Avoiding a Holiday Disaster in Identity Theft

While identity theft can occur at any time of the year, it can be particularly damaging during the holidays.

In the blink of an eye, your identity can be stolen, especially while shopping online.

More individuals are turning to the Internet to do their holiday shopping each year, as 72 percent of American consumers reported they would be shopping online for holiday gifts this season. According to comScore Inc., this year’s Cyber Monday (the Monday following Black Friday) proved to be the busiest online-shopping day in the country’s history, with sales hitting $1.03 billion, an increase of 16 percent from 2009.

While identity theft online is real, so too is a more traditional mode of identity theft the stolen wallet and/or purse.

According to a 2009 Identity Fraud Survey from Javelin Research, 43 percent of identity theft cases result from a lost or stolen wallet, checkbook, credit card or other form of physical document

According to a spokesperson from the Insurance Information Institute (I.I.I.), the busy times of the holidays leads to the perfect environment for thieves set on swiping your credit cards or other financial information. As it turns out, online individuals are hurrying to place an order and may not be clued in to the fact they are ordering from a non-secure site. When it comes to being in the stores, they are crowded and it’s easy to let one’s guard down regarding personal information.

When it comes to the majority of homeowners’ and renter policies, they provide protection for theft of money or credit cards. The amount of coverage, however, is limited (typically $200 in cash and $50 for credit cards). Once you have reported the loss or theft of your credit card to the issuer, you are responsible for only $50 of unauthorized use.

A number of insurance now provide coverage for identity theft tied into their homeowners’ insurance policy. Others, meantime, offer it as either a stand-alone policy or as an endorsement to a homeowners’ or renters policy which can cost approximately $25-$50 annually.

Identity theft coverage provides reimbursement to crime victims for the expense of restoring their identity and repairing credit reports. It will typically cover costs like phone bills, lost wages, and sometimes legal fees (with the prior approval of the insurance company).

As for credit cards using stolen numbers ranks as one of the more common types of I.D. theft.

Many card companies are now utilizing radio-frequency identification (RFID) chips in their credit cards as opposed to magnetic stripes. The advantage with this is faster, better efficient transactions. Take note, however, that RFID might make it possible, in some instances, for thieves to utilize a simple electronic device to gain the information.

As the I.I.I. points out, consumers especially at this time of year need to carefully review their credit card bills and bank balances in order to be sure they are accurate. According to the Federal Trade Commission (FTC), a little more than 50 percent of all identity theft victims found that their identity was swiped by monitoring their accounts.

Among the tips from the I.I.I: Use only authentic Web sites to do online business; be protective of your passwords; be aware of phishing and other scams; be up to date on your computer’s anti-spyware and anti-virus programs.

When shopping at the mall, I.I.I. advises consumers to: Monitor their accounts; shred important papers when done with them; keep personal information in your wallet or purse to a minimum; guard your card when you are shopping; always take credit card or ATM receipts with you, do not just discard them in a public waste basket.

Consumers can make it more challenging for identity thieves to open accounts in their name, simply by contacting the fraud department of any of the three credit reporting agencies to place a fraud alert on their credit report. By law, the agency you contact must inform the other two agencies. The fraud alert informs creditors to contact you prior to opening any new accounts or making any alterations to your present accounts.

In the event you are a victim of a crime, be sure to report it to the credit card issuer and authorities right away. Make sure you ask for a copy of the police report, as you will need it to file an insurance claim or report the crime to the FTC for their help.