Nearly 10 million Americans hit by identify theft

While everything else is slipping, identity theft is on the rise, jumping to a record 9.9 million victims in 2008, which is up 22% from 2007. Approximately one in 23 U.S. adults became victims, according to Javelin Strategy & Research, who released their fifth annual study today. Total loses increased after three straight years of decline, but the loss per victim fell by 12% to $4,849 from $5,488. The most positive trend is that individuals spent 31% less (an average of $496) to clean up the mess. More than half of victims didn't have to spend anything to clean up after a fraud.

James Van Dyke, president of Javelin told CNN, "Identity fraud has been dropping until last year, boom, there was a turn-up. The only thing we can logically attribute that to is the economy. If people need to make money, and decide to do so illicitly, identity fraud is the logical opportunity."

Improper use of checkbooks and credit or debit cards after a wallet or pocketbook is lost or stolen remains the most common means of identity theft -- 43% of all incidents can be traced to this cause. About 25% of victims had their PINs compromised on ATM cards. Online fraud was the reason for 11% of cases.

So who's most likely to be a victim? People with incomes over $75,000 were more likely to be hit than those with lower earnings. By age, the highest fraud rate is among people between 35 and 44. Ethnically Hispanics were hit the most followed by African-Americans, Caucasians and Asians.While it wasn't mentioned in CNN's story, I suspect identity fraud is rising because of job scams, where people get an email promising a job; in most cases the person receiving the email never applied for a position. These emails ask for one's key personal information, such as Social Security number and date of birth, and then the fraudster has all he needs to open a new account in your name or make changes to existing accounts.

How can you avoid identify theft?

* Don't give your Social Security number to anyone who calls you unless you do know the caller and were expecting the call. If the caller says they are calling from a company you do business with or from a company where you are applying for a job, ask for a call back number and verify that number is from the company the caller says he or she represents.

* Don't give out any personal identifying information on social networking websites and in chat room discussions. Always be sure to verify the identity of the person asking for the information.

* Keep your sensitive documents secure. A safe deposit box at your bank is your best bet.

* Shred any documents you want to throw out that have your account numbers or other identifying information on them. Shredders today are pretty cheap and a lot cheaper than cleaning up an identity fraud mess.

* Choose hard to guess passwords and pin numbers. Most people use a part of their name or a pet's name. Be more creative. Also, change up your passwords and pin numbers so you don't use the same one with several accounts.

If you do become a victim of identity theft, immediately notify your financial institutions and the three credit bureaus -- Equifax, Experian and TransUnion. The credit bureaus will put a fraud alert on your account. If your checkbook was used or stolen, your bank will recommend you close your account. While I know this could result in a lot of work, especially if you use online bill pay, I strongly suggest you follow their advice. I've been the victim of identity fraud two times in my life, one involving fraudulent checks (police suspected a check ring using checks from a donation I made) and the second involving the loss of my financial records when I mailed them in to a bank while working on a refinance (UPS lost the package). In both cases I had a new bank account the same day I discovered the problem. When I loan package was lost, I changed account numbers for every bank account, investment account and credit card.

The faster you act when you see signs of identity theft, the less work you'll ultimately need to do to clean it up and the less money you'll lose. Since experiencing the check fraud incident I check my bank and credit accounts online everyday for signs of identity theft.

Lita Epstein has written more than 25 books including the "Complete Idiot's Guide to Improving Your Credit Score" and "Surviving a Layoff: A Week-by-Week Guide to Getting Your Life Back Together."
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