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What to worry about
Credit card fraud shouldn't be your biggest worry: identity theft should.
June 7, 2005: 5:19 PM EDT
By Michael Sivy Pat Regnier and Carolyn Bigda, MONEY Magazine
What is identity theft?
America's No. 1 consumer complaint takes many forms. While people worry most about shopping online, the real threats either are more mundane or are large-scale crimes. Here's a look at four all-too-common types.
Computer crime
Data theft by spyware, viruses, e-mail and hackers, and during online transactions, accounts for only 12 percent.
Personal betrayal
Friends, relatives, employees and others who've managed to get access to your data account for more than 20 percent
Document loss
Stolen wallets, checkbooks or credit cards, stolen mail and paper records retrieved from your trash account for 39 percent.
Business leaks
Consumer files lost or breached in the past six months at ChoicePoint, LexisNexis and elsewhere now top 2.4 mil.

NEW YORK (MONEY Magazine) - Consider these odds: About 2.6 percent of Americans have their homes burglarized in a year. But about 4.25 percent of adults (or 9.3 million Americans) are hit by ID theft, the Better Business Bureau and Javelin Strategy & Research estimate.

This doesn't mean you ought to fear buying a patio chair online or opening your wallet in public. In fact, many identity crimes don't have lasting effects: More than half are simple credit-card fraud -- somebody gets your account number and goes on a shopping spree.

In most cases you can solve this with a couple of hours on the phone, since the card issuer typically is required by federal law to eat nearly all of the loss. (Indeed, Visa and other big card companies give customers 100 percent protection.)

More important than credit card fraud?

The bigger worry is when someone gets enough information to borrow money or open other accounts in your name. When the con artist doesn't pay the bills, your credit is ruined. And you may not learn of the scam until a bill collector calls or you get turned down for a car loan, a mortgage or even a job.

Such cases now account for a quarter of identity thefts. And according to one Federal Trade Commission survey, victims spent an average of $1,200 and 60 hours clearing their name.

Like burglary, ID theft is a crime whose true cost is measured not just in dollars but also in fear and anxiety. Most of the 310,000 victims of the LexisNexis breach may never have their identities stolen, but all should spend time checking for surprises on their credit reports.

"Having your identity stolen is somewhat like contracting a chronic, protracted disease," observes privacy expert Daniel Solove, a law professor at George Washington University. Once you've been hit, you can't ever be 100 percent sure you are in the clear.

ID Theft: Geeks and mobsters

Click here for tips on damage control.

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