The concept of identity theft sounds like fantasy, like something out of a science fiction thriller starring Arnold Schwarzenegger. Or another one of Oliver Stone’s conspiracy flicks. But the idea isn’t as far out as it sounds. Unfortunately, it happens every day. To people just like you.

Identity theft is now one of the most common types of fraud. And it’s growing. Fast.

According to the Federal Trade Commission, complaints of identity theft have tripled compared to last year. Half of them concerned stolen credit card numbers or illegitimate accounts. Another 30 percent involved pirated telephone or Internet accounts. And around 20 percent involved bank or loan fraud.

An estimated half million people have their identity stolen each year.

As with all forms of theft and fraud, there is no foolproof way to prevent it from happening. But you can take measures to lessen the odds, and learn what to do in case you do become a victim.

What constitutes your identity? That is, what exactly do identity thieves steal? For starters, your identity includes your name, address, phone numbers, bank account numbers, credit card numbers, Social Security number, and tax return information. But the list goes on, encompassing any and all personal data that, in the wrong hands, could enrich a crook and impoverish you.

If someone were to get ahold of this type of information — even a little bit of it — they could "become" you, at least for purposes of abusing your financial well being for their own gain.

Nothing is as chilling, nothing cuts to the bone, like identity theft. If someone bilks you out of your cash in a game of three-card monte, you may feel dumb, you may be a little poorer, but you retain your good name. If you become a victim of identity theft, it could take you a long time to get your good name back.

One of the most frightening aspects of identity theft is that you may not know for a long time that your name’s been misappropriated. When your car is stolen, you find out about it when you walk out to the parking lot where you left it and see nothing but broken glass and some oil stained tar. When your auto mechanic scams you, you might get a clue when the muffler falls off half a block from the shop.

But with identity fraud, you often don’t find out until you hear from people you don’t really want knocking on your door or sending you nasty notes — bill collectors, bank supervisors, the IRS. Or when you apply for credit and get denied, even though you thought you had a spotless record.

It’s true that with identity theft you may not immediately be out big bucks, as long as you’re not required to pay the pile of overdue bills the thief amassed. But it will take you money and time to clear your credit report. Unfortunately, credit companies do not follow the example of the courts in presuming you’re innocent until proven guilty. Quite the opposite. It’s up to you to prove that the credit report is wrong.

You may have to hire a lawyer, chase down the relevant documents, and spend half your life on the phone.

One nightmarish case was described in a report by the Department of Justice. Here, a convicted felon stole someone’s identity. Then he "not only incurred more than US$100,000 of credit card debt, obtained a federal home loan, and bought homes, motorcycles, and handguns in the victim’s name, but called his victim to taunt him — saying that he could continue to pose as the victim for as long as he wanted because identity theft was not a federal crime at that time — before filing for bankruptcy, also in the victim’s name."

The victim and his wife ended up spending more than four years and US$15,000 out of pocket to clear their credit and name. The thief, meanwhile, served a light sentence unrelated to the theft, and paid no restitution. In 1998 this case was instrumental in convincing Congress to pass legislation discussed below.

The ripoff artist can set up a phone or wireless service under your name, open a bank account and write bad checks, take out a car loan. Another common scam is using your personal information to obtain a credit card account in your name.

It’s quite simple, really. The thief obtains useful information about you. Very dangerous information, in the wrong hands. Along with right kind of data (or wrong kind, depending on your point of view), he just needs a little daring, a bit of imagination, and a lot of unmitigated gall. Oh, and a complete lack of any semblance of conscience.

Where do the thieves get the information? Lots of ways.

