Identity Theft Costs – How Much Time & Money Does ID Theft Cost the Victim?
June 5, 2008
Identity theft can take several different forms, all of which will cost you some amount of time and/or money. There are three main types of identity theft, I’ll take a look at how you can be affected by each one, starting with the most basic and moving up to the most sinister. Each subsequent level of id theft requires more information and sophistication to pull off and also ends up costing you more time and money.
Stolen Account Information
The most basic type of identity theft is account fraud, where someone finds out your account information and uses it to buy something or take some of your money. A common example of this is a thief using your credit card to make purchases.
Credit Card Hijacked
One holiday season I was given the unfortunate gift of this type of identity theft. I opened my credit card statement in January to find a bill much higher than I had expected. I discovered that someone had ordered hundreds of dollars of goods through a catalogue back in December. I did receive that catalogue but had not ordered anything through it in years so I new something wasn’t right.
Identity Theft Discovery & Research
This is typically how the stolen account form of id theft is discovered, a person looks at a bank statement or credit card bill and discovers purchases or withdrawals that they didn’t initiate. Your main cost for this type of crime is mainly the time it takes to contact the authorities and businesses involved in the transactions and prove you weren’t the one behind them.
In my case I called the catalogue and my credit card company to report the problem. They opened an investigation and I had to take an afternoon to go file a police report. It turns out the catalogue hadn’t followed policy during the busy holiday rush. They had allowed the huge order to be shipped to an address different than the billing address, which was an abandoned house downtown.
Identify Theft Costs
Immediately upon reporting the theft, my credit card company flagged the card and sent me a new one. After the investigation was finished Visa refunded the cost of the purchase on my card. I wasn’t out any money, my costs were:
- Inconvenience of cancelled credit card
- Time spent corresponding with:
- Credit card company
Preventing Identity Theft
I never found out who placed the order or how they got ahold of my information. Hundreds or thousands of people have accessed my credit card details over the course of my life, every time I buy something the person taking the order is provided that information. There’s not much you can do to prevent one of these people from being dishonest and misusing your data.
The best answer is to simply monitor your financial statements for any irregular or unexpected transactions and follow up on them right away. I did have another case where someone used my Marriott account to book hotel rooms in another state. The problem there was I had a credit card on file, the perpetrator didn’t need to steal my card information since it was already in my profile and authorized to spend.
Luckily I had the account setup to send me an email anytime a transaction went through. I was able to contact the hotel right away and cancel the charge but I learned the lesson, you can prevent this type of fraud by not keeping a credit card on file. It’s not quite as convenient but it can prevent thieves from using a backdoor into this type of identity theft.
Next time I’ll talk about the second general type of identity theft and it’s costs to you.
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All posts by Ben Edwards