Tough times are ripe for ID theft

By Liz Pulliam Weston

Your job and your portfolio aren't the only things you have to worry about during a recession. You need to keep an eye on your identity as well.

Crime tends to increase during hard economic times, and security experts believe we may see a reversal in the recent trend of declining identity-theft cases. (The percentage of adult Americans victimized by ID theft was 3.58% last year, according to Javelin Strategy and Research, down from 4.25% in 2004.)

So it's timely that MSN Money has joined with the National Foundation for Credit Counseling, or NFCC, in promoting ID-theft awareness on a new Web site. On the site, you'll find:

• A quiz to assess your ID-theft risk.

• Recommendations for people who've been victimized.

• Consumer tips.

• A map with links to local events that promote ID-theft awareness during National Protect Your Identity Week, Oct. 19-25.

In addition, credit bureau Experian has partnered with MSN Money and the NFCC to give away 10,000 credit-monitoring subscriptions Tuesday, Nov. 25, through the Ask a Credit Counselor message board. We'll remind you as the date approaches.

Think you already know everything that’s needed to protect your identity? Try the following pop quiz:

• Data breaches, in which personal information such as Social Security numbers are stolen or exposed by hackers, have become the leading cause of identity theft. True or false?

• Consumers can prevent criminals from accessing their bank accounts by not writing down their personal identification numbers (PINs). True or false?

• What is "vishing"?

For the answers, read on.

The biggest worry

Database breaches certainly get a lot of news coverage, probably because they remind us how much of our personal information floats around in the ether, beyond our ability to protect it.

As of this writing, more than 245 million consumer records have been exposed in data breaches in the past four years, according to the Privacy Rights Clearinghouse. We know about these incursions thanks to state laws enacted since 2004 that require companies and governments to report such cases.

Only a small fraction of those breaches were used to commit fraud, however.

When the method the criminals used to steal IDs was known, old-school tactics were far more common than higher-tech approaches, according to Javelin. Here's how it broke down in 2007:

• 33% of the incidents were due to lost or stolen wallets.

• 23% of victims were "shoulder surfed" while conducting a transaction (the thief watched over the victim's shoulder as the victim punched in a PIN or used a credit card).

• 17% were victimized by family members or other people they knew. (Read "8 signs you may know an identity thief.")

• 12% were victimized online.

• 7% were victimized as a result of data breaches.

So the answer to the first question is "false."

Continued: How to protect your information

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