Article of Elmar Hilgers, Managing Director and Co-founder of IdentAlink Limited.

(PRWEB) December 12, 2003 -- Imagine the shock of discovering that you’ve spent $500 in a top restaurant, $600 in a fashion store and $1500 in a jewelers. You may think that this is reasonable – if you actually enjoyed the meal, bought the clothes, and purchased the jewelry. Now imagine that while you were struggling to pay your mortgage, feed the kids and finance your car, that somebody else had stolen your identity and was using your bank details to finance their expensive lifestyle. How would you feel? Depressed? Angry? Ripped off?

Unfortunately, the problem of identity theft has reached mammoth proportions, and more citizens are now reporting that their identity has been stolen by an impostor to pay for a luxury lifestyle.

The figures speak for themselves

In the UK, industry estimates say that identity theft cost the country £20.6 million in 2002 – up from £14.6 million in 2001. And on the other side of the Atlantic, the picture is just as bleak: A CBSnews report in 2001 reported, “every 79 seconds, a thief steals someone’s identity, opens accounts in the victim’s name and goes on a buying spree.” But it’s not just inconvenience that occurs if your identity is stolen. The Federal Trade Commission (FTC) estimates that identity theft costs the average victim more than US$1000 to cope with the damage from identity theft. Such damage may include out-of-pocket financial losses, as well as financial costs associated with trying to restore a reputation and correcting false information for which the criminal is responsible.

What is identity theft?

With the subject of identity theft being such hot news throughout the world, many people are now rightly concerned with how they can reduce the risk of being targeted. To understand how we can reduce the risk, we first need to understand what identity theft is, and how it works. There are several ways of committing identity theft, but all revolve around the notion that an impostor wrongfully obtains, and uses, another person’s personal data in such a way that fraud or deception occur. At its most basic level, identity theft may involve accessing funds from an individual’s bank or financial accounts. This may be easily achieved by obtaining secret passwords that an individual may keep for his or her Internet bank account or for use at the ATM. This method, known as ‘shoulder surfing’, involves watching the genuine customer punch a PIN number into an ATM, or listen in to a conversation where a credit card number is given over the telephone. It could even involve looking for written evidence of a PIN number or password left close to a computer terminal. Another increasingly popular method is to go through a citizen’s rubbish bins to obtain copies of his or her checks, credit card or bank statements