Identity thieves use other people's personal information for many things. The most common use is credit card fraud. After they've obtained a target's personal details, thieves can open new lines of credit, hijack existing credit card accounts, and go on spending sprees with other people's money. Here's an overview of the many tactics identity thieves use to commit credit card fraud.
Opening New Accounts
Armed with personal information such as a name, date of birth, and Social Security number, thieves can impersonate someone else in order to open new lines of credit. They can apply for credit cards in their victim's name, or steal prescreened credit offers from their target's mailbox or trash can. These prescreened offers sometimes contain credit cards that the 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 get declined for loans due to a low credit score.
Hijacking Existing Accounts
Besides opening new lines of credit, identity thieves can use their ill-gotten information to take control of existing accounts. They do this by using their victim's personal information to "verify" the thief's identity as the real account holder. Then the thief changes account details such as PINs, passwords, and billing and mailing addresses. Once an identity thief has established control over 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 at all. Skimming is a subtle crime that usually isn't detected until victims notice fraudulent charges on their credit card statements. Anyone who hands their card over to an employee at stores or restaurants is a potential target for skimmers. Some skimming devices are also implanted into gas pump card readers and ATM slots. They harvest card information for identity thieves to use, and most devices are impossible for casual observers to detect.
Phishing and Vishing
Phishing is a scam that thieves use to trick victims into providing their personal information. Some thieves send out 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 in order to verify it. What they're really doing is giving 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 personal bank. They ask the victim to verify account information and personal details, or provide a phone number where the information can be entered with a touch tone phone.
Anytime someone uses a credit card without the card holder's authorization, fraud has been committed. Credit card fraud is a popular and profitable type of identity theft, and potentially causes the most financial devastation to the victim. To protect yourself, never give out personal details over the phone. Avoid clicking on links contained in e-mails. Only pay with a credit card when you have to, and stick with reputable businesses that you're familiar with. And carefully watch your credit card statements each month. Some scammers make a lot of small charges that don't set off fraud alerts. If you see suspicious activity on your monthly bills, get in touch with your card issuer immediately.
The best way to protect against credit card fraud is to take proactive steps to reduce your exposure to possible theft and diligently monitor your credit file. While these steps can be done for free, we recommend some type of identity theft protection which 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 evolved so do your research; the products, services, and approaches vary wildly.
Sarah P. Miller is the senior editor for http://www.IDProtectionguide.net/trustedidLP.php a site designed to give consumers in-depth reviews and comparisons of top identity theft solutions including Lifelock, Equifax, TrustedID, and Identityguard
Tags: credit fraud, id theft fraud, identity fraud, protect yuor credit, respo, services professionals
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