Imagine heading down to spring break in Mexico armed with $5 and a credit card. You politely greet the concierge and offer payment in the form of credit. This is when it happens, your credit card is denied.
Joshua Wheelock, an engineering senior, discovered in March that his credit card had been denied and at first thought nothing of it.
After returning to the United States and only after getting in contact with his bank did he understand why his credit card had been declined.
Chase Bank notified Wheelock that $1,800 had been withdrawn from his credit card and someone had made multiple purchases in Europe.
Wheelock is the victim of identity theft, a crime that Consumers Union reports has happened to over 100 million U.S. residents since 2005.
What is identity theft?
ExpertLaw.com describes identity theft as somebody obtaining and using your personal data without your knowledge to perform a criminal act.
The most common criminal act is the use of financial fraud. This includes fabrication of credit to apply for a credit card, using a card to purchase an item or take money from a bank account.
Who is the target?
Identity theft does not solely target those who have well-established credit histories, it also victimizes people who may not have much established credit, such as college students who do not periodically check their financial standing.
"It makes sense," Wheelock said. "It's an age group where there is little to no credit history and because of this many of the people are ignorant to the truth about how easy it is to have your identity stolen."
According to the Federal Trade Commission, Americans between the ages of 18 to 29-years-old are the most likely to be the victims of identity theft.
Students are made to be easy targets because their information is often easier to obtain and many do not closely monitor their financial accounts.
Lomit Patel, director of marketing for TrustedID said that the 18 to 29-year-old age group will continue to be targeted due to their lack of knowledge and understanding of what identity theft is.
"They are the most vulnerable due to their increased usage on the Internet and being targeted with pre-approved credit card offers," Patel said.
But identity thieves don't just target a specific demographic. Theft is an act of convenience and whichever person is most vulnerable is more likely to become the victim.
Nationwide Mutual Insurance Co. has conducted surveys to show that in the southwest, two ethnic groups are more likely to be targeted.
African American and Hispanic victims take a month and a half longer than the general public to discover identity theft, according to a 2006 survey.
This survey also concluded that criminals were more likely to target the personal checking and savings accounts of African Americans and Hispanics over other ethnic groups.
"We have some ideas as to why this is happening," said Charley Gillespie, a spokesman for Nationwide insurance. "It may be because they are being underserved by their banking institutions. However, in some instances there is distrust with the banking system."
Kirk Herath, chief privacy officer for Nationwide, said in a press release that it is uncertain as to why specific ethnic groups take longer to uncover identity theft but feels it is very important that everyone educate themselves about the high risks involved.
He also said it may be more of an educational issue and that Nationwide would need to partner with a university to further the study.
Why are we vulnerable?
Due to the impersonal nature of money transactions in today's society, it is easier for criminals to gain access to peoples' personal information.
Credit card transactions to make purchases online, online bill pay and the growing number of banking options all make it possible for a criminal to access financial accounts without ever showing proof of identity.
They get access without revealing any unique attribute that the owner of the account would have, such as fingerprint or voice recognition.
How do they get personal information?
According to multiple online conduits, including the Law Offices of Aaron Brown who is an identity theft specialist, Chase Bank online and Visa.com; there are seven basic ways identity thieves obtain personal information.
1. Theft — usually of purses, wallets, or postal mail.
2. Dumpster Diving — looking through garbage or the dumpster of a business for discarded items containing personal information.
3. Internet — misleading people to obtain personal information from online, particularly by e-mail or through a Web site.
4. Illegally obtaining information from legitimate businesses such as a doctor's office or from employee files.
5. Pretending to be a creditor in order to get personal information to access a credit report.
6. "Shoulder surfing" — personal information is obtained in a public space, many times it is someone looking over a shoulder as personal information is viewed or eavesdropping on a cell phone call.
7. The promise of prizes or awards — communicating through e-mail or telephone and saying a prize has been won, conditioned upon providing or verifying personal or financial information.
What do identity thieves do?
After a thief has stolen an identity the most common practice is to make purchases, running up a credit card bill until it has triggered an "unusual activity" report with the banking institution.
"The card's unusual activity started before I had left for spring break and was being used in Europe," Wheelock said. "The person had withdrawn the max amount on my card. At this point I felt real bad. I didn't know what to do."
According to Chase's fraud department, when a credit card becomes overused in a short amount of time a watch is placed on the account and the owner of the card may be notified of the excessive purchases. It might also be triggered by a location dispute, as in Wheelock's case.
Thieves have also been known to apply for credit cards, seek out loans or government benefits, open bank accounts, forge checks, obtain wire transfers of money and to start utility services in the victim's name.
In most cases the fraud can be taken care of by an accredited professional.
"My creditor helped me along the way," Wheelock said. "I had to fill out some papers and prove that I wasn't in Europe and that was really all I had to do. The process was arduous and took along time to sort through."
Can thieves buy personal information?
Identity thieves are hacking into the networks of both large and small institutions to steal information relating to their clients.
According to Microsoft IT Security, "Anyone with a notebook computer, an inexpensive wireless network card, freely downloaded software, and an antenna made from a can of potato chips can hack into wireless networks in homes and companies from hundreds of feet away."
Once in the system hackers can upload software that downloads information files right to their computer. It makes trading this information on the Internet through chat rooms and other communication orientated sites much easier.
In chat rooms you can even bid on identities.
The price of your identity?
Regular credit card number: $1
Credit card with 3-digit security code: $3 to $5
Credit card with code and PIN: $10 to $100
U.S. social security number: $5 to $10
Mother's maiden name: $5 to $10
Even though companies are not forced by law to notify customers if security has been breached, they are obliged under the Data Protection Act to secure their clients' personal information.
Companies have compensated many victims of financial fraud as a result of a security breach, but many feel that these companies should be providing proactive solutions to the growing number of identity theft threats.
The growing need for preventative protection has lead to an explosion in the identity insurance department.
Companies such as TrustedID and LifeLock are low cost solutions to placing your identity protection in the hands of professionals.
"This aggressive growth trend in identity theft is going to get worse before it gets better," said Patel.
Reach the reporter at: casey.kelsey@asu.edu.
