According to the US Federal Trade Commission (FTC), almost 3.25 million Americans discovered that their personal information had been misused in identity theft fraud in 2002. The number of Americans affected by this crime has probably increased since then.

Based on FTC surveys of identity theft victims in 2003, 12.7 percent of Americans discovered that they had been the victim of identity theft in the last five years and 4.6 percent said that they were a victim in the last year. [See Identity Theft Survey Report for the details] PDF.
How the Identity Thieves Do It
Identity thieves steal your identity by stealing as much information about you that they can lay their hands on. In a sense your personal information is as good as cash. These thieves are not very choosy either in how they get it. View this 10 minute video by the FTC.

Where do they find personal information?
Well, they look for it in your trash, in your mail box if it is accessible, via the Internet, telephone and in faxes, or by stealing your wallet or purse or burglarizing your home or hotel room. Identify thieves want your credit cards, social security card, drivers license or government ID or copies of your existing credit card bills.

With your personal information, the thieves assume your identity. They actually become you and commit fraud by purchasing goods and services with your existing credit cards. If they have a lot of your information, they may even establish new credit under your name and take a vacation courtesy of you. Don't laugh, this actually happened to me.

Identity Theft costs Money and Time
On average, an identity thief will spend over $10,000 per victim until they are found out. That amounted to $33 billion in 2002 and has now reached $50 billion in lost goods and services. Your credit could be at risk too since you have the burden of proving that you are a victim.

Overall, victims of identity theft had to spend about 297 million hours to try to resolve the problem once they realized they were a victim. that about to 30 hours. If the identity theft involves opening a new credit card account in your name, it can take up to 60 hours to resolve. Even misuse of existing accounts will take about 15 hours to resolve.

How do you know you're an Identity Theft Victim?
The majority of victims (52 percent) find out that they are victims by monitoring their credit card bills. Watch out for those unusual charges and challenge them with your credit card company. Another 26 percent are notified by their credit card company about an irregularity in a bill.

Nine percent have been physically assaulted and lost their wallet or purse and the remaining victims find out when they are applying for credit.

If you are victim of identity theft
Report this to the major credit card companies that you have cards with and to the following credit bureaus immediately.

• Experian
• Equifax
• TransUnion

You should also file a complaint with the FTC and also visit the FTC's identity theft website for more information about your rights and what you can do.

Personal Experience with Identity Theft
Years ago when visiting my mother, I would fly into Miami Florida and rent a car from Avis. As most of us know, all car rental companies will require a drivers license and a credit card before your can rent the car. Six months later, I received a call from Visa demanding that I pay them $50,000 in credit card charges.

When I exclaimed that I didn't know what the h--l they were talking about, they asked me if my address was on 34th Street in Miami, Florida. I asked them why they are calling me in Washington DC if I lived in Miami. I told them that this was incorrect.

Here's what happened. Someone at the car rental company took my credit card number and my driver's license. Using this information, they changed my billing address. At the time, Virginia Drivers licenses used the social security number as the drivers license number. (Very convenient for identity thieves I thought.) The thieves posing as me then went on a six month spending spree taking cruises, buying tires, jewelry, and went to great restaurants and night clubs, etc. Wish I was there.

It was a very unsettling experience and the folks at Visa were not pleasant. Visa wanted their money. I called their customer relations and at that time they did not have a policy of confirming change of addresses. When someone gave Visa my name, account number and social security number, they changed my billing address. In the end I had to pay $50 but also spent a lot of time trying to resolve this mess and restore my credit.

How to Protect yourself

1. At home or when you are on travel, do not throw any bills in the trash or leave them around your hotel room. Go out an buy a paper shredder and use it. Paper shredders are very affordable can really provide protection for your family,
2. If you have a mail box on the street that anyone can open, consider getting a mail box with a lock on it. Better yet, use a mail box slot on your front door,
3. Never carry a social security card in your wallet or purse. This is the big ticket item for thieves. Instead, memorize your card number and keep it in a safe place at home. Medical and dental offices are famous for wanting to know your social security number. When they ask for it, don't blurt it out for all to hear. Write it down on a piece of paper, hand it to the clerk and then get it back. Shred it when you get home,
4. When on the phone or Internet, do not provide your social security number to anyone. It's never needed. If the person insists, hang up,
5. Be especially careful of any company on line posing as a legitimate company. These thieves usually pose as many popular on line merchants such as Yahoo mail, Paypal, etc. They ask you to update your account,
6. When you make purchases on line make sure that your browser displays a little lock on the browser says hpps which denotes a safe connection. Only deal with merchants that you know and who have a digital certificate and
7. Use a secure browser like Firefox to guard against spyware and other digital intrusions that may show your personal information to identity thieves.