New-Accounts Fraud is Most Damaging Identity Theft Crime

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What is the most damaging kind of identity theft?

New-Accounts Fraud is Most Damaging Identity Theft Crime

Identity theft is one of the fastest growing financial crimes. Thanks to the Federal Trade Commission (FTC), easy access to identity theft information for prevention and protection is helping victims navigate the process for damage repair and recovery.

In recent history of identity theft crimes, the most common cases are basic credit card fraud. Using your credit card, or credit card information, the thief racks up charges on your account. Luckily, closing the account at the first sign of fraudulent activity ends the spending spree and the consequences to you are minimal. The law limits your liability to $50, and the major credit card companies dismiss all liability for fraudulent charges.

The most damaging identity theft is called new-accounts fraud. As the name indicates, the thief uses your name and Social Security number to open new accounts rather than simply trying to access and steal from established accounts. Since you are not aware of these new accounts, your credit history and scores may become extensively damaged by the time you discover the theft, such as when your application for a new loan or line of credit is turned down. One in 100 people are victims of new-accounts fraud each year.

The more devastating cases of new-accounts fraud don't happen randomly, but rather the victim knows the criminal. To become more aware of your potential vulnerability, think about your own life and the people in it. Ask yourself if you have a coworker, friend or family member who:

  • Has fallen on tough times and asks you repeatedly for small loans.
  • May be battling a drug habit or engaged in alcohol abuse.
  • Hovers around your desk when you have sensitive or personal information displayed on the computer screen.
  • Looks over your shoulder as you write checks or review bank statements.
  • Studies your credit card when you use it in front of him/her for payment.
Financial hardships and desperate situations can turn trustworthy people into unlikely criminals. For more information on identity theft prevention call the FTC at 1-877-382-4357.

   

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