1. Stealing your wallet or purse. Inside is a treasure trove of data for them, including your credit cards, ATM cards, Social Security cards, name, address, driver’s license number...whatever part of your life is in there, it’s now known to the thief.
2. Breaking into your home. Along with taking a few valuables, they might also take some of your bank statements and any other information they can find.
3. Dumpster diving. Identity thieves don’t need to break into your house or pick your pocket to find information. They can find information outside, once a week, by going through your trash. You walk out the next morning, find some of your papers strewn around and you figure it was just a raccoon enjoying himself on a night out. But in reality, it was another — more dangerous — form of masked marauder.
4. Stealing your mail. Your mail contains all sorts of vital information that to thieves is pure gold, such as bank and credit card statements. Even tax information. With these items, at least, you will eventually become suspicious when you never receive them. This might tip you off to the theft of your identity earlier than otherwise. But suppose the thief steals one of those ubiquitous pre-approved credit card offers. You never know when to expect one of those. The thief takes it, fills it out as you, and sends it in. And you may not find out he’s posing as you until the collector comes to your door.
5. Filling out a change of address form to divert mail from your address.
6. Discovering your personal information on the Internet.
7. Obtaining your credit report by posing as employer, landlord, or other creditor.

You get the idea. The variety of ways they can obtain information is as endless as the types of identity fraud.

It doesn’t help that legitimate companies are acquiring information from you all the time. Every day, in many different ways, you are asked to provide personal data. For example, a computer company may need it to process your order for a PC. Internet web sites ask for information so they can prepare a profile of you. This makes it easier for them to decide which promotions they should direct your way.

These purposes aren’t necessarily nefarious. But they contribute to the problem by potentially distributing your information too broadly. Fortunately, more and more companies are letting you choose not to divulge any or all of this information.

The brave new world of the Internet adds a whole set of privacy issues that weren’t there before.

One of the biggest threats to your privacy is the "cookie," a small text file on your hard drive used to identify you to the Web site next time you visit. All this is done invisibly; you don’t know when it’s happening. Some people call this a form of stalking.

Just recently, Microsoft added a feature to its browser that is intended to provide you with greater control over cookies.

Ah yes, the government. Until relatively recently officials didn’t even acknowledge there was a problem.

In fact, government itself can be one of the scarier privacy villains. No other entity has as much power to discover as many of our innermost secrets, or to abuse such information in so many pernicious ways.

And if you think our government’s just too enlightened for that, too 21^st century, consider the Carnivore controversy. You probably have heard about this developing horror story. The FBI has designed software to enable it to "wiretap" e-mail.

If the FBI gets its way, Internet service providers would be forced to put this software on their systems. This means the FBI theoretically can peer into your e-mail. And mine. And everybody else’s. What would keep the FBI from doing that? We’ll just have to rely on their judgment and wisdom.

You trust the FBI to always use its best discretion, don’t you? Well, don’t you?

Keep in mind, that in designing this software...knowing it would create controversy...knowing there would be tremendous concern about how this would empower an already all too inquisitive government...that with all these concerns, the FBI used its judgment and wisdom to name the program...Carnivore.

Guess they didn’t name it "Big Brother" because a television network beat them to it.

But although the government is a privacy threat in itself, it is also one line of defense against the privacy thieves. After all, even most libertarians would say that the government is supposed to help protect us from — or at least punish — criminal malefactors.

In today’s digital age, that includes identity thieves.

Unfortunately, until relatively recently the government believed that if you had your identity stolen you weren’t the victim of a crime. Why? Because, the way the government saw it, once the fraud is discovered you generally don’t have to pay the bills run up by the thief. What the government didn’t take into account was that your credit is ruined, it sometimes takes years to clear up all the mess, and your life is turned upside down.

The government enacted legislation in 1998 making identity theft a federal felony and giving consumers more control over their personal information. Under the Identity Theft and Assumption Deterrence Act, 18 USC 1028, it’s a federal crime to knowingly transfer or use, "without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law." [1028(a)(7)].

Violation of this law could result in a sentence of as much as 15 years in prison, as well as a fine.

What is "means of identification"? Well, this would be your Social Security number, name, phone number, credit card number, etc.

