How Identity Theft Occurs

Identity thieves have many ways to steal your identity. They can exist for years under your name, without you having a clue what’s going on behind your back. Here are just a few examples of how identity theft is committed:

• Theft of Credit Cards and Documents
  Identity thieves often steal purses or wallets, and steal newly issued cards or credit-card applications from your residential mailbox. Some, known as “dumpster divers,” will even rummage through trash to pick out bank and credit card statements. Letters that contain “pre-approved credit-card” offers, if not shredded or destroyed, can be sent back to the issuing bank requesting that the card be sent to the recipient (i.e., you), but at a new address of the identity thief’s choosing.
  
  
• Theft from company government database
  Millions of identities can be stolen at one time when hackers or insiders break into company databases or commercial Web sites where credit-card information and other personal data are stored. Such databases are proliferating; businesses and governments share everything from marketing lists to property records on the Internet. These databases are often poorly protected.
  
  
• Shoulder Surfing
  Some identity thieves also engage in “shoulder surfing”: looking over your shoulder or from a nearby location as you enter your Personal Identification Number (PIN) at an ATM machine. By installing a fake ATM device that reads your card’s encoded data, or by distracting you while your card is taken or switched with another, an identity theft can then use your PIN to drain your bank account without your knowledge.
  
  
• Skimming
  Identity thieves also “skim” or “swipe” customer credit cards at restaurants or cash stations, using an electronic device known as a skimmer. The skimmer records the personal information data from the magnetic stripes on the backs of the cards. Identity thieves then transfer or transmit those data to another location, sometimes overseas, where it is re-encoded onto fraudulently made credit cards.
  
  
• E-Mail and Website “Spoofing”
  Many criminals who want to obtain personal data from people online use a technique known as “spoofing”: the creation of e-mails and websites that appear to belong to legitimate businesses, such as financial institutions or online auction sites. Consumers who receive e-mails claiming to be from a legitimate business are often directed to a website, appearing to be from that business, at which the consumers are directed to enter large amounts of personal data. In fact, the criminals who created these e-mails and websites have no real connection with those businesses. Their sole purpose is to obtain the consumers’ personal data to engage in various fraud schemes.