State Department Announces 400 at Risk of Identity Theft

The State Department announced that it has notified nearly 400 passport applicants of a security breach that may have put them at risk of identity theft. Most of the applicants at risk are in the Washington, D.C. area, and their passport applications may have been illegally accessed and used to open fraudulent credit card accounts. The applications contained identifying information, including Social Security numbers. More potential identity theft victims may be notified as the investigation continues.

Most of the people contacted have not become identity theft victims at this point, but they have all been offered free credit monitoring for a year. The breach was discovered when a man was arrested with 19 credit cards in different names and eight completed passport applications. While the State Department declines to comment on how he obtained these applications, it was confirmed that one State Department employee has been fired as a result of this breach.

The department has since stepped up its security for passport records management. While specifics about the method of this security breach have not been disclosed, it is no less disturbing. We don't know how many people were involved, but it's definitely possible that many of these people may already be victims of identity theft and not even know it.

Ohio Joins Other States in Embracing the Credit Freeze

Many states are embracing the credit freeze as a way for people to protect themselves from identity theft. This time Ohio is joining the states that allow residents to freeze their credit beginning Labor Day 2008. For $5 per credit bureau, Ohio residents can purchase a credit freeze to keep their credit reports from being viewed without them making the reports available by "thawing" them.

While no method of identity theft protection is completely fool proof, a credit freeze is definitely a helpful tool in protecting yourself from financial ID theft. What the credit freeze does is locks your credit report from anyone trying to extend credit to you. No potential creditor can view you credit report without you "thawing" it for them (something you would do if you apply for a loan or a credit card). So if an identity thief applies for credit in your name, he or she will be turned down since the company will not be able to view your credit report.

What can a credit freeze not prevent? As I said, there is no perfect identity theft prevention service. It doesn't protect your existing accounts. Current bank and credit card accounts will still need to be reviewed carefully and regularly. Also, some service accounts can be opened without a credit check, like phone and other utilities. Finally, it won't prevent unauthorized use of medical insurance (medical identity theft) or someone giving your name during an arrest (criminal identity theft).

Yes, it's limited, but unlike many so-called identity theft protection services, a credit freeze can actually protect you rather than just monitor your credit and alert you to unauthorized activity. I don't usually don't encourage people to purchase services, but for Ohio residents, this could be the best $15 you spend in a while.

Identity Theft No Longer Just a White Collar Crime

When most people think of identity theft, they think of someone tech savvy, like the hackers named in the recent international case who accessed credit card information electronically. Cases like this leave people thinking of identity theft as a white collar crime. Many of my earlier posts have illustrated that that's not necessarily the case since methods such as mail theft and dumpster diving don't require technical know-how at all, and these are highly effective methods of obtaining personal information required to commit identity theft.

However, a recent Los Angeles Times article pointed out that street gangs normally associated with violent crimes are finding identity theft to be quite profitable. After all, technology has made it much easier to obtain credit. Anyone can apply for a credit card online with the proper information without having to provide valid identification.

Anyone who can access and make use of the personal identifying information of others is capable of being an identity thief. This applies to people on all levels, not just the hackers trading credit card information. Perhaps we should reexamine our perception of identity theft as just a white collar crime.

Students and Identity Theft: Caution for Those Returning to School

There's nothing an identity thief likes more than a clean slate. A young person with little or no credit is an ideal identity theft victim. After all, credit card companies are eager to extend credit to young consumers. In a few weeks, many of you will be returning to school. As you prepare for the next school year, you will obviously want to prepare with the proper books and supplies for your classes, but you will also want to prepare in other ways. The sooner you know how to protect your identity the less likely you will be to fall into the identity theft trap.

This caution is especially relevant for college students who will not have parents over your shoulder making sure you are safe. The first week or two of class is pretty hectic, registering for classes, buying textbooks, getting to know new roommates, etc. Don't get so overwhelmed that you forget to protect your identity. People will be around distributing credit card and part-time job applications. This is a time when students are especially vulnerable to identity theft. Not everyone on campus will be who they say they are. Take special care if you complete an application.