This law is enforced by the Secret Service, FBI, U.S. Postal Inspection Service, and the Office of the Inspector General of the Social Security Administration.

And the feds are considering additional legislation. There is a boatload of bills being considered in Congress, including the Identity Theft Prevention Action of 2000.

There are other laws that can protect you — theoretically. If someone has stolen your mail, that’s a federal crime. Report it to your postal inspection service immediately. Trading in stocks under your name is also a crime. Report it to the Securities and Exchange Commission.

But there could be more than a thousand privacy protection laws across the land (and there probably are) and a million bureaucrats to enforce them (seems there are at least that many), and yet you still can’t count on the government to protect you.

2: Whenever you have a choice whether to provide personal information or not, choose "not." And always inquire whether you have a choice. For example, when someone requests your Social Security number, ask whether there’s other, less sensitive information you could provide to accomplish the same purpose. Your driver’s license number, for instance.

3: If you do give out personal information, ask what steps you can take to ensure it remains confidential. For example, are there forms you can fill out, supervisors to speak to? What you want to do is create a paper trail that legally binds the recipient to use your information only for legitimate purposes.

4: Clean out your wallet, purse or briefcase. Carry with you only what you need at the moment. Everything else, in particular any valuable personal information, should be under lock and key at home or in a safe deposit box. While you’re at, clean out your car as well. If someone breaks into it, better they steal your radio — or even the auto itself — than your identity. And never carry around your Social Security card, birth certificate or passport unless you know you’re going to need them. Minimize the number of credit cards you carry at any one time. Try limiting it to no more than two. You should be particularly leery of showing people your Social Security card. If you don’t have the number memorized by now, you’re pretty hopeless. No one, but no one ever asks to see your card, unless they have something pernicious up their sleeves.

5: Keep track of when your bills usually arrive, for example the day of the month. If a bill doesn’t arrive on schedule, it might simply have gotten lost or delayed in the mail — or an identity thief may have made off with it for his own criminal purposes. Call the billing company as soon as you become aware that a bill is seriously overdue.

6: Require anyone pretending to be someone in authority and asking for personal information to prove they’re legitimate. Better yet, call the agency or company they’re supposed to be with and confirm. As the Federal Trade Commission notes, "Legitimate organizations with whom you do business have the information they need and will not ask you for it."

7: Protect your mail. Drop outgoing mail in a post office collection box or at the post office itself. If you leave it in your own mailbox for the postman to collect, a thief may take it instead. And don’t let incoming mail sit in your mailbox too long. If you’re going to be away for any length of time, have the post office hold it. Some people recommend using a P.O. box for all bills and other correspondence that may contain personal information. You may want to consider putting a lock on your mailbox, so that people can insert mail into it, but need a key to get it out.

8: Devise a more secure password system. As we go through our daily routine, it’s truly amazing how often we encounter the need to use passwords. Getting money from the ATM; calling for the bank balance; logging on to the computer network. And admit it, you probably use a password that’s easy to remember, such as your birthday, the last four numbers of your Social Security number, your address. Well, if you take this tack, the password does you no good whatsoever. Any clever and resourceful identity thief will be able to figure it out. Instead, come up with a different password for everything. And make sure the passwords are unrelated to personal information or to any information others would know about. If you’re afraid of forgetting them, record your passwords and store them under lock and key (safe deposit box or that loose floorboard in the basement).

9: Use a shredder. You don’t have to be Oliver North, a disreputable lawyer, or a besieged embassy employee to have need of a shredder. Identity thieves like to comb through your trash and paper recycling containers. Let ’em deal with the odoriferous onion skins, funky cheese, and soiled diapers all they want, as long as the documents that contain your personal information are sliced into a zillion tiny pieces. So purchase a shredder and use it for credit card receipts, old bank statements, investment records, phone bills, pre-screened credit card offers...and just about anything else that can expose a piece of your life to a scamster . If you want to make it even harder for the bad guy to get your data, you can mix the shreds with the cat litter, just to add a little pungency.

