You Need Proactive Detection to Stop New-Account Identity Frauds
After an apparent leveling-off in the growth of identity theft a couple of years ago, crime statistics show it's back on the rise, affecting nearly 11 million Americans annually.
April 26, 2010
After an apparent leveling-off in the growth of identity theft a couple of years ago, crime statistics show it’s back on the rise, affecting nearly 11 million Americans annually. What’s more, trends show the biggest increases in types of identity fraud that are likely to go undetected for long periods of time, making them costlier and more difficult for victims to resolve.
The Javelin Strategy & Research 2010 Identity Fraud Survey Report observes increases in the number and cost of new-account frauds, in which a criminal opens new accounts in your name instead of simply using an existing account of yours. These are the frauds you’re least likely to catch on your own unless you proactively take steps to monitor for signs of them.
New-Account Frauds Are Harder to Detect Than Charges to Existing Accounts
Once someone has stolen your information, there are different ways he or she can use it for financial gain.
One of the most common forms of credit fraud perpetrated by an identity thief is to make unauthorized charges or withdrawals on an existing account. They might do this by making online or telephone purchases using your name and account number, by forging checks from your bank account and cashing them or by making a duplicate of your card to make in-person purchases or withdrawals.
Luckily, these kinds of frauds are often recognized fairly quickly so you can minimize the damage. Many card issuers now employ monitoring programs that identify unusual charges and notify you immediately if something seems amiss (they may even place your account on hold until you can verify the activity). And if you check your balances and monthly statements regularly, you’re likely to catch any other unusual activity on an existing account.
New-account frauds, on the other hand, are designed by the identity thieves to stay under your radar. In these scenarios, a criminal uses your personal information to open new accounts without your knowledge, which he or she can then utilize for extended periods of time to rack up bills in your name. If they have successfully created a new account using your name and Social Security number, but their own address and telephone contact information, you’re unlikely to become aware of this fraud until you check your credit report or get a call from a collection agency trying to track down payment.
According to the Javelin Report, 2009 saw increases in both the number and kinds of new accounts opened by identity thieves. There are the kinds of accounts you would expect criminals to open fraudulently, like new credit cards or bank loans, but also:
And one in four of these new-account frauds persisted for a year or more, unlike existing-card frauds which are much more likely to be detected and stopped in weeks or even days.
Only Regular Monitoring Can Detect and Stop New-Account Frauds
In the absence of a card issuer’s monitoring program or your own monthly statements, how can you find out if you’ve become a victim of new-account fraud before the collectors start calling?
Experts recommend periodically checking your credit report as the best way to identify accounts that may have been opened in your name, which may show up as unfamiliar loans or lines of credit on your report or — in the case of mobile phone accounts — possibly only as an inquiry from a company you haven’t done business with.
But unless you check your credit reports very frequently, doing so yourself won’t necessarily nip a new-account fraud in the bud. It could still go on for months before you catch it. That’s why an identity protection product like ProtectMyID can be such a powerful ally in your fight against identity theft. ProtectMyID monitors your credit reports at all three national credit bureaus plus other sources like the U.S. Postal Service’s Address Change Database on a daily basis for activity that might indicate identity theft and alerts you immediately — so if something fraudulent is going on, you can put a stop to it fast.