Most Identity Fraud Cases Begin With a Lost or Stolen Wallet: I.I.I.

NEW YORK, February 23, 2009 – Low tech crimes such as a stolen wallet or purse can put into motion the high tech crime of identity theft, according to the Insurance Information Institute (I.I.I.).

Forty-three percent of all identity fraud cases in the U.S. last year began when a wallet was either lost or stolen, and 13 percent of those cases were attributable to a ‘friendly’ theft�instances in which a friend, family member or in-house employee wrongfully accessed private financial data, the newly released 2009 Identity Fraud Survey by Javelin Strategy & Research found. Javelin’s survey also revealed that during an economic downturn thieves are more likely to use identifying documents to impersonate a victim, steal from bank accounts, establish phony insurance policies, or open unauthorized credit card accounts.

Other ways that criminals can steal a consumer’s identity include online scams such as “phishing,” in which thieves use email inquiries purporting to be from financial or other online organizations in order to obtain the victim’s private account information illegally. Data breaches involve the unauthorized disclosure of information, usually from a corporate enterprise, that compromises the security, privacy or integrity of their customers’ personally identifiable data.

“To help consumers restore their identity, a number of insurers offer identity theft coverage,” said Mike Barry, vice president, media relations for the I.I.I. “Insurers understand that recovering from an identity fraud scheme can be a costly and time-consuming process.”

Identify theft insurance is usually available as a rider to a home or renters insurance policy. Some insurers offer it as part of the home insurance policy, as an added benefit to the policyholder, Barry pointed out.

Identity theft insurance covers the costs of retaining a fraud specialist to assist and guide policyholders through the process of restoring their identity. Identity theft victims can spend months getting their credit records corrected and may have difficulty getting credit, obtaining loans and, in some cases, even finding employment. Some policies may provide reimbursement for the expenses associated with the identity and credit restoration process, including phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer).

“Consumers should carefully monitor their bank balances and credit card bills to make sure that they actually made all of the transactions attributed to them,” said Barry. In fact, more than half of all ID fraud victims discovered that their identity had been stolen by monitoring their bank and credit card accounts, the Federal Trade Commission (FTC) has said.

The I.I.I. has the following tips to help protect your identity:

  • Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card or passport unless absolutely necessary.
  • Guard your credit card when making purchases. Shield your hand when using ATM machines or making long distance phone calls with phone cards.
  • Always take credit card or ATM receipts. Do not throw receipts into public trash containers, leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.
  • Proceed with caution when shopping online. Make sure that you are buying from a reputable retailer with a secure network.
  • Monitor your accounts. Do not rely on your bank or credit card issuer to alert you of suspicious activity. Carefully monitor your bank and credit card statements to make sure all transactions are accurate. If you suspect a problem, contact your bank or credit card issuer immediately.
  • Order a copy of your credit report from each of the three major credit bureaus. A law that took effect in 2004 entitles you to one free credit report per year. Make sure it is accurate and includes only those activities you have authorized. The three major credit bureaus are Equifax, TransUnion and Experian.
  • Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, any part of your social security number or phone number, or any series of consecutive numbers.
  • Do not give out personal information. Whether on the phone, through the mail or over the Internet, do not give out personal information unless you have initiated the contact or you are confident about who you are dealing with and that they have a secure line.
  • Shred, shred, shred. Tear or shred any documents that contain personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

If you have any questions regarding insurance, contact your insurance company or representative. For more information about identity theft and insurance, go to the I.I.I. Web site

In addition, the National Insurance Crime Bureau (NICB) is dedicated to combating insurance fraud and theft, including identity theft. If you suspect fraud or theft, you can call NICB’s toll-free hotline to provide an anonymous tip that could make you eligible for a reward. The number is 1.800.TEL.NICB (1.800.835.6422). For more information about avoiding and dealing with identity theft, consumers can also go to the FTC Identity Theft Web site. The consumer version of the Javelin study is also available online.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.