Protecting Yourself From Identity Theft –
Online and Offline
by Dave Steer
eBay's Senior Manager of Trust & Safety Marketing

Last year, I received an ominous voicemail from a sergeant in the Los Angeles Police Department. When I returned his call, he told me that the police had just apprehended a con man who was suspected of stealing people's credit card numbers. They had caught the fraudster attempting to reserve a hotel room with my credit card! The criminal had already put more than $1,000 on my credit card in less than 24 hours.

While it was scary that someone had assumed my identity and had already caused damage, this story has a happy ending. I simply called my credit card company, explained the situation, and had my charges reversed. In all, it took me only a few hours to resolve this episode.

While my story didn't happen on eBay, it could have.

Identity theft (ID theft) is quickly becoming one of the fastest growing crimes, impacting more and more people. In 2003, the Federal Trade Commission issued a wide-ranging report which detailed the growing damage caused by identity theft. The report concluded:

• 9.91 million Americans were victims of ID theft in 2003.
• The average loss per ID theft victim in 2003 was $4,800. While most of this cost was absorbed by financial institutions, the report found that each victim ended up spending an average of $500 from their own pocket.
• Victims spent an average of 30 hours resolving their ID theft problem.

To explain why ID theft is turning into a problem, look no further than how you use your personal information in everyday situations – the passwords for all of your online accounts, the loyalty cards at your supermarket, the various ways you use your birth-date information, phone numbers, addresses, and on and on and on.

With personal – and sometimes sensitive – information being used in many situations every day, fraudsters have found increasingly inventive ways to get their hands on it. Just think about all of the potentially sensitive information you regularly throw into the trash bin, enabling bad guys to simply go "dumpster diving" to steal your personal information and your identity.

The bad news is that identity theft is a crime that affects consumers at home, at work, in the shopping mall – and also online. The good news is that vigilant consumers who exercise common sense, monitor their account status, and protect their personal information are the best equipped to safeguard their identity.

Here are some tips on how you can protect your identity and stop fraudsters in their tracks:

1. Monitor your accounts.
When you keep a close eye on your account, you can spot suspicious activity and take steps early to notify the authorities if necessary. You should regularly monitor the accounts that you hold with your bank, phone company, and eCommerce providers. It's also a good idea to order a credit report every year and make sure that it is accurate.

2. Get a shredder.
One of the easiest ways to steal someone's identity is to look through their trash – you'd be amazed at the sensitive information that most people unknowingly place in their rubbish. You'd be even more amazed by how often the tactic of "dumpster diving" is used by fraudsters to get hold of their victims' sensitive information. Shredders are an inexpensive and convenient way to destroy anything that has personal information – before putting it in the trash.

3. Never reply to emails that ask for personal information.
Email is a risky way to send your personal information – especially financial or other sensitive information. You can help protect your identity by refusing to give personal information (such as Social Security Numbers and account passwords) via email and by never downloading email attachments that are sent from someone you do not know.

4. Use strong and unique passwords.
Good passwords have two things in common. First, they include a combination of letters and numbers that is difficult for others to guess. This helps prevent someone, whether it's a bad guy or a software virus, from getting hold of your password. A suggestion about choosing a password that is a word that can be found in the dictionary – don't! These days, fraudsters have become clever enough to write software programs that try to match words found in the dictionary with your password.

Second, a strong password should be unique to the account. Just as you wouldn't use the same key for your car, your office, and your house, choosing uniquely different passwords for each of your accounts serves as a good second line of defense in the event someone gets hold of one of your passwords. Here are some more tips on choosing a good password.

5. Know what to do if something goes wrong.
Restoring a person's accounts and credit report once he or she becomes a victim of identity theft can be a frustrating and time-consuming experience. If you're ever a victim of identity theft victim, don't lose heart. Take prompt steps to resolve the situation and restore your security.

Here are some basic steps you can take if you're a victim of identity theft:

• Contact your credit card company.
  If your account is associated with a credit card number, you should contact your credit card company to cancel your account and alert them to the situation. Follow your credit card issuer's instructions for formally documenting the problem.
• File a police report.
  File a report with your local police or the police in the community where the identity theft took place. Make a copy of the report and note the date it was filed in case your credit card company or bank needs proof of the crime.
• Contact your bank.
  If you provided bank account information, you should contact your bank and ask for instructions about protecting your account.
• File an identity theft complaint with the Federal Trade Commission.
  The Federal Trade Commission (FTC) maintains a database of identity theft cases. Information submitted to the FTC is used by law enforcement agencies to assist with investigations. To file a complaint with the FTC, use one of the following options:
  Web site: www.consumer.gov/idtheft
  Fraud Hotline: 202-326-2502
  
  On its website, the Federal Trade Commission offers an Affidavit of Identity Theft that can be notarized and then sent to creditors and agencies to help retain your good credit rating.

• Contact credit bureaus.
  You should also report your case to credit bureaus such as TransUnion, Experian, and Equifax that have an impact on credit ratings and security.

Here are some additional resources that you may find useful:

• Deterring Identity Theft (on eBay's Security & Resolution Center)
• Protecting yourself from Identity Theft (Help page)
• Identity Theft Resource Center (a national nonprofit organization that focuses exclusively on identity theft)

While these tips are not iron-clad ways to prevent identity theft, they are smart steps that you can take to minimize your risks. Following these steps can also best ensure that, like my story above, there is a happy ending even if someone steals your identity.

Coming next month: How eBay works with law enforcement around the world to fight crime.