Identity Theft: What the bad guys do with your personal identity information

The bad guys want your identity. You hear that all the time. But what does it really mean?

Joe is on the lam. He murdered a clerk at an all-night convenience store and cleaned out the cash register. He needs to hide, and hide fast.

He shaves off his mustache, dyes his hair a different color, pops in colored contact lenses, and applies some phony tattoos; but that's not enough. He needs a new name and the papers to go with it. He turns to his friend Mike who puts him in touch with Laura.

Laura is a hacker. Yesterday she sent out a few thousand emails from a mailing list she bought on the Internet. Half of the letters were for a phony Microsoft patch download, the other half were "I'm Rita and here's my photo" letters. As of this morning, 10% of those letters were opened and 5% of the recipients clicked on the patch or the "Rita" photo.

If you were one of the readers who clicked, you now have a Trojan horse on your computer and it opened a passage through your computer's firewall. Now Laura gets to work.

The Trojan has informed Rita that she has free entry into your computer. She logs into your computer from wherever she is located (it could be next door, it could be on the other side of the planet). In the middle of her monitor, a window appears. The window is your desktop, exactly as you see it, only smaller.

Did you do any online banking? Laura now has a copy of your username; besides that, she can apply a program to decode your password.

Is your credit lousy? That doesn't matter to Laura, and it certainly doesn't matter to the murderer, Joe. She knows you're a real person, she has your full name, she knows where you live, and that's enough for her to get your Social Security Number off the Internet and maybe even your Driver's License number. If there is anything at all on your computer about where you were born, she has that too which means she can send off for a copy of your Birth Certificate.

Phony identification documents are created for Joe using your Social Security Number and whatever else Laura was able to obtain - actually, your Social was enough. Joe, thief and murderer of convenience store clerks, is now walking around saying he is you. And, he is free to continue his crime spree posing as you.

The above is only one scenario. Laura can get into your computer simply by attaching viruses like Trojan horses and spyware to web sites, ad banners, forms, and popups.

Everything you do on the Internet is recorded on your hard drive for future reference. Your browser stores your history, cookies, and your password management on your hard drive. Your activity is hidden in Temporary Downloads and Download files, cookies, cache files, Temp files, and files that don't even show in your Directory.

Can you go around every day and clean out these files yourself? No, not really. For one thing, you'd have to run through your entire Directory every few minutes. On top of that, you can easily delete a file that is vital to the functioning of your computer. This is strictly a job for your anti-virus program, your anti-spyware program, and your internet tracks eraser, and these programs must be actively run on a regular basis. That means that besides your regular scheduled maintenance, you need to make an extra run every now and then, especially after a heavy email or surfing session.

Laura can find out all she needs to know about you in just a few minutes, and she can turn around and sell that information more than a thousand times over the next 48 hours.

Laura's been at this for a while, so she has her contacts lined up and waiting. Your credit card information is sold to a criminal info-merchant in Malaysia, one in Nigeria, and one in Moscow. The credit card information is then sold to thieves who order merchandise over the Internet.

Your Driver's License and Social Security information go to phony ID makers in the US and Canada, and abroad to phony ID makers who create Passports, Social Security cards, and Driver's Licenses for foreign drug dealers and money launderers.

Even if you have no credit, criminals will establish credit for you. They will purchase pre-paid credit cards in your name and build them up, increasing the credit line and then apply for credit elsewhere. They forge documents showing they own property (belonging to someone else) and then obtain loans against that property in your name. They get jobs in your name, rent apartments, buy furniture, and lease cars, all in your name. Then they disappear over the hill and leave you with all the liability.

It's not as simple as that - not by a long shot. You have to prove your innocence for each and every event.

If you were arrested, you may have to hire an attorney or use a Public Defender. You may have to post bail. You have to prove you weren't in Minneapolis on the night of the 15th which could take a few hours or a few days.

Financial transactions have to be handled separately, and each separate incidence can take weeks or months to reverse and erase.

And let's not forget that your identity has been sold and re-sold. You can clear up one thief's activity only to be hit with the activity of another one.

If you know or have reason to suspect you are an Identity Theft victim, follow these steps:

File a police report. You need this in order to complete Step 2.
Contact all 3 Credit Bureaus by phone to have your records fraud flagged with a 7-year flag. Alert them that your identity has been stolen. Tell them you will back it with written proof (the police report), and ask them what address to send it to. THIS IS A FREE SERVICE on the part of the Credit Bureaus and it's the law. You will find the reference in the Federal Trade Commission Final Rule on Free Annual Credit Reports. (You will need Adobe Acrobat Reader to read the full text which is linked in the right hand column of Final Rule page.)
- Equifax - Fraud Dept. Number: 1-800-290-8749
- Trans Union - Fraud Dept. Number: 1-800-680-7289
- Experian - Fraud Dept. Number: 1-800-583-4080
Contact the Social Security Administration and ask them to fraud flag your number.
In case of the theft of a wallet, purse, backpack, passport
- Contact all credit card issuers, fraud flag all accounts;
- Contact your bank, fraud flag all accounts;
- Contact the Department of Motor Vehicles, fraud flag your driver's license;
- Contact the State Department and fraud flag your passport.
- In all countries: contact the issuing agencies and request a fraud flag. In the event that this is not possible in your country, please request that you be issued all new documents, close all financial accounts and open new ones.
In the event of mail theft, contact your area Postal Inspector's Office. Tell them that you suspect your mail has been stolen and ask them to check to see that no one has changed your address.
If you provided a copy of your Birth Certificate, then you must be on the alert for the rest of your life. Obtain credit reports on a regular basis and keep a careful watch on all your financial statements.

Next, over time:

Keep an eye on your credit card statements
Watch your bank balance.
Obtain credit reports on a regular basis (you should do this in any event).
Keep following up with the police or sheriff's department on your report.