Identity Fraud Can Cost You More Than Your Good Credit

If you have ever received a call from a collection agent claiming you owe money for a loan you don't recall applying for, you very well could be a victim of identity fraud. All someone needs is your name, social security number, date of birth and account numbers to ruin you financially. This information is easier to obtain that you think, and before you realize it, you are a victim of identity fraud.

The Bad News: Identity theft is escalating at a dramatic pace. In fact, identity theft is one of the fastest growing crimes of the 21st Century

There are several common ways identity fraud is carried out. Online identity theft, considered to be the most popular form of identify fraud, is only one. Another method has been nicknamed "dumpster diving," which involves stealing mail by rummaging through someone's garbage for identifying documents.

These often include discarded receipts and paid bills, which all have identifying information on them that thieves find beneficial. One method used to fight identity theft is quite simple and effective: Consumers can reduce the risk of becoming the victims of identity fraud by buying and using a paper shredder. That way, no information of potential importance leaves the house intact.

Another method thieves use to commit identity fraud is called "phishing." This is a prime example of online identity theft for the purposes of fraud. Phishing involves an individual or group that pretends to be from a trusted organization or company to obtain personal information online. Spam is another example of electronic fraudulent activity. Spam usually involves winning a phony contest the would-be victim must respond to with some of his or her personal information. Fighting identity theft of this nature requires awareness. One of the best rules to follow is to never open an email unless you know the sender.

Of course, the biggest way identity theft gets perpetrated is the most recognizable. Hackers take a more direct approach to fraud. They break into computers and steal the information they need. Again, there's a good way to fight identity theft of this type: Purchase good virus protection and firewall software to block unwanted intruders from your computer.

A series of three-year surveys that ended in 2006 show that, while there has been a decrease in the number of victims of identity fraud, the cost rose to $56 billion dollars last year. More statistics show that:

The average time a victim takes to fight identity theft is 600 hours. 3/4 of victims who responded to the survey said that the crime involved someone getting their hands on a credit card. The impact of online identity theft and identity fraud is similar to that of violent crimes for the victims.

This problem stretches far beyond just your backyard. Identity fraud is a problem in every country on the planet, costing local economies billions of dollars. For example, British statistics show that the economy suffered a 1.7 billion pound loss due to identity fraud.