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Here are some ways that identity thieves work:

They open a new credit card account, using your name, date of birth, and Social Security number.

When they use the credit card and don’t pay the bills, the delinquent account is reported on your credit report.

They call your credit card issuer and, pretending to be you, change the mailing address on your credit card account. Then, your imposter runs up charges on your account. Because your bills are being sent to the new address, you may not immediately realize there's a problem.

They establish cellular phone service in your name.

They open a bank account in your name and write bad checks on that account.

The Crime of Identity Theft

It can happen to anyone. The phone rings and a collection agency demands that you pay past-due accounts for goods you never ordered. The supermarket refuses your checks because you have a history of bouncing them. But you have always paid bills on time. What has happened?

The crime of identity theft is on the rise. An estimated 500,000 or more persons fall victim each year. Using a variety of methods, criminals steal Social Security numbers, driver's license numbers, credit card numbers, ATM cards, telephone calling cards, and other pieces of individuals' identities such as date of birth. They use this information to impersonate their victims, spending as much money as they can in as short a time as possible before moving on to someone else's name and identifying information.

There are two types of identity theft. "Account takeover" occurs when a thief acquires your existing credit account information and purchases products and services using either the actual credit card or simply the account number and expiration date. "Application fraud" is what some experts call "true name fraud." The thief uses your SSN and other identifying information to open new accounts in your name. Victims are not likely to learn of application fraud for some time, because the monthly account statements are mailed to an address used by the imposter. In contrast, victims learn of account takeover when they receive their monthly account statement. This guide discusses strategies for reducing the risk of both types of fraud.

Generally, victims of credit and banking fraud are liable for no more than the first $50 of the loss. (15 USC sec. 1643) In many cases, the victim will not be required to pay any part of the loss.

Even though victims are usually not saddled with paying their imposters' bills, they are often left with a bad credit report and must spend months and even years regaining their financial health. In the meantime, they have difficulty getting credit, obtaining loans, renting apartments, and even getting hired. Victims of identity theft find little help from the authorities as they attempt to untangle the web of deception that has allowed another person to impersonate them.

Stealing wallets used to be the best way identity thieves obtained SSNs, driver’s licenses, credit card numbers and other pieces of identification. While still employed, identity thieves now use more sophisticated means:

"Dumpster diving" in trash bins for unshredded credit card and loan applications and documents containing SSNs.
Stealing mail from unlocked mailboxes to obtain newly issued credit cards, bank and credit card statements, pre-approved credit offers, investment reports, insurance statements, benefits documents, or tax information. Unfortunately, even locked mailboxes may not stop the most determined thief.
Accessing your credit report fraudulently, for example, by posing as an employer, loan officer, or landlord.
Obtaining names and SSNs from personnel or customer files in the workplace.

"Shoulder surfing" at ATM machines and phone booths in order to capture PIN numbers.
Finding identifying information on Internet sources, via public records sites and fee-based information broker sites.

Take these steps to reduce your risk of becoming a victim of identity theft:

You cannot prevent identity theft. Criminals can commit identity theft relatively easily because of lax credit industry practices and the ease of obtaining SSNs. But you can reduce your risk of fraud by following the tips in this guide. The most important advice we can give you is to check your credit report at least once a year. If you are a victim of identity theft, you will catch it early by checking your credit report regularly.

Reducing access to your personal data:

1. To minimize the amount of information a thief can steal, do not carry extra credit cards, your Social Security card, birth certificate or passport in your wallet or purse, except when needed. At work, store your wallet in a safe place.

2. If possible, do not carry other cards in your wallet that contain the Social Security number (SSN), except on days when you need them.

3. To reduce the amount of personal information that is "out there," consider the following:

Remove your name from the marketing lists of the three credit reporting bureaus -- Equifax, Experian (formerly TRW) and Trans Union. Call 888-5OPTOUT. This will limit the number of pre-approved offers of credit that you receive. These, when tossed into the garbage, are a potential target of identity thieves who use them to order credit cards in your name. (See PRC Fact Sheet 6 for more information about credit reporting, www.privacyrights.org/fs/fs6-crdt.htm.)

Sign up for the Direct Marketing Association's Mail Preference Service and the Telephone Preference Service. Your name is added to name deletion lists used by nationwide marketers. Register for your state’s "do not call" list, if it has one

Download a copy of the Identity Theft Affividavit

E-bay/Amazon/PayPal Have Frozen Your Account!

Phishing is a type of deception designed to steal your identity. In phishing scams, scam artists try to get you to disclose valuable personal data—like credit card numbers, passwords, account data, or other information—by convincing you to provide it under false pretenses. Phishing schemes can be carried out in person or over the phone, and are delivered online through spam e-mail or pop-up windows.

Tips to Protect Yourself from phishing scams:

1. Never click on Hyperlinks within emails, instead, copy and paste them into your browser
2. Use SPAM Filter Software
3. Use Anti-Virus Software
4. Use a Personal Firewall
5. Keep Software Updated (operating systems and web browsers)
6. Always look for "https://" and padlock on web sites that require personal information
7. Keep your computer clean from Spyware
8. Educate Yourself of fraudulent activity on the Internet
9. Check & monitor your credit report

If you suspect an e-mail or Web site is fraudulent, please report this information to the real bank, company or government agency, using a phone number or e-mail address from a reliable source. Example: If your bank's Web page looks different or unusual, contact the institution directly to confirm that you haven't landed on a copycat Web site set up by criminals. Also, contact the Internet Crime Complaint Center (www.ifccfbi.gov), a partnership between the FBI and the National White Collar Crime Center.