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Identity Theft - How Identity Theft Happens

Low-Tech Methods


Man getting pickpocketed, mid section
Photographer's Choice/Fredrik Skold/Getty Images
When we consider how identity theft happens, the various scams and other common methods of identity theft tend to fall into one of two categories. Low-tech methods such as dumpster diving and telephone scams are easier to fight against because they take advantage of a victim's personal habits. However when considering high-tech methods of identity theft, there's not much that you can do, because your personal information is stolen from somebody that you gave it to for a business purpose (like buying a house or getting an insurance quote.)

Low-Tech Methods

Stolen Wallet/Purse or other personal theft. The earliest cases of identity theft were probably related to personal information obtained by a pickpocket or burglar. The classic novel, A Tale of Two Cities, is resolved through an assumed identity, and the concept probably goes further back than that. There have been movies depicting identity thieves, like Sommersby, and Catch Me If You Can, that cast a kinder light on the criminal – but the crime is still identity theft.

A large number of cases involving children's identity theft are due to a parent's misuse of their own child's identity, but there are still plenty of cases were a friend of the family or even another family member was the culprit. The best thing to do is lock personal information in a safe, although bank deposit boxes are still a great idea if you can afford one. The worst place to keep birth certificates, Social Security cards, insurance documents etc. is in the top right-hand desk drawer.

"Dumpster Diving" has been around for quite awhile, too, but up until recently it was confined to detectives, private investigators, and occasionally industrial espionage (like trying to find out who your competitors clients are). Most Americans don't realize that once you throw something in your trash and put it out to the curb for pickup, you don't have any "expectation to privacy", even though there are sound legal arguments otherwise.

There is a fairly simple fix for this, though. Keep a paper shredder or "burn bag" next your desk, and use it on mail that has your personal information, like bank statements, credit card statements, utility bills, or letters from bill collectors.

Mail/Phone/eMail Scams are all still categorized as "Low-Tech" because they rely on the Law of Averages to collect information. The Law of Averages basically says "If you do something often enough, a ratio will appear." This is where we get things like batting averages, poker odds, and door-to-door sales. Email scams are probably the most well-known, because the scam artist can send out thousands at one time. But these are really just phishing techniques to drag you into conversations by telephone, so the telephone scam is the real danger.

    These scams go by many names, but "phishing" is the most commonly used. There are hundreds of scams in this category, but they all can be avoided by using a few simple, common-sense rules:
  • Reputable financial organizations will not contact you by eMail to discuss financial matters. Period. You may get prospecting letters in the eMail asking you to use a certain investment firm or apply for loan at a certain bank, but legitimate business is still done by phone, fax or in person.
  • Do not give out personal information over the phone. If you originated the call, or you are certain you know the person on the other end, you can feel fairly safe. If you're not certain, ask for a number you can call back. Then call the business the caller said they represent. Ask if the person works there. If so, again, you can be fairly confident that your information is going where it should. If not, you have a phone number to help law enforcement track down the criminal.
  • Don't let someone repeat your credit card number over the phone. You never know who may be standing behind the pizza girl taking your order on Friday night. She will want to make sure she's got the right credit card number, though, just let her know you'll read the number twice for verification.
  • Don't send mail in your mailbox. Drop it off at the post office. Identity thieves love to collect bill payments or credit card payments. Not only do they get your credit card number, but if you're paying by check, they get your account number as well.

These Low-Tech methods may or may not be part of a "Piracy Ring". These are organized networks of individuals who "recruit" an identity thief who has access to information. For example, someone might approach the waitress at a restaurant and offer her $5.00 for every credit card number she can steal. That can be done while reading your card at the check-out, and most people don't even notice when it happens. And if you asked the waitress, it probably wouldn't even occur to her that she was committing identity theft.

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