October 24, 2005 4:00 AM PDT

Separating myth from reality in ID theft

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nation's fastest-growing crime," he said. "The bad news is that it is not going away. Instead, it is holding steady."

The wide reports of ID theft have made people more vigilant, which all sides agree is a good thing. For one thing, "we need to do a better job of not keeping our paper available," said Charles, who recommends canceling paper statements from a bank, credit card issuer or a utility company.

Keeping watch
Hayes monitors her credit card and bank account daily via the Internet and requests a credit report twice a year. Though she has not fallen victim to fraud from the U.C. Berkeley incident, she has had other experiences with identity theft.

"The online environment is really pretty safe. Most identity fraud tends to occur in the paper environment."
--Cheryl Charles, senior director, BITS

Five years ago, someone bought a cell phone in her name, unbeknownst to her, until a collection agency came looking for money. It took some effort, but the mess was cleaned up, and her credit score restored.

"I think we need a whole better system," said Hayes. "Identifying people by their Social Security number simply isn't working."

Like many other careful consumers, Hayes now shreds all documents that contain sensitive information before she discards them. About 10 million shredders are sold every year worldwide, according to shredder manufacturer Fellowes of Itasca, Ill.

"We have seen significant sales growth," said John Fellowes, director for shredders at the company that bears his name. "The industry is up about 10 to 15 percent over the previous year."

What do you think?
Share your views on ID theft and discuss the topic with experts.

But experts point out that, while shredding is smart, only 2.5 percent of ID theft cases last year was linked to dumpster diving. By contrast, 8 percent was traced back to the mailbox, a much cleaner way to find identifying information. Almost one-third of all fraud occurred because of a lost or stolen wallet.

As a result, though some fear of ID theft is justified, experts in the field stress that it should not dominate anyone's life.

"There are certain things that are just silly to do in today's world, like throwing out your tax documents and credit card statements in a plastic bag on your curb without first shredding them," said Monique Einhorn, an attorney at the FTC. Nevertheless, she added: "People have to balance their own paranoia and security issues against convenience."

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