What is the Real Consequence of Identity Theft and Fraud?

So, how many times has your identity been “stolen”? Me, I’ve been a target of identity theft a half dozen times at least. Not all have been successful attempts, but they have always been a bit scary.

The first time was the most costly, and it occurred back in the mid 1990’s. I was returning home from a work conference, and wanted to call home during a layover at O’Hare International Airport in Chicago. I used a “calling card” issued by my company at a payphone in the airport concourse.

Big mistake. Although I carefully shielded the card itself, and the keypad as I dialed, “someone” was able to record the numbers from the card.

A couple weeks later my office received a bill from the phone card company for nearly $14,000 that could be tracked back to my calling card. The good news was that it was obviously fraud, since there was no possibility I could have made $14,000 worth of calls from New York to several Central American countries 🙂

I did feel very guilty about the incident (perhaps I could have been even more careful?), and became suspicious of almost any “open” activity I engaged in after that. Fortunately, phone cards are not a big issue in the age of cell phones.

Then came the incident in 2010, the first of the cyber crime events.

My wife was shopping for something online, and she didn’t notice the missing “https://” in the address bar for the store’s website URL. In case you don’t know, that means that the data transmitted between her PC and the website was “clear text” instead of being encrypted; in other words, anyone could read it.

And, unfortunately for us, somebody did intercept her debit card data.

However, our Credit Union was on top of the situation and detected several suspicious transactions that originated in other areas of the country, including a charge for nearly $1000 worth of “web hosting”. Since they caught the identity theft activity early, they were able to reverse the biggest transactions.

We still had to pay for a few of the smaller transactions, but I think were were pretty lucky overall. If it had not been for their quick response, we might have had our checking account emptied within a week.


Since then, we have had three more debit cards, and two credit cards, blocked or canceled because of suspicious activity. A few of the occasions have been traceable to specific events (Target’s infamous hacking, and another smaller hacking at Home Depot), but other times – we have no clue.

Normally, we just get a letter from a bank or credit card company telling us a card has been canceled because of “suspected fraudulent activity”, and that we would receive a replacement in a week or two.

It happens frequently enough that it is getting really old now.

So, what are the true consequences of all this identity theft activity?

  1. It’s costly, both to consumers and banks. Consumers lose money, pay extra fees, and often have to take time out of busy schedules to right the wrongs done to them. Banks lose money by covering the costs of fraud and the time and effort it takes to reissue credit cards, bank account, loans, etc.
  2. Credit reports get trashed, and credit reporting agencies becomes unreliable. Most consumer don’t report these fraud incidents and often unaware that bad marks added to their reports.
  3. Retail establishments receive bad publicity and lose money when they are the targets of identity theft attempts. When out data was stolen in the “great Target hack”, Target had to pay for free credit report monitoring for us for an entire year. I bet that affected their bottom line.
  4. It raises the general suspicion level between shoppers and legitimate online (and some “brick-and-mortar”) businesses. Who wants to “take a chance” of identity theft by visiting a new business or signing up for a new service.

Actually, for me the worst part of identity theft is having to figure out what merchants I have a credit card registered with and update them in my online account. This is especially bad when a utility with an auto-pay setup contacts me and says, “Hey, your credit card was declined. We’re going to shut off your phone”, or something similar.

Like I said, it’s getting old. And all indicators are it will get worse in the future.



So, short of “killing” (I kid 🙂 ) the hackers that commit this kind of fraud, what can you do about it?

I suggest signing up for a fraud protection service like Identity Guard (website) and letting them take on all of the worry and mental anguish that comes part and parcel with fraud and identity theft. For less than $1 a day, here’s what they can do for you.

  • Personal assistance if you are an identity theft victim. This is really important since most people don’ know what to do!
  • Identity theft insurance worth $1 Million (!) to cover any financial loss.
  • Credit monitoring for all 3 credit bureaus. I’ve had this, and it is worth it’s weight in gold as an “early warning system”
  • Monthly credit scores from those same bureaus. Keep up on yours, it’s important
  • Anti-virus software for your PC. Fraud hackers are getting pretty tricky – Identity Guard stays ahead of them!
  • Lost wallet protection. If you lose yours, your pretty much out of luck. Identity Guard will sent you up to $2,000 in emergency funds. Last year I lost mine while travelling – this would have been a life-saver

If $24 per month is not in your budget, the company does have discount coverage plans to suit your needs. Visit the website for more information.

In conclusion – you, and only you, can take the responsibility to protect your money and financial well-being. Take a few minutes to find out how you can with the help of Identity Guard.

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