PRESS ROOM

Holiday Shopping Season Has Begun; Protect Your Identity and Your Credit

November 23, 2009

Tips for Avoiding Identity Theft

INSURANCE INFORMATION INSTITUTE
New York Press Office: (212) 346-5500; media@iii.org
Washington Press Office: (202) 833-1580

NEW YORK, November 23, 2009 — Holiday shoppers can reduce the chances of becoming an identity theft victim this year by taking some simple preventative measures, according to the Insurance Information Institute (I.I.I.).

“The hustle and bustle of the holidays creates the perfect opportunity for thieves bent on stealing your credit cards or other financial information,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “Shoppers are tired, stores are crowded and it’s easy to become less guarded about personal information that appears on personal checks, drivers licenses and credit cards.”

Thieves can take information from identifying documents and use them to impersonate a victim, steal from bank accounts, establish phony insurance policies, or open unauthorized credit card accounts.

In 2008, 1.2 million identity theft and fraud complaints were filed with federal, state and local law enforcement agencies and private organizations, based on data tracked by the Federal Trade Commission.

The 2009 Identity Fraud Survey by Javelin Strategy & Research found that the number of identity fraud victims has increased 22 percent from 2007 to 2008 to 9.9 million adults. The survey points out that, historically, higher rates of fraud occur during economic downturns.

While many identity theft schemes rely on credit card data, there are other ways of accessing a victim’s information. Some employ electronic means such as online "phishing” scams—where thieves use email inquiries purporting to be from financial or other online organizations seeking sensitive account information. And the advent of “no-swipe” credit cards, which transmit account and user information through a radio frequency, makes it possible for identity thieves to use an electronic device to capture the information. And there are, of course, still the old-fashioned methods, such as “dumpster diving”—rooting around in people’s garbage to collect financial information.

No matter what the ruse, identity theft victims are often left with lower credit scores and spend months getting their credit records corrected. Frequently these victims have difficulty getting credit, obtaining loans and, in some cases, even finding employment.

“Consumers should carefully monitor their bank balances and credit card bills to make sure that they actually made all of the transactions attributed to them,” said Salvatore.

More than half of all identity theft victims discover that their identity was stolen by monitoring their bank and credit card accounts, according to the FTC.

To help protect your identity this holiday season, the I.I.I. has the following tips:

Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card or passport unless absolutely necessary.

Guard your credit card when making purchases. Use your hand as a shield when using ATM machines or making long distance phone calls with phone cards.

Always take credit card or ATM receipts. Do not throw receipts into public trash containers, leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.

Proceed with caution when shopping online. Make sure that you are buying from a reputable retailer with a secure network.

Monitor your accounts. Do not rely on your credit card company or bank to alert you of suspicious activity. Carefully monitor your bank and credit card statements to make sure all transactions are accurate. If you suspect a problem, contact your credit card company or bank immediately.

Order a copy of your credit report from each of the three major credit bureaus. A law that took effect in 2004 entitles you to one free credit report per year. Make sure it is accurate and includes only those activities you have authorized. The three major credit bureaus are Equifax, TransUnion and Experian.

Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother's maiden name, your birth date, any part of your social security number or phone number, or any series of consecutive numbers.

Do not give out personal information. Whether on the phone, through the mail or over the Internet, do not divulge sensitive information or your social security number unless you initiated the contact, are familiar with the person or company and are confident that they have a secure line.

Shred, shred, shred. Tear or shred any documents that contain personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

You can also make it more difficult for identity thieves to open accounts in your name by contacting the fraud department of any one of the three credit reporting agencies to place a fraud alert on your credit report—by law, the agency you contact is required to contact the other two agencies. The fraud alert tells creditors to contact you before opening any new accounts or making any changes to your existing accounts.

“To help consumers restore their identity, a number of insurers offer identity theft coverage,” said Salvatore. “Insurers understand that recovering from an identity fraud scheme can be a costly and time-consuming process.”

Identity theft may be covered by insurance. Identity theft protection and resolution services are included in some homeowners and auto policies at no additional cost. The service provides consumers with a fraud specialist to assist and guide them through the process of restoring and protecting their identity. Some companies include identity theft coverage as part of their homeowners insurance policy, selling it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy. This coverage provides the customer reimbursement for the expenses associated with the identity and credit restoration process including phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer). Contact your insurance agent or company representative to find out what kind of coverage is available.

In addition, the National Insurance Crime Bureau (NICB) is dedicated to combating insurance fraud and theft, including identity theft. If you suspect fraud or theft, you can call NICB’s toll-free hotline to provide an anonymous tip that could make you eligible for a reward. The number is 1.800.TEL.NICB (1.800.835.6422). For more information about avoiding and dealing with identity theft, consumers can also go to the FTC Identity Theft Web site.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.