Minding your own business has never been easier: Simply don a modern-day "Do Not Disturb" sign -- an iPod or hands-free headset -- and retreat in plain sight.
Unfortunately, a lot of folks are minding your business, too, and they aren't necessarily monitoring your comings and goings or invading your personal space in the checkout line. Nope, their snooping is a lot harder to spot.
Consider a recent laptop theft in Virginia. When's a laptop more than just a laptop? Answer: When it contains the names, addresses, Social Security numbers, and other sensitive data on more than 26 million military veterans.
The mother lode of information on that motherboard could be used to open bank accounts and credit cards, access existing lines of credit, obtain false identification, or perpetrate a number of other credit fraud and identity theft crimes.
Data spree
The Department of Veterans Affairs isn't alone in its data insecurity. ChoicePoint
Time Warner
Credit reality check
The good news is that instances of the crime are going down. The 2006 Identity Fraud Survey Report by the Council of Better Business Bureaus and Javelin Strategy & Research found that the number of victims declined to 8.9 million in 2005 from 10.1 million in late 2003.
Even more revealingly, the majority of credit-related crimes were committed not by a hacker or complete stranger, but by a person the victim knows, such as a relative, employee, or acquaintance. (Keep your eye on your pocketbook at the next family reunion picnic.)
Still, that doesn't let BJ's, ChoicePoint, or others off the hook for information mismanagement. In fact, it puts more pressure on them to alert consumers of possible data breaches -- and sooner.
Seven signs that something's fishy
Spotting signs of credit crime early is critical to keeping financial and administrative damage to a minimum. The Javelin study revealed that victims who discovered the fraud on their own did so faster than those who were alerted via official channels (67 days compared to 101) and also nearly halved the financial damage ($4,431 vs. $8,466).
I recently sat down with Shannon Zimmerman and David and Tom Gardner to talk about identity theft, credit fraud, and Law & Order reruns. We discuss the ways to protect your private information and what to do if you discover that it has been compromised. (You can download the free report here.)
When it comes to credit violations, it's the same as with disease and crummy boyfriends: Early detection is your best defense. To help you spot if anything's awry in your credit file, heed these seven potential warning signs:
1. Strange charges on your credit card or bank debit card statement: Charges for Speed Metal Band Boot Camp would be a standout on most people's credit card bills. But purchases at places like Target, Home Depot, and Petco (the stores of choice for the perp who stole one friend's identity a few years ago) could go unnoticed. (This is particularly common in households where two or more people share accounts and one or more of those people aren't good about putting the receipts in the envelope clearly marked "All Receipts Go HERE!" ... but we're not naming names.)
2. Missing bills: It's not uncommon to misplace a bill. (Check the bottom of your purse, then your back issues of People, to see whether you used it as a bookmark.) But it is uncommon when several months go by without a service provider requesting payment. If an expected invoice fails to materialize, it could mean that a crook has changed your address.
3. Snubs from lenders: The first sign of trouble may come in the form of a rebuff from a lender to whom you've applied for credit. The good news? Being denied that Puppy Palace MasterCard earns you a free credit report! The bad news: It may be a sign that something's awry. If you haven't checked your credit rap sheet in a while, do so. (Here's how to do it for free.)
4. Brain freeze at the ATM: When your PINs and other access codes stop working, that may mean that either you neglected to crack the windows enough when you were painting the walls or someone changed the codes on you.
5. A case of mistaken identity: You know who you remind me of? That other guy named Joe Smith Jr. Not all identity mishaps are part of an evil plot. People with common names -- or those who are a Jr. or II to a Sr. or I in the family -- often find other people's information in their file. To prevent this from happening, make sure to always use your middle name or initial on applications.
6. Dramatically different credit scores from bureau to bureau: There are a lot of reasons your credit score might seem wacky, some of which are quite innocent. Don't immediately assume that something's amiss. But occasionally, a big difference in your score from one credit reporting agency to another (50 points or more, according to TrueCredit.com) may be a sign that something's fishy.
7. Angry phone calls: No, not from your ex. These calls will come right at the climax of 24, from someone demanding that you cough up the payment on something that you didn't actually buy. Gather all the information you can from the demanding party and start investigating.
Credit safety savings
Avoiding crimes of credit might not make you rich, but it certainly can save you a lot of heartache, hassle, and, yes, even a fistful of cash. As noted before, the Javelin study found that cases of credit fraud are down. However, the expenses and time spent resolving breaches are on the rise. In a little more than a year, the cost of the average fraud case has increased to $6,383 from $5,249 -- $422 of which victims have to pony up out of their own pockets. The average amount of time spent dealing with fraud is 40 hours (up from 33 in 2003).
The bottom line on what credit file containment can save you? More than $400 and 40 hours of your precious spare time.
Portions of this article were adapted from "You've Been Hacked," which ran on June 24, 2005.
It's not difficult to create a Fort Knox around your credit file. Download our free report, "How to Protect Your Identity From Being Stolen and Your Credit From Being Wrecked," for tips on thwarting thieves, minimizing prying eyes, and restoring your credit reputation if you do fall victim to identity fraud.
Dayana Yochim owns shares in none of the companies mentioned in this article. Bank of America is an Income Investor recommendation; Time Warner is a Stock Advisor pick; Home Depot is a selection in Inside Value. The Motley Fool has adisclosure policy.
