It seems kind of ridiculous that if someone acquires a single number, your identity can be stolen. Even so, that's the unfortunate reality of identity theft. But how does it happen? And is there anything that can be done to stop these common causes? Let's find out.
How Identity Theft Works
First things first, your social security number isn't necessarily a magic ticket to your identity—it's really more like a cheat code. If you know where, when, and how to use someone else's number, you can effectively steal their identity and cause them significant hardship. Former public and now private investigator Randy Barnhart explains how easy it is to gain a line of credit in someone else's name if you know what to do:
Many retailers offer credit cards, most offer Visa and Master Card accounts as well. If I have someone's social security number, all I have to do is complete a one page credit application using the stolen SSN and hand it to a cashier that is 18-20 years old. The cashier enters the SSN into their system and a line of credit is issued. Depending on the victim's credit rating, the line of credit can be $1000 to $100,000. Usually the cashier hands me a temporary shopping pass with a limited balance that I can use immediately. If they have multiple identities, the thief can open several accounts and max out the credit line very quickly.
Barnhart suggests that this would be simple to stop, as additional security checks would be required, but this would involve the sacrifice of convenience—something we're not always eager to abandon. It's also not the sort of thing retailers want to give up because they make a lot of money off of providing you with a credit line.
Even still, that's just one example of the many problems that can arise from identity theft. We tend to concentrate only on the monetary damage, but much more can occur. Matt Davis, a victim advisor for the Identity Theft Resource Center, explains many of the other issues:
ID thieves can use an social security number to procure your medical benefits, social security, unemployment, file false tax returns, and even pawn off their criminal charges when they have run-ins with the law on you. The possibilities are limitless with the right information and an informed thief. A credit report will not show you if anyone is running up criminal charges as you, using your medical insurance to finance medical procedures, or creating a fraudulent job history report by working under your information.
Basically, your identity is valuable to different kinds of people for different reasons. You might be targeted for a line of credit or because an illegal immigrant needs "lawful" employment and health care. Monitoring your credit report isn't enough. You need to pay attention to everything if you're going to catch a thief.
How to Counter Identity Theft
There's no way you can stop a young retail cashier from processing a credit application they don't know is fraudulent, or much of anything that would stop the thief once they have your social security number. Your goal is to make sure that number stays with you and doesn't get in the hands of anyone you don't trust. The easiest way to procure a social security number from a victim is by going through their trash, as your mail will sometimes have your number on it. There are also other ways your number can leave your protection. As a result, you'll want to do the following:
- If your social security number does appear on any documents, destroy them before you throw them out.
- Never give out your social security number to any third-party unless you know they need it (e.g. a credit application) and you trust the organization. Before handing it over, you may want to ask what measures they take to ensure social security numbers are not recorded. For example, a friend of mine works in a sales job. They're not allowed to have cellphones or any devices connected to the internet. They can't use computers, either, aside from the one provided. This is to make it virtually impossible for them to record any credit card numbers they receive from a customer. While a company is not going to outlaw pencil and paper, therefore not completely eliminating the possibility of your social security number leaving the building, they likely take several countermeasures to help protect you. If you're worried, ask. Whoever is requesting the number likely knows about them since they live with them every day.
- Before handing over your social security number to any company, ask if it will ever appear on a document they send you in the mail. Also find out how it is securely stored on their servers so it will be protected in case of a hack.
- Avoid entering your social security number online unless you are absolutely sure you're on a secure connection and dealing with a company you can trust. If you're not, call them to verify or don't do it.
For more tips, read our guides on protecting yourself from identity theft both online and offline.