Identity Theft – Description
Wednesday, October 5th, 2011
by Jennifer E. Acuff, CPA, CFP®, PFS, Windham Brannon Financial Group, LLC
Most likely you or someone that you know has been a victim of identity theft. Unfortunately, you are not alone – an estimated 11 million people were victims just last year. Roughly 1 in 20 people will be a victim this year and you have higher odds if you are a small business owner or young adult. Why is that? Small business owners often use their personal accounts and home addresses to complete business transactions by mail or internet. Young adults, especially those at college, have higher odds because they are likely to share computers (library, dorms, computer labs, etc) with strangers.
It is estimated that the average victim can expect over $6,000 in fraudulent charges, an average of $500-$2,500 in fees to rectify those charges, and between 40 to 600 hours of work. This does not include the subsequent time verifying future transactions & statements, frustrations, and stress involved to recover your identity.
So, how does identity theft happen??? There are several ways:
- False Identification: After a criminal obtains your personal information, they can get false drivers licenses, birth certificates, passports, medical ID cards, etc.
- Credit Card Fraud: Criminals can make unauthorized charges by simply having your credit card number or the card. Numbers are found on statements, receipts, new cards arriving in the mail, or lost/stolen cards. This fraud can happen over the telephone or Internet where you do not need to be present to purchase goods.
- Skimming: This type of fraud involves copying the magnetic stripe from an authentic credit or debit card and transferring the information to a replacement counterfeit card – all in the normal course of a legitimate transaction.
- Computer Hacking: Databases of personal information are targets for criminals with limited technology skills who can hack into computer systems. Be careful before you buy goods on the internet and provide your information only to reputable companies that have proper security measures. You should also take measures to prevent access of your home computer by having anti-virus software, buying a personal firewall, and storing important information off line.
- Phishing: This is the illegal practice of divulging your personal information (also known as “pretexting”) under false pretenses. Many times this comes in the form of a phony email from your bank, IRS, Credit Card Company, brokerage account, etc. The criminals then use this information to obtain further information about you or may already have sufficient details on you to commit an identity crime.
- Dumpster Diving: Believe it or not this happens…. criminals dig through trash to obtain important personal details. This is the reason it is imperative to shred important documents or mail that contains any sensitive information. Note: It is crucial to shred the “pre-approved” credit offers that arrive in the mail without warning.
If you believe you have been a victim of identity theft, click here to begin the necessary steps. If you would like more information on steps to decrease the likelihood that you will become a victim of identity theft, click here.
Jennifer E. Acuff is a wealth advisor for Windham Brannon Financial Group, LLC, a wealth management firm in Atlanta, A Certified Public Accountant (CPA), Certified Financial Planner (CFP®) and a Personal Financial Specialist (PFS), Jennifer has an extensive background in personal tax planning and consulting. She can be reached at email@example.com or 678-510-2766.
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