IDENTITY THEFT

According to a recent Federal Trade Commission Survey, credit-related scams are among the most common types of financial fraud in America - accounting for three of the top four categories of fraud.  The FTC estimates that nearly 25 million Americans, or 11.2% of adults, were victims of fraud from May 2002 to May 2003.

Debt seems to be a big factor.  Only 2.7% of consumers without debt were victimized, vs. 19.2% of those with a large amount of debt.  Here's a look at the top credit-related scams:

Advance-fee loan and credit card scams.  Considered the most frequently reported type of consumer fraud, consumers are promised a "guaranteed" loan or credit card, regardless of their credit history. The catch: They had to pay a hefty fee to get the card or loan.  Over 4.5 million consumers paid money for loans or credit cards they never received. Some paid more than once.

Credit card insurance.  Some companies offer "loss protection" to protect you from the unauthorized use of your credit cards.  However, you probably don’t need it since federal law limits your liability to $50 if your card is misused.

Credit repair scams. Maintaining a high credit rating is valuable for getting a good loan rate. Some companies offer ways to raise your score for a fee.  They may suggest filing multiple disputes or some other gimmick.  However, if the negative information on your credit report is accurate, it will eventually be restored.

Identity Theft.  The most threatening concern consumers face is where someone, through a complex fraudulent scheme, actually obtains credit using your identity.  The crook actually takes over your identity, by changing your address, and eventually racking up bills.  It is this fraudulent scam that can cause financial, legal and credit problems, not to mention the hundreds of hours to clear up this mess and restore your identity.

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