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Identity Theft Ring Busted – Stark Reminder of Need for Consumers to Be More Vigilant and Have the Right Type of Insurance Coverage
NEW YORK, August 14, 2008 — The U.S. Justice Department’s announcement last week that it had uncovered one of the largest identity theft schemes in U.S. history is a stark reminder for consumers to protect their financial information, according to the Insurance Information Institute (I.I.I.).
"With the sophisticated computer hacking techniques being used today, consumers should carefully monitor their credit card bills and bank balances to make sure that they actually made all of the purchases," said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I.
Identity thieves take personal information and use it to impersonate a victim, stealing from bank accounts, establishing phony insurance policies, opening unauthorized credit cards or obtaining unauthorized bank loans.
In the recent identity theft case, it was alleged that the defendants stole the credit and debit card numbers of unsuspecting consumers via a technique known as ‘war driving.’ This involves using a laptop to locate accessible wireless Internet signals, which enables technologically savvy criminals to hack into the wireless computer networks of major retailers and capture card numbers, as well as password and account information.
According to the Federal Trade Commission’s (FTC) 2006 Identity Theft Survey Report, 8.3 million Americans were victims of identity theft in 2005, and 37 percent of those victims discovered that their identity was stolen by monitoring their accounts. Victims of identity theft are often left with lower credit scores and can spend months, or even years, getting credit records corrected. They frequently have difficulty getting credit, obtaining loans and even finding employment.
Some insurance companies include identity theft coverage as part of their homeowners policy, selling it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy. This coverage provides the customer with reimbursement for the expenses associated with the identity and credit restoration process including phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer). They may also include the added services of a fraud specialist to assist and guide victims through the process of restoring and protecting their identity. Contact your insurance agent or company representative to find out what kind of coverage is available.
To protect your hard-earned money, the I.I.I. has the following tips:
In order to make it more difficult for identity thieves to open accounts in your name, you can also contact the fraud department of any one of the three credit reporting agencies to place a fraud alert on your credit report—by law, the agency you contact is required to contact the other two agencies. The fraud alert tells creditors to contact you before opening any new accounts or making any changes to your existing accounts. The three major credit bureaus Equifax, TransUnion, and Experian.
If you are the victim of a crime, report it to the store in question and the police immediately. Ask for a copy of the police report. You will need it if you want to file an insurance claim or report the crime to the FTC for their assistance. Victims of identity fraud can file a complaint on the FTC Identity Theft Website, or by calling 877-IDTHEFT. The FTC also offers information on the laws concerning theft of credit cards on their Consumer Protection page.
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