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Tricks That Identity Thieves Use

It took Jessica Ashford more than six months to realize someone else was making money pretending to be her.

“I called the IRS one afternoon to check the status of my tax refund and they essentially told me that they mailed my refund to someone in California,” says Ashford. “Considering I live in New York, that raised a red flag.”

In all, 2012 was a banner year for tax refund ID theft. A study found that the IRS reported more than 640,000 cases that year, a 62% jump from 2011.

“All a thief need is your Social Security number — which they can get through paper records, your trash or hacking into a database,” says McAfee ID theft expert Robert Siciliano. “From there, they just file your taxes as early as possible — generally at the beginning of February.”

Ashford says the crazy thing is that she actually owed the IRS money, but because the government believed the information provided by the fraudster in California, they sent a refund. It's strange but true and just one sneaky example of how fraudsters are hijacking your identity these days. Another surprising victim: kids.

Did you know that ID thieves target children 35 times more frequently than adults? According to a 2012 survey by AllClear ID, one in 10 children is a victim of identity theft with the most likely target those under the age of five.

“Parents don’t have a reason to check a child’s Social Security number, or credit report for that matter, up until they turn 18,” Siciliano says. And because children can’t enter into the type of agreements that impact one's credit, most parents never find out about the identity theft until it’s too late.

Again, all the thief needs is your child’s Social Security number, and one common way to obtain it is by creating a virus that lifts tax, healthcare and school documents from a parent’s computer. Siciliano says once the bad guy has opened up new accounts under your name or your child’s name, they can get mobile phones, open utility accounts, apply for credit cards, open bank accounts, refinance your home — basically anything you can do with your name, except they don’t pay the bill and leave you with ruined credit. Make sure to get antivirus software updates on your computer regularly. Protect your family’s Social Security numbers and shred any documents containing sensitive personal information.

Finally, check to see if your debit or credit card has an RFID (radio-frequency identification) chip. You can usually find the logo on the card’s back in the top right. This is yet another way thieves are snatching your financial information. While this relativity new technology can help you pay faster, it’s also making things easier for identity thieves, as it allows them to access your bank information wirelessly. Even while resting safely in your wallet or purse, a thief can extract your card information with a few simple and inexpensive gadgets. Since RFID chips were introduced in 2005, the justice department says credit and debit card theft has been on the rise.

“You’re on the subway in the morning, going to work or school, and someone walks up to you and will wave a device near your pocketbook or wallet,” Siciliano says. