The following article was contributed by Ottawa-based financial planner Rick Sutherland, CLU, CFP, FDS, R.F.P.
Identity theft is one of the fastest growing crimes in North America. In fact, identity theft occurs every four seconds. Canadians are increasingly becoming concerned about falling victim to this crime and statistics reveal that 15% of Canadians have already had their credit card used fraudulently. So what exactly is identity theft? What techniques are the thieves using and how can you prevent yourself from becoming a victim?
Identity theft involves the theft of financial or personal information with the intent of establishing another person’s identity. For instance, identity theft will occur when a piece of identification is stolen, such as a driver’s license, and then an application is made for credit cards under the false identity. Where as, identity fraud occurs when the thief uses the new identity to make purchases or gain access to financial accounts.
Criminals do not have to be high tech in order to perform identity theft. One common method is known as “phishing.” This is a term used to describe the act of a criminal posing as a legitimate business, institution or government agency. They send unsolicited e-mails in an attempt to gather personal, financial and sensitive information.
Statistics reveal 24 % of Canadians have received “phishing” identity theft attempts. “Phishers: can replicate web sites so well that an estimated 3%-5% of recipients will unknowingly furnish “phishers” with personal data.
Another popular technique is called “Skimming”. This is a high tech method by which thieves swipe your card and capture your personal information using an electronic device. The theft occurs in an instant, often without the owner of the card being aware.
Further methods used to obtain personal information include “shoulder surfing” which is the use of a direct observation technique such as looking over someone’s shoulder to get information. The thieves learn to memorize numbers quickly as you are typing them. They may even carry a small camera designed to record keystrokes.
Here are some Internet precautions to follow in order to avoid becoming the next victim. Never click on or open e-mail when you are not sure of its legitimacy, even if it looks genuine. Delete the e-mail in question immediately. Avoid e-mailing personal and financial information.
But the Internet is not the only place to be cautious. Keep your eye on your credit and debit card at all times. Regularly review your account statements. Save receipts and compare them with your billing statements. Open bills promptly and reconcile accounts at least monthly. Report any questionable charges immediately and in writing to the credit card issuer. Notify card companies in advance of address changes. Shred or otherwise destroy credit card receipts, bills and related information when no longer needed. Avoid keeping a written record of your bank PIN number(s), social insurance number and computer passwords, and never carry these details with you. A SIN number and drivers licence together gives a thief most of the information needed to create a new identity.
It is important to be attentive to your personal information in today’s modern world. These tips only scratch the surface of how the scam artist works. Be aware and protect yourself. The time, stress and potential cost to recreate your identity can be avoided with awareness and diligence. An excellent resource on this topic can be found at www.phonebusters.com.
This is a monthly article on financial planning. Call or write to Rick Sutherland CLU, CFP, FDS, R.F.P., of FundEX Investments Inc. with your topics of interest at 798-2421 or E-mail at rick@invested-interest.ca.