Credit fraud.......the elementary definition is when someone uses your credit card or number without your knowledge to obtain cash or goods for themselves.
It is considered fraud as the person committing the fraud is creating the deception that it is the legitimate cardholder making use of the card.
Not protecting your information can lead to the even more damaging crime of identity theft.
In this instance the fraud can go much deeper and put considerable hardship on the victim of the fraud and theft.
There are several ways credit fraud and identity theft can occur!
One way is called Skimming.
This is done by either a dishonest merchant or business employee who
swipes a credit card a second time using a small device that duplicates
and stores the info from the original card.
This can lead to unauthorized charges on one's account, counterfeit cards being made or the numbers and info being sold to others for equally illegal activities.
If you saw the Dateline article presented
in Jan.2010 entitled "To catch an ID Thief " then you know how deep the
sale of info goes.
There are underground web sites dedicated to these thieves and once they get your info it can be only a matter of minutes before they start using it, making purchases and duping unsuspecting people into helping them.
Most of this (the underground sites that purchase the information) is being done outside of this country where laws are not as tight.
Yet Skimming is a growing world wide problem.
Other methods of stealing your personal information are:
Phishing, a skilled thief may use this form of theft posing as your financial institution or any company you do business with having the purpose of getting you to reveal information they need. They may prey on your own desire for easy money by suggesting you won money in a sweepstakes or lottery.
Using e-mails,spam or pop-up messages on the internet any means available to them. Learn more about phishing and how to protect yourself from this form of credit fraud.
This kind of fraud is related to phishing yet requires a high level of skill as many times this kind of fraud cannot be controlled by software the consumer uses. The fraud starts rather before the personal computer in the servers that service many individuals internet service.
The simple act of dumpster diving or stealing trash just for the purpose of finding bills or statements with information on it.
The oldest form of thievery Stealing.... your wallet, purse or mail and then there's the possibility of personnel records stolen at the workplace or simply discarded in a negligent way when employment ends.
If they are able to obtain matching information such as a person's full name, their social security number, date of birth, address, they will be able to set up new accounts in that name.
They can extend their activity by changing the address on the new account possibly even older accounts that they are able to obtain the needed info so that by the time you are aware that something is wrong much damage has been done.
Other credit fraud that can occur:
Phone, utility and rental fraud
They could rent an apartment, open gas, electricity and phone accounts.
At the bank they could open a new checking account and write bad checks in your name.
Or a new loan could be obtained.
At the registry of motor vehicles a new drivers license with your name and their picture on it.
Maybe they know of some government benefits that you were entitled to but they received in your name.
Medical services could be obtained in your name, then possibly adulterating your medical history.
As you can imagine the consequences of credit fraud are enormous and costly not only for yourself but for the merchants and service providers that were involved.
While not all credit fraud and ID theft can be prevented (some info is acquired by hackers) there are steps you can take to try and limit this as best as possible and being vigilant about your own accounts is one of the biggest steps to take.
Here is a story showing that vigilance and quick reporting credit fraud can help in a situation when prevention does not stop the fraud but action can minimize the consequences.
The Federal Trade Commission as also many others recommend to shred all important financial documents that you are disposing.
This is recommended BECAUSE people steal trash or dumpster dive. It makes me sad that our life is reduced to worrying about our trash.
For this I say go even further. If someone is actually going to steal your trash to rip you off make them wish they never ever did it and won't do it again.
Add a little refrigerator cleaning to the mix. You know the food at the back that's green and moldy and you don't even know what it was any more (come on we all have it time to time).
Mix that right into the bag of important papers. That have been shredded of course. Maybe add a bit of water. You might have to double bag!!
Or maybe there's a baby in the house or cats and their litter. I won't go into any more detail you get the picture if you're not heading for the bathroom by now.
Bet you won't find this on the FTC's website.
Here are more tips to avoid credit fraud.
If you have found yourself a victim of fraud or just circumstances make
you think you need more security on your accounts you can place credit card fraud alerts on your accounts. This is the first step toward making your accounts more secure.
Some feel the credit fraud alert isn't enough protection against credit fraud and identity theft. If you just aren't comfortable with your finances seemingly open for attack you can consider a credit freeze on your accounts.