True story: I had my credit card number stolen in early December for a joint business account I share with my wife.
But we didn’t know about it until a bill showed up from our credit card company a few weeks later. When my wife reviewed our charges, that’s when our collective jaws dropped, our eyes bulged, and our hearts sank. Fortunately, the total in fraudulent charges was only about $900.
After a panicked call to the credit card company’s Fraud Department and an explanation that the various charges – mostly in gas stations in Southern California and Nevada –– weren’t ours, we were able to breathe our sighs of relief.
Our pain and suffering could have been much worse. Friends of mine have had ALL of their financial information stolen, or they’ve been the victims of phishing schemes with fraudulent emails from what looked like their banks, resulting in tens of thousands of dollars worth of fraudulent charges.
A Global Pandemic of Identity Theft
Gartner defines identity theft as the theft of personal information (such as a Social Security, driver’s license, or passport number) and use of the data to secure a loan or use a credit card illegally.
According to the Identity Theft Resource Center, there were 10 million victims of Identity Theft in the U.S. during 2003-2004. Of these, 38 to 48 percent of victims found out about the identity theft within three months of it starting, but 9 to 18 percent of victims took a whopping four years of longer to discover that it had occurred. Once they find out, the average victim will spend 330 hours of their own personal time repairing the damage and cleaning up the financial mess left behind.
Recent stats from the Aberdeen Group estimate that:
• $221 billion a year is lost by businesses worldwide due to identity theft.
• In 40 percent of businesses, their costs for individual cases of identity theft exceed $15,000.
• Victims typically lose $1,820 to $14, 340 in wages by dealing with their cases.
• Victims spend an estimated $851 to $1378 in expenses related to their case.
How to Prevent Identity Theft From Happening to You
Here’s what we learned to prevent your business from losing its identity:
1) Realize that there are theft rings operating in your city – All they need is a friend at a Department of Motor Vehicles office, a gas station, a grocery store, or anywhere where there’s a high volume of people sharing critical data. They sell your credit card information to the theft ring and the charges start piling up.
2) Look twice at the ATM or Point-of-Sale machine – Many identities are stolen by attaching an ATM card reader to an ATM machine. Some of these add-ons are very clever, designed to blend in with the machine. So if the ATM or POS device looks a bit different today than it has looked in the past, just pass it up. Or better yet, report it to the manager of the retail location.
3) Check your charges frequently online – Don’t wait for your monthly bill to arrive to see if all the charges are yours. Go online to your credit or debit card account and scroll through what is being charged to your account in real time to check for suspicious activity. If you see something that clearly isn’t yours, call the Fraud Department immediately and report any non-authorized charges to your bank within 60 days so you’re not liable for the purchases.
4) Review your consumer credit reports annually – Double check to see that there are no new credit cards being issued in your name that you haven’t applied for.
5) Shred and destroy unwanted documents that contain personal information – This includes bank statements, credit card statements, IRS returns, and other sensitive data.
6) Deposit your mail in U.S. Postal Service collection boxes – Some thieves actually set up collection boxes that look like they’re official, but they’re not. When doubt, go to a post office.
7) Don’t leave mail in your mailbox overnight or on weekends – This is a growing yet simplistic area of theft: People simply steal incoming checks, credit card statements, and new credit cards right out of the box.