Identity Theft and Fraud Scams - Identity theifs can obtain financial information through paper, even trash - fraudsters dig through garbage to find the information they need to steal identities. And by stealing credit card offers or other mail with personal data from mailboxes.

According to 'Your Credit Card Companies' (partnership of financial services companies), only about 9 percent of all credit card fraud occurs online, while the rest occurs offline.

Fortunately, identity theft appears to be declining. According to Visa USA, fraudulent charges make up about six cents of every $100 in transactions on Visa credit cards, and fraud rates have fallen 7 percent a year between 1990 and 2004.

Consumers also are largely protected from unauthorized charges, because federal law limits liability to $50. Both Visa and MasterCard state they won't make cardholders pay for them at all.

Nonetheless, the hassle of having to recover from identity theft and its harm to credit scores, is still troublesome.

The Federal Trade Commission stated credit card fraud was the most commonly reported type of identity theft in 2005.


Here are some tips for identity protection:

When you're sending out documents with your personal information on it, you should make sure they get put directly into a mailbox, and incoming mail should arrive into a locked box.

Not only shred paper documents, but also any computer CDs, disks, etc, that may contain your personal information.

Destroy unecessary credit card purchase receipts and statements.

Make photocopies of both sides of each of your credit cards and put the copies in a secure location so the account numbers and customer services numbers are handy if the card is lost or stolen.

Carry only the cards you plan to use.

Do not have unnecessary, open lines of credit. If you have credit cards you no longer use, contact the issuer and close those accounts, then destory the cards.

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Seasonal Scam:

The Internal Revenue Service noticed an escalation in identity theft scams, particularly emails designed to dupe taxpayers into revealing personal financial information.

IRS and Treasury Department officials have noticed an increase this winter in the frequency and sophistication of "phishing" schemes that use the tax agency's logo to lure victims.

"There does seem to be a proliferation of them this filing season," Richard Morgante, commissioner of the IRS wage and investment division, said Monday. "We have more thieves trying to take advantage of the filing season than we've seen in the past."

The Treasury Inspector General for Tax Administration, which investigates groups or individuals impersonating the IRS, found 12 separate Web sites hosting such "phishing" schemes operating in 11 different countries, from the United States to Aruba to Korea.

The inspector general has gotten more than 400 complaints since the beginning of the year. The IRS has been made aware of about 1,500 cases since November.

In a "phishing" scam, identity thieves send e-mail masquerading as official communication from a government agency, bank or other institution in an attempt to solicit personal data from victims. The data could include financial account numbers, passwords, credit card numbers or other information.

The thieves use the information to steal a person's identity and commit financial crimes, like using the victim's credit cards or opening new ones, applying for loans or filing fraudulent tax returns.

"Phishing" e-mails purporting to come from the IRS often tell taxpayers they're due a refund and direct them to a false IRS Web site. The e-mail address may include "irs.gov," such as tax-refunds@irs.gov or admin@irs.gov.

The communication and Web sites might look like the real thing, but they're not, Morgante said. The IRS does not communicate with taxpayers via e-mail, nor does the IRS ask people for passwords, personal identification numbers or other secret information about financial accounts.

Taxpayers who file their tax returns electronically might get an e-mailed acknowledgment when the return is accepted, but that e-mail would come from the company providing tax software or professional preparation services, not the IRS.

Taxpayers can check the status of their refund through the IRS Web site. That tool asks taxpayers for their Social Security number, filing status and the exact refund due.

Those who receive fraudulent IRS e-mail can contact the Treasury Inspector General for Tax Administration at 1-800-366-4484.

Order your credit report so you can check for identity theft and fix errors you may find. Each credit bureau; Equifax, Transunion and Experian, may report differently and have different scores. Use our free credit check to gauge how well you are currently managing your credit.