Identity Theft: Protection and Prevention

"Possibly the most poignant comments [about identity theft] were made by U.S. Treasury Secretary John Snow, [who said]'...the greatest threat to consumers today is the growing menace of identity theft. Identity theft is far more insidious and harmful to our national welfare than many realize. It attacks the trust and confidence that nurture our open economy, even as it destroys individual lives.'"

-- Identity Theft 911 (www.identitytheft911.com)

Identity theft (ID theft) occurs when one person misappropriates another person's personal information - such as a Social Security or credit card number and address - to fraudulently derive financial gain. For example, using the victim's personal information, the identity thief can apply for and receive credit or loans from banks and retailers, steal money from the victim's bank accounts, rent an apartment, buy a car, become employed or even commit crimes in the victim's name. Victims might never know that their identities have been stolen until unauthorized transactions appear on their credit-card statements, collection agencies contact them or loan applications have been denied. Undoing the damage wrought by identity theft is a long and costly process that can leave victims feeling vulnerable.

A Federal Trade Commission (FTC) survey conducted in September 2003 shows that 27.3 million Americans have been victims of identity theft in the last five years, including 9.9 million people in the last year alone. According to the survey, identity-theft losses in 2002 to businesses and financial institutions totaled nearly $48 billion, while consumer victims reported $5 billion in out-of-pocket expenses.

The American Homeowners Association (AHA)� has partnered with AIG Affinity Group to provide Personal Internet Identity Coverage* to consumers who join the association by signing up through Froople!TM. Coverage includes income protection, expense reimbursement, an ID recovery kit and 24/7 toll-free assistance. The group policy will cover member out-of-pocket costs up to $2,500, after a $250 deductible, twice the average $1,200 in out-of-pocket expenses experienced by identity-theft victims, according to the Identity Theft Resource Center, 2002. In addition, the typical case requires 175 hours to correct mis-identity, which is vastly shortened by the support line and 24/7 toll-free assistance provided without additional cost through this ID-Theft Protection Plan. Features of PIIC include:

• Claims service: Trained identity-theft specialists are on call 24/7 to guide individuals through the process of restoring their identity profiles and credit records. Identity-theft victims receive an ID Theft Recovery Kit containing pre-filled professional letters to send to creditors and bureaus.

• Income protection: Coverage is provided for lost wages resulting from time off work related to a covered stolen identity.

• Expense reimbursement: Expenses are covered related to identity recovery, including defense costs for certain civil suits, refiling for loans and reimbursement of fees.

* Insurance benefits and services provided by member companies of American International Group, Inc. Some restrictions may apply.

The Federal Trade Commission (FTC) offers these tips to help consumers protect themselves from online identity theft:

• Update your virus protection software regularly, or when a new virus alert is announced.

• Don't download files sent to you by strangers.

• Don't click on hyperlinks from people you don't know.

• Use a firewall program, especially if you use a high-speed Internet connection like cable, DSL or T-1, which leaves your computer connected to the Internet 24 hours a day.

• Use a secure browser - software that encrypts or scrambles information you send over the Internet - to guard the security of your online transactions.

• Try not to store financial information on your laptop unless absolutely necessary.

• Before you dispose of a computer, delete personal information*.

• Look for Web-site privacy policies; if you don't see one, consider surfing elsewhere**.

*For more information on deleting personal information, see "Clearing Information From Your Computer's Hard Drive" at www.hq.nasa.gov/office/oig/hq/harddrive.pdf.

** For more information on privacy policies, see Site-Seeing on the Internet: A Traveler's Guide to Cyberspace.

Note: For more information on identity theft, in general, go to http://www.consumer.gov/idtheft/. For more tips from the FTC, go to http://www.consumer.gov/idtheft/protect_againstidt.html#5.