A recent Federal Trade Commission (FTC) study found that 8.3 million Americans were the victims of identity theft in 2005, and the number is rising. In at least half of the incidents, thieves obtained goods or services worth $500 or less; however in 10 percent of cases, thieves got at least $6,000 worth of goods or services.
Fifty-six percent of all victims were unable to provide any information on how their personal information was stolen. Identity thieves use personal information to impersonate a victim, stealing from bank accounts, establishing phony insurance policies, opening unauthorized credit cards or obtaining unauthorized bank loans.
Use of stolen credit card and debit card numbers is among the most common forms of identity theft. Some schemes use electronic means, including online scams like "phishing," while others might use more old-fashioned methods, such as “dumpster diving”—rooting around in people’s garbage to collect financial information.
The advent of new, “no-swipe” credit cards that transmit account and user information through radio frequency identification may make it possible, in some cases, for identity thieves to use a simple electronic device to capture the information.
Victims of identity theft are often left unable to use existing credit or obtain a new loan, harassed by debt collectors, are subjects of criminal investigations or civil suits and in some instances arrested.
Identity theft may be covered by insurance. Identity theft protection and resolution service is included in some companies’ homeowner and auto policies at no additional cost. The service provides the consumer with a fraud specialist to assist and guide them through the process of restoring and protecting their identity. Some companies include identity theft coverage as part of their homeowners insurance 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 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).
The following companies offer identity theft insurance:
The FTC offers help to victims. File your case with the FTC Consumer Response Center. Include your police report number. Use the FTC uniform affidavit form. 877-ID-THEFT
Courtesy of Insurance Information Institute
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