This is just one example of the identity theft scams and traps out there. I highly recommend you check out the Identity Theft Resource Center. There are numerous articles about scams and identity theft methods and how to avoid them.

Identity Theft and Home Equity

The most common type of identity theft is financial identity theft because it is most profitable and there are many fairly easy ways to commit it. For the most part, what the financial identity thief is looking for is credit. According to the Identity Theft Assistance Center, people with good credit have become targets for identity theft because they often have untapped home equity.

A home equity line of credit is an excellent vehicle for an identity thief because it is a big pool of money. This pool can drain quickly if it consumers are not careful to frequently check their credit reports. A home equity line of credit is almost as easy to open as a credit card account. With the proper financial information on you, your thief can easily commit mortgage fraud.

It is recommended that if you have good credit, it is all the more reason to check your credit frequently. Your good credit will definitely make you a target for identity theft.

Credit Card Companies and Identity Theft

I know this is a touchy subject, and there are companies that may not appreciate this post. However, when I saw this press release, I felt it appropriate to post. One of my first posts on this blog referred to the elimination of junk mail, particularly pre-approved credit card offers, as a way to prevent identity theft. Apparently, the targets vary, and in the case of the press release, people who have spent extensive time in the hospital have become targets for identity theft. Of course, who better to target than someone whose primary concerns are their health, not their credit? Who knows how long it will be before the theft is discovered, if they even survive?

And who is being blamed? Major banks and credit card companies offering free credit to just about anyone without verifying the identity of the person applying. It's as simple as mailing in a form, filling in an online request, or making a phone call. Lending and issuing credit, after all, is quite profitable. And what about those of us affected by identity theft? Cost of doing business perhaps.

A lawsuit is going on to hold these banks issuing the credit responsible.

Identity Thieves Target Celebrities

Police busted a major identity theft ring operating out of a home in Northeast Philadelphia. Andre Holmes and an accomplice used change of address forms to have victims' mail delivered to their home and used personal victim information to create checking accounts and obtain credit cards. Investigators believe this information was obtained by one of the suspects during her previous job with the IRS.

There are seventeen confirmed victims, but the number could rise into the hundreds. Some of the targeted victims include Paris Hilton, Whitney Houston, and Jennifer Lopez.

I've heard of setting the bar high, but I'm not sure how they expected to get away with this. Sure, Paris Hilton is wealthy enough that she probably doesn't worry too much about checking her credit report often, but any company who has done business with her in the past may find it suspicious that she's suddenly receiving all of her credit cards and bills at a home in Northeast Philadelphia.

Fraud Alert: Does it help?

So, have any of you Ohio tax payers received your letter from the state of Ohio saying your name and Social Security number were on that stolen laptop? The state has offered those concerned about identity theft one year of protection services with Debix with no charge to the potential victim. Or maybe you don't live in Ohio but suspect you might be a victim (or potential victim) of identity theft. There is something else you can do to protect your credit.

One thing the Federal Trade Commission recommends is placing a fraud alert on your credit reports.

But what is a fraud alert? The major credit reporting bureaus attach to your credit report (at your request) to let potential creditors know that your data has been compromised, and before opening any kind of credit account (credit cards, loans, cell phone accounts, etc.), they should contact you by phone to confirm that it is actually you requesting this credit. It also entitles you to a free copy of your credit report. The initial fraud alert can be placed if you suspect you are a victim (or a potential victim) of identity theft and is effective for ninety days. You can request an extended fraud alert, but you must provide a copy of your identity theft report.

So does it help? Yes and no. It depends on whether or not creditors are willing to call you. Some will contact you as they should, and others will not. With companies that don't, some will automatically deny credit, which is only a problem if you are trying to obtain a loan or credit card. Others may ignore it and approve the account anyway. That's when you have to worry.