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Identity thieves use other people’s personal information for many things. The most common use is credit card fraud. After obtaining a target’s personal details, thieves can open new lines of credit, hijack existing credit card accounts, and continue spending with other people’s money. Here’s an overview of several tactics identity thieves use to commit credit card fraud.
opening new accounts
With personal information such as name, date of birth and Social Security number, thieves can impersonate someone else to open new lines of credit. They may apply for a credit card in their victim’s name, or steal pre-screened credit offers from their target’s mailbox or trash can. These prescreened offers sometimes contain credit cards that thieves can activate by calling a toll-free number. Many victims are unaware that someone has taken out credit cards in their name, until they receive calls from debt collectors or are denied a loan due to a low credit score.
Hijacking existing accounts
In addition to opening new lines of credit, identity thieves can use your falsified information to take control of existing accounts. They use their victim’s personal information to “verify” the identity of the thief as the actual account holder. The thief then changes account details such as the PIN, password, and billing and mailing addresses. Once an identity thief has established control of someone’s accounts, it can be difficult to return control to the proper owner before the thief wreaks financial havoc.
skimming
Through the use of palm-sized card-reading devices, thieves can swipe all of their victims’ card information in no time. Skimming is a subtle crime that usually goes undetected until victims notice fraudulent charges on their credit card statements. Anyone who hands their card to an employee at a store or restaurant is a potential target for skimmers. Some skimming devices are also installed in gas pump card readers and ATM slots. They collect card information for the use of identity thieves, and most devices are impossible to detect for casual observers.
Fishing and Vishing
Phishing is a scam used by thieves to trick victims into providing their personal information. Some thieves send e-mails that appear to be from banks or popular Web sites. They provide a link for the recipient to follow. The link takes the victim to a login page where they enter their information to verify it. They are actually giving away their personal details to identity thieves. This scam can also be pulled over the phone. That variation is known as “Vishing”. Scammers pretend to be representatives of the IRS or the victim’s private bank. They ask the victim to verify account information and personal details, or provide a phone number where information can be entered with a touch tone phone.
Fraud is committed whenever someone uses a credit card without the authorization of the card holder. Credit card fraud is a popular and profitable type of identity theft, and potentially causes the most financial devastation to the victim. For your safety, never give out personal information over the phone. Avoid clicking on links contained in e-mails. Pay with a credit card only when you have to, and stick with reputable businesses you’re familiar with. And go through your credit card statement carefully every month. Some scammers charge lots of small fees that don’t set off a fraud alert. If you notice suspicious activity on your monthly bills, contact your card issuer immediately.
The best way to prevent credit card fraud is to take proactive steps to reduce your exposure to potential theft and carefully monitor your credit file. While these steps can be done for free, we recommend having some form of identity theft protection that includes theft insurance. Many of us don’t have the time or energy to regularly check our credit history, and identity protection services have become increasingly affordable. The identity theft protection industry has really grown so do your research; Products, services and approaches vary wildly.
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