Although a lot of folks fear their identity will be stolen electronically, the thief is more likely to be the devil you know, who picks through your purse or pilfers your personal data right off your own desk.
Within the past 12 months, 9.3 million American adults became victims of identity fraud, according to a new report by the Better Business Bureau and Javelin Strategy & Research.
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In 2004, for the fifth year in a row, identity theft topped the list of complaints reported to the Federal Trade Commission, accounting for 39 percent of the 635,173 consumer fraud complaints filed with the agency.
Identity thieves will open new accounts in other people's names and rack up debts on existing accounts. To do that, they may use people's Social Security numbers, bank account information, addresses or phone numbers. Some people have been denied jobs or insurance or have been arrested for crimes they did not commit -- all because their identity was stolen.
But according to the 2005 Identity Fraud Survey Report -- released by the Better Business Bureau and Javelin as an update of the FTC's 2003 Identity Theft Survey -- relatives, friends and neighbors make up half of all known identity thieves.
This, of course, comes as good news to businesses that have been pushing online banking and other electronic transactions to consumers. CheckFree, Visa and Wells Fargo supported the research by the BBB and Javelin.
Still, I found it fascinating that when it can be determined how identity theft was committed, the victim usually knew the fraudster. Computer crimes accounted for just 11.6 percent of all known-cause identity fraud in 2004.
And here's another interesting fact from the report: When family members and friends open up credit accounts in your name and commit other crimes, the total cost of the fraud is greater and requires more time to resolve than frauds committed by other criminals, the report found.
For example, the median loss from information stolen from e-mails sent by criminals posing as legitimate businesses (called phishing) is $2,320. But the median loss as a result of fraud by family and friends is $15,607.
So what should you do if someone you know steals your identity? Obviously, report them to the police, right?
"Frequently when we break up a ring and get a list of victims and find family members were involved in the crime, [the victimized] relatives are very reluctant to cooperate," said Ken Hunter, president and chief executive of the Council of Better Business Bureaus. "People are very reluctant to turn in that grandson."
Hunter was very practical on whether you should rat out your relative or friend. For example, if a nephew stole your identity to open up a credit account to buy music CDs, Hunter said it may not be worth the aggravation to turn him in.
"If it's a matter of pilferage at a very low level, nothing much [criminally] is really going to happen to that person," Hunter said.
However, if a neighbor, friend or family member steals your identity and commits a major theft, you should contact the authorities, he said.
And don't feel guilty about it, either.
Hunter said people's failure to realize that they are more at risk of identity theft from someone they know makes them even more likely to be victimized.
Think about it. How many people -- a day-care provider, housekeeper, contractor, repair person, family member or friend -- have access to your private financial documents (checkbook, bank statements, credit card account statements or tax records)?
Where do you keep your files, checkbook or bank statements? Is your personal financial information kept in a locked drawer or a file cabinet? (Mine isn't.) Do you just throw away bills, credit card solicitations and such without shredding them?
The Better Business Bureau and Javelin have developed an Identity Safety Quiz. Take the quiz at www.idsafety.net. It made me realize how vulnerable I was.
Once you take the quiz, you'll get tips on how to protect yourself. For example, consider signing up for electronic bill paying or have your account statements sent electronically. That way you can monitor your various financial accounts frequently and possibly catch any fraudulent activity early.
"Our study concludes that those who access accounts online can provide earlier detection of crime than those who rely only upon mailed monthly paper statements," said James Van Dyke, Javelin's founder and principal analyst.
If you do become a victim of identity theft, act quickly. If you're not sure what to do, get help.
Call For Action, a nonprofit consumer hotline based in Bethesda, and Visa USA have teamed up to offer confidential counseling to victims of identity theft. Call 866-ID-HOTLINE and a counselor will tell you what to do if your identity has been stolen.
While online identity fraud is definitely a threat, it's the offline methods we should be just as vigilant about.
Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" and online at www.npr.org. Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or send e-mail to firstname.lastname@example.org. Comments and questions are welcome, but because of the volume of mail, personal responses may not be possible. Please also note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.