Stolen lives: identity theft is the country's fastest growing crime. Here's how to protect your most valuable asset--you!

WHEN TAHIRA SCOTT MOVED IN WITH her cousin, she was looking forward to saving money and establishing a good credit history to buy a home of her own. Instead, her plans were ruined before they began. The 31-year-old leasing consultant from Wilmington, Delaware, was 20 when she became a victim of identity theft at the hands of the person she least suspected--her cousin.

There were some warning signs, says Scott. "We started getting bills in someone else's name." Then two employees from a car dealership came to Scott's job to see if the person who had tried to purchase a vehicle in her name was actually her. Although she was a little suspicious, Scott says she had no idea about her cousin's misdeeds. "I just thought it was a mistake," she says.

After a year, the two women parted ways amicably, but Scott says her cousin began avoiding her. Another relative informed Scott that her cousin had stolen others' identities and that she, too, may have been victimized. Scott delayed checking her credit report, afraid of the possible damage, but subsequently contacted the police and her credit card companies. She learned that two car loans and a cell phone account had been opened in her name. "The cell phone bill was several hundred dollars," says Scott. Even worse, the car loans totaled thousands of dollars.

According to a Federal Trade Commission survey, some 30 million people have fallen victim to identity theft in the past seven years. This crime is quickly becoming an epidemic because it's relatively easy to get hold of other people's personal information, says Johnny May, an independent security consultant and author of Johnny May's Guide to Preventing Identity Theft: How Criminals Steal Your Personal Information, How to Prevent it, and What to Do if You Become a Victim (Security Resources Unlimited L.L.C.; $14.95).

Identity theft occurs when someone uses your name, Social Security number, date of birth, or other personal information to commit fraud. Like a thief in the night, these crooks are lurking, watching, and waiting to make off with your valuable information. Fortunately for Scott, the car dealership employees realized she was a victim of identity theft after their visit to her job and the bills were traced to her cousin.

BLACK ENTERPRISE has outlined some ways you can spot identity theft, what to do if it happens to you, and how to guard against it in the future.

IDENTIFY THE CRIME

Victims have little reason to be suspicious until they are notified by a creditor or the police. And aside from the financial damage it can cause, being victimized is often mentally and emotionally traumatic. "I felt betrayed and violated," says Scott. "I had no idea. I trusted her, and you don't want to believe that your family member would do that. It was overwhelming and distressing. I would have written her a check or money order or anything. She was the last person I thought would do that."

People of all ages can be victimized, says Diane Terry, senior director of TransUnion's Fraud Victim Assistance Department. A recent report by the FTC revealed that 29% of identity theft victims are 18 to 29, 25% are 30 to 39, and 20% are 40 to 49. "If you have good credit, you are at risk of becoming an identity theft victim," Terry says. "Thieves are looking for a good credit history. It allows them to work faster and do more damage." But, those without stellar credit are at risk, too.

The most common types of fraud associated with identity theft are opening new credit card accounts and taking over existing ones. But it doesn't stop there. Multiple bank or credit card accounts may be opened at different banks. Thieves also use personal information to steal and transfer money, write counterfeit checks, and obtain employment.

"Most thieves obtain information via low-tech methods such as Dumpster diving or internal employees," says May. Businesses targeted most by Dumpster divers--people who sift through trash in search of bank and credit card statements, pre-approved credit offers, and tax information--include banks, hospitals, restaurants, hotels, and travel agencies.

Being denied credit or employment is another common method of discovery for identity theft victims. If you receive calls or letters indicating that you have been approved or denied credit for which you never applied, unusual credit card or utility bills in your name, or a credit card statement listing unrecognizable purchases, you may have been victimized. Also, be suspicious if you no longer receive credit card statements or other important mailings.

TAKE ACTION

Scott's cousin obtained her information from her wallet, which Scott kept in open view in the apartment they shared. To protect yourself, follow these tips from the experts:

* "Never give out personal information over the phone," says Jonathan Cherry, spokesperson for the Secret Service. "No credit card company will ask you for that information via phone or e-mail." Likewise, never give your personal information to anyone unless it is required.

* Keep track of your monthly statement. One reason criminals get away with identity theft is that the victim doesn't check financial statements for mistakes. Make sure to read statements carefully and dispute any inaccuracies immediately.

* Limit what you carry in your wallet. Avoid carrying your Social Security card, birth certificate, passport, or seldom-used credit cards. Also, keep your ATM receipts with you instead of throwing them away. This prevents thieves from discovering your account balance and possibly the last four digits of your debit card.