10: Never leave credit card or ATM receipts lying around in public for others to pick up. Now, this seems to be pretty much of a no-brainer, along the lines of don’t leave your keys in your unlocked car. But we include this bit of wisdom mainly because we find people’s receipts lying around all the time. Think about it. How many times have you gone to your ATM and found someone else’s receipt laying there — with their bank account number and balance in full view? An identity thief would have a field day with that. Fortunately for the person that left it there, you’re a Good Samaritan and throw it away...after you’ve ripped it up into several pieces.

11: Speaking of pre-screened credit card offers...there’s more you can do than just shred them. You can actually get the major credit card companies to stop sending them to you. Simply call 1-888-567-8688. The three biggest credit bureaus use this number (toll free) to let you choose not to receive these offers.

12: Beware of employees, contractors, repairmen, roommates...and anyone who isn’t you. You are the only one that is entitled and has the need for your personal information. Since you don’t know who you can completely trust, there is no reason to needlessly expose to others your private data.

13: Review your credit report with the three major credit bureaus once a year. Confirm the accuracy, and if there a problems deal with them immediately. Even if a scamster isn’t messing with your life, you may still find mistakes that need to be corrected for you to clean up your credit record. They can charge you up to US$8.50 for each report. The bureaus are: ChoicePoint (formerly Equifax), www.equifax.com, 800-685-1111, Experian, www.experian.com, 888-397-3742, and Trans Union, www.tuc.com, 800-916-8800.

14: Take all steps possible to prevent your Social Security number from being used as an account number. Many organizations, particularly health insurance companies, just stick your Social Security number into their system to help identify you in their computers. Unfortunately, this exposes that most dangerous of numbers to a limitless set of eyes. Ask if you can have a different account number. Talk to supervisors. You may not succeed, but it’s worth a shot. The FTC recommends you ask these questions when someone requests your Social Security number:

1. Why do you need my SSN?
2. How will my SSN be used?
3. What law requires me to give you my SSN?
4. What will happen if I don’t give you my SSN?

Fraud regarding your Social Security Number can be reported to the Social Security Administration at their Fraud hotline: 1-800-269-0271.

15: Ask your state Department of Motor Vehicles if they distribute your personal information at all. If so, ask if you have the right to tell them not to. If so, exercise that right.

16: When you use your ATM, hide from others’ view the numbers you punch in when you’re entering your PIN number. Do the same when you’re punching in calling card information on a public phone.

17: When you order new checks from your bank, arrange to pick them up at your local branch, rather than have them mailed. That way, no identity thief can intercept these items, which would be awfully dangerous in the wrong hands.

18: If you make a purchase on the Internet, make sure your browser is secure, encrypting or scrambling your purchase information. Or you can avoid ordering over the Internet, and instead make your purchase by phone or mail.

19: If you do become a victim of identity fraud, act immediately. Call the FTC’s Identity Theft hotline (toll-free) at 1-877-IDTHEFT (438-4338), or the FTC’s website at www.consumer.gov/idtheft. You can also contact the agency by mail at Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The Federal Trade Commission takes information from victims and stores it into a consumer fraud database. They also share this information with other law enforcement agencies and private entities.

The FTC also recommends these additional steps: Call the three major credit bureaus and request that a fraud alert be placed on your file. And place a victim’s statement in your report asking that creditors call you before opening new accounts or changing your existing ones. Call creditors immediately and speak to someone in the security or fraud department. Follow up the conversation with a letter. Close the accounts that have been tampered with. If you act quickly regarding your credit card account, you can limit your liability for unauthorized credit card charges to US$50 for each card. And report the fraud to the police, both locally and where the fraud occurred.

The FTC has put together a useful booklet on identity theft, called, "ID Theft: When Bad Things Happen To Your Good Name," which can be obtained by going to the FTC website at www.ftc.gov.

If you want to improve your Quality of Life, read on...