather than tossed out with the trash. Mobile Document Shredding in, provides a list that includes:

• Bank information
• Budgets
• Canceled or blank checks
• Credit card offers 
• Credit card information 
• Employee evaluations
• Financial statements
• Income tax records 
• Insurance coverage 
• Investment information 
• Legal papers
• Medical records
• Personal bills

If you work out of a home office, you'll want to destroy even more. Consider accounts payable and receivable, bidding strategies, blueprints, building and computer access codes, customer lists, estimates and invoices.

For tips on keeping your personal records organized, read Bankrate.com's story: "What financial records to keep and how long to keep them."

Next, you need to decide whether to buy a shredder or hire a shredding service.