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Tuesday, 16 October 2012

The Dangers of Identity Theft

Source: creditcards.com.au

Identity theft is the act of stealing your personal information to commit fraud. It usually involves money, but the scariest part about the crime is the damage it inflicts on the victim’s credit record and good name, which takes years to build and/or repair.

To give you a better idea on the dangers of identity theft, here are a few of its effects:

Effects of Identity Theft

On your finances
If you’re victimised by an identity thief, one of the first things that are affected is your finances. The thief could do a lot of damaging things like file a loan in your name, duplicate your ATM cards and get all your money in the account or worse—make counterfeit cheques using your account. When that happens, you have a lot of explaining to do with your financial institution.

On your credit card
Identity thieves have been known to change the billing address of a victim’s credit card to keep their quarry from receiving monthly statements and finding out that the card is being used fraudulently. Thieves may also get a new credit card under the victim’s name. Naturally, the thief doesn’t pay the bill, affecting the victim’s credit report.

On your utilities
It’s the same thing here. Thieves can get a new mobile phone account or another utility service under your name then run up the charges.

On your government documents
Here’s when it turns into a spy flick gone bad: A thief gets your official ID cards (e.g. driver’s licence, social security) under your name but with their picture. With these important documents, a thief can steal your name and benefits, and get you into more trouble by filing a fake tax return.

How to Protect Yourself from Identity Theft

Here are a few suggestions on how to protect yourself from having your identity stolen:

Beware of what you're clicking
If you’re not familiar with the link, don’t click it. If you’re asked to enter any personal information, double-check the site first since there are duplicates out there that try to fool you into entering sensitive data like credit card or account numbers. If your friend’s e-mail looks suspicious because it only contains a link, don’t click the link—and tell your friend his account may have been hacked.

Change passwords regularly
Make sure you change your passwords every so often, perhaps every month or three. And see to it that the password for each account is different. If a thief steals your only password, even if it’s a strong password, your online data is in trouble. When you do change your passwords, make sure they’re stronger than "password".

Leave important documents at home
Unless you need your important documents for a specific purpose, leave them at home. In the wrong hands, these documents could be very damaging to you; perhaps even more destructive than financial thefts because your entire identity could get stolen. Money and credit can be earned back, but mistaken identity could land you in jail.

Tell your bank when you're on a trip
Remember: It’s important to inform your financial institution about a trip abroad because purchases beyond our location are considered unusual and are often declined by credit card companies.

Avoid mobile
Mobile bills payment may be convenient, but it would be safer to conduct these kinds of transactions in your own Wi-Fi network, just in case. It’s better to be safe than sorry.