How Identity Theft Happens

Officials say much of identity theft comes down to hands-on mischief - things like ’Dumpster diving,’ in which criminals sift though trash to find a credit card statement or solicitation that someone didn’t tear up, and ’shoulder surfing,’ where criminals try to spot calling card and personal identification numbers.

Knowing which tricks thieves prefer remains a quantifiable mystery. 80% of the victims who call us say they have no idea how it happened, says Joanna Crane, program manager of the Federal Trade Commission’s Identity Theft Program.

Officials also acknowledge that the Internet has opened new avenues for theft. If nothing else, the Web allows thieves to send stolen data to most any worldwide location.

Fake Mortgage Brokers

One popular scam involves fake mortgage brokers who dangle super low rates if the applicant is quick to provide personal data. Still another uses emails in which the sender poses as an Internet service provider asking for information: Even though people are told that ISPs will never ask for your Social Security number, one scam was just shut down after 70,000 people responded to their emails, notes Crane.


Then, as if the cost of some restaurant meals isn’t unsettling enough, there’s the infamous "skimmer."

A skimmer is about the size of a credit card, says Ellen Moriwaki, a senior product manager at CyberSource, a payment processing and risk management concern. And a criminal buys off a waiter in a restaurant. When you give him your credit card, he rings it up but also runs it through the skimmer, which collects your credit card information. In exchange for $50 a card, a waiter can gather as many as 100 credit cards a night.

Social Security Card Fraud

A Social Security card can also reap long-term fraudulent benefits. Virgil Gardaya, a corporate vice president with the credit bureau Equifax, notes that a stolen wallet containing a Social Security card lets a criminal quickly set up dummy bank and savings accounts. The very presence of the account may prompt the bank to give the criminal a credit card. From there, the con artist may waste little time maxing out the card, or take a bit more time and build up the card’s buying power. That can mean fraudulent purchases as pricey as cars and boats.

When I moved five years ago, I was alerted that two new accounts had been opened up under my name, adds Gardaya. They actually had statements being delivered to two different addresses.