* Check your credit reports. "There is an inquiry section in your credit report that lists everyone who has granted you credit," says Robin Holland, senior vice president of operations at Equifax. As of Sept. 1, 2005, can get a free, annual credit report www.annual creditreport.com from each of the three credit agencies.

* Secure your mail, "Never leave mail in your box," says Holland. It is safer to leave it in postal service mailboxes. Instead of having new checks mailed to you, pick them up from the bank.

* Shred or tear up any documents that contain personal information. All of the experts strongly recommend buying a shredder, preferably cross-cut style, which cuts documents and credit cards, across the length and width. Put out your garbage on the morning of pickup instead of the night before. These actions decrease the probability of becoming a victim of identity theft through Dumpster diving.

GET HELP

If you do become a victim of identity theft place a fraud alert with one of the three major credit agencies. The agency you contact will notify the other two. Then request a copy of your credit report from each agency and dispute anything you think is fraudulent. Be prepared to fill out an affidavit to dispute unauthorized bank or credit card accounts. You can print out an affidavit at www.consumer.gov/idtheft. The affidavit should not be sent to the FTC or any other government agency; it is only for dispute resolution.

Next, report the incident to the police and insist on a police report. Keep a copy for your own records. Sixty-one percent of the identity theft victims surveyed last year by the FTC did not inform the police. Scott contacted the police and was able to find out exactly what happened.

Make sure you notify your creditors if your credit cards were stolen, as well as your bank if your checks were stolen. Ask for new credit cards, and close any existing bank accounts and open new ones. If your debit card gets stolen, get a new one. And remember to use a completely different password for additional security. Be careful of establishing new credit with a different Social Security number, however. Having two may lead to confusion when trying to repair your credit report. Log on to www.identitytheft.org for more tips.

Keep in mind that it may take months or years to fully repair your credit. Consequently, it is important to keep a log of everyone you speak to, says Cherry.

Although it took some time, Scott repaired her credit. A few years after the incident, she took out a loan to buy her first car with a co-signer. She's still making plans to be a homeowner.

There is no specific timeline on how long it may take to repair you credit, says Terry. "But if you file the law enforcement report and follow all the steps, it can go very smoothly."

RELATED ARTICLE: Protect yourself with fraud alerts.

With a fraud alert, you will be informed anytime someone tries to obtain credit, insurance, or employment under your name.

Each agency has a fraud alert system. TransUnion's ID Fraud-Watch system (www.transunion.com) provides up to $25,000 of identity theft insurance. You also receive a credit report four times per year for about $44 per year ($10.95 per quarter). TransUnion also has a Fraud Victim Assistance Department. "There is no charge for assisting victims," says Terry. "We add an alert to the credit card, which entails putting a red flag on your file, and notify you if there are potential changes to your account."

Similarly, Equifax has an identity theft monitoring program called Equifax Credit Watch (www.equifaxocom). Consumers can pay for the service by the month or year. "Every time there is a change to your credit report, you get an e-mail within 24 hours, along with a phone number to call if it is something you don't recognize," Holland says. "You only have to get one credit monitoring system. It covers all three agencies."

Although Experian (www.experian.com) does not have its own credit monitoring service, you can still place a fraud alert with the agency. The initial fraud alert stays on your file for 90 days. The extended fraud alert lasts seven years.

To report fraud, call Equifax at 800-525-6285, Experian at 888-387-3742, and TransUnion at 800-680-7289.

RELATED ARTICLE: Legislation and identify theft.

The Identity Theft and Assumption Deterrence Act, enacted in October 1998, makes identity theft a crime punishable by fines and between 15 and 30 years in prison.

The U.S. Postal Service and government agencies such as the Secret Service, FBI, and Social Security Administration investigate violations of the act. The Department of Justice prosecutes federal identity theft cases.

Last July, the Senate passed the Identity Theft Penalty Enhancement Act, legislation that increases existing penalties for identity theft. Those who commit aggravated identity theft--stealing another's identity to commit other crimes--must serve a mandatory two-year prison term, in addition to whatever penalties are carried by the related crime. Those who commit identity theft in connection with a terrorist act must serve an additional five-year mandatory prison term. And from fiscal year 2005 to 2009, the Senate has allocated $2 million per year for the Department of Justice to investigate and prosecute identity theft and credit card fraud.

Also in July, Sen. Patrick Leahy (D-Vt) introduced the Anti-Phishing Act of 2004 but it wasn't passed. In February 2005, Leahy reintroduced and subsequently passed the bill as the Anti-Phishing Act of 2005. Under the terms of the bill, it is a federal crime to create Websites or e-mails that mimic legitimate businesses for the purpose of collecting personal information from consumers, a practice know as phishing. Phishers can receive up to five years in prison and a $250,000 fine.