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Identity Theft - How it Happens and How to Protect Yourself

Identity Theft

A few years ago a colleague of mine received a phone call from someone claiming to be his son.  The individual told my friend that he’d been in an accident, his face had been damaged (which is why he sounded different), and that he needed some money.  It wasn’t too large a sum of money (but it wasn’t small either), so my colleague e-transferred it to him.  It was his son after all.  Unfortunately, when he was speaking to his son the next day, he realized very quickly that he’d been duped.  Upon speaking to the police, he was informed that this sort of thing happens all the time, and it’s very difficult for them to find these scam artists because they never stay in the same place very long.  No doubt as technology improves, police will have more tools to track down thieves like this.  At the same time, improved technology for police, means improved technology for crooks, and it sometimes feels like they’re always one step ahead.

This story is just one example of how easy it is to get taken advantage of by creative criminals.   Sophisticated crooks are always looking for new ways to gain access to our bank accounts and wallets, and one of the most effective ways to do that is for them to steal our identity and effectively become us.  Bearing all that in mind, let’s use today’s article to talk about an issue that is a concern to all of us; identity theft.

What is Identity Theft?

The Royal Canadian Mounted Police define identity theft as “the preparatory stage of acquiring and collecting someone else’s personal information for criminal purposes.”[1]  They then go on to define identity fraud as the “actual deceptive use of the identity information of another person (living or dead) in connection with various frauds (including for example personating another person and the misuse of debit card or credit card data).”

In a nutshell, it occurs when someone gains access to your personal information.  Information like your name, address, and date of birth, combined with your social insurance and credit card numbers give crooks a lot of ammunition to impersonate you.  They could use this information to apply for credit cards or loans in your name (with no intention of paying them back).  They also could potentially gain access to your bank or investment accounts and drain them, or open up new ones and commit crimes in your name.

There are even cases of individual’s using someone’s identity to steal their tax refund.  For example, just this year, the Ottawa Citizen reported on the case of Sarah Johnson, an individual that had her identity stolen only to have the thief file a fraudulent tax return and then convince the CRA to change her address and bank account number.  That crook made off with a little over $9,000 in refund.  As of July, Sarah was still not sure who was responsible for the theft, or whether she would be on the hook for the amount paid by the CRA.[2]

How Does it Happen?

Stolen purses and wallets are the most obvious source of identity theft, but from there, there’s really no end to the ways that people will go to obtain your personal data.

On the more traditional side of identity theft, someone might:

  • Sift through your garbage looking for mail and documents you’ve thrown away that may contain useful personal information,
  • Go through your employment records where you work or pay someone at your office to provide them,
  • Attend an open house during a house sale, and then casually look for unlocked drawers that they can go through when nobody’s looking.

As thieves’ technological skills improve, they continue to find new ways to dig up our personal information.  Some of them are as follows:

  • Phishing – We’ve all received these fake e-mails and messages, often from a bank or telecom service we’re familiar with (and may even be using).  The goal of the phishing scam is to convince you that the message is legitimate, and then lure you to a website where you’ll be asked to enter personal data such as banking and credit card numbers and passwords.
  • Stealing information that you’ve inadvertently shared when you’re working from an unsecured or public Wi-Fi location (ex. a coffee shop).
  • ATM skimming, where thieves attach an electronic device to the bank machine that reads our debit or credit card’s magnetic strip.
  • Accessing information and records through a data breach, a problem which seems to be becoming more common.

How can you Protect Yourself?

It’s hard to completely protect yourself.  Thieves are creative and are always looking for new avenues to steal from you; however, there are some definite strategies that you can take so as not to make identity theft easy for them.

Don’t Fall for the Phish:  If you haven’t initiated the contact, then you should never respond.   If you’d like to double check whether the phish attempt was legitimate, find a recent statement from the company, that you’ve received and filed and call their 1-800 number to talk to a customer service agent.  They’ll be able to tell you whether they tried to contact you or not.   Alternatively, just ignore the phish since legitimate companies are unlikely to try to contact you in this way.

Mail:  When you receive mail, be sure to bring it into your house every day.  If it’s junk mail or something you don’t need, don’t simply throw it away; shred it, and if you don’t have a shredder, tear it up multiple times so that the pieces become tiny.  The same goes for in-house files and documents that you’re throwing away.   To be safe, they should all be shredded.

Public Wi-Fi:  It’s tempting to use public Wi-FI because it’s free, while data plans are expensive; however, it’s been proven that many of these locations leave people open to hackers and are unsafe.  As the big telecom company’s continue to move towards unlimited data plans, this hopefully will be a problem that decreases over time; however, in the meantime, public Wi-Fi is not to be trusted.

Passwords:  Change your passwords regularly, and make them more complicated.  Birthdays, last names, nicknames, names of your kids, etc. are not great passwords.  Many sites would recommend that you make them complicated by combining letters, numbers, and sometimes symbols.  Other sites would suggest, word passwords can still work well, as long as it’s something that no one could ever guess.  Find something that’s easy for you to remember, but that doesn’t tie in directly with your personality and interests (i.e. if you like fishing, you shouldn’t have a password with anything to do with fishing in it).

Credit Checks:  It’s a good idea to do a credit check from time to time to ensure that someone isn’t accessing your credit score without you knowing.  Data analytics companies such as Equifax, who specialize in areas such as tracking consumer credit scores recommend checking your credit report at least once per year.  If there’s a problem, report it right away.

Social Networks:  Be really careful about your sharing habits on social media.  Consider Facebook, for example.  If a thief gained access to your Facebook page, how easy would it be for them to get to know where you live, your birthday, your kid’s names and their birthdays, your interests, etc.?  Social media is a good source of information to thieves because it’s an area where we sometimes lack caution.

As a final note, many of these above suggestions apply to our children as well.  As younger and younger people have access to cell phones, they need lessons on safety, particularly in the areas of phishing, passwords, and public Wi-Fi.  The bottom line is that we can’t 100% protect ourselves from identity theft, but at the very least, we don’t want to make things easy for the crooks either.

Should you have any questions about this article, or if you’d like to do an analysis on yourself to see where you stand, we urge you to call us at (780) 426-2400, or e-mail us at gary.koss@manulifesecurities.ca


Call 1-780-426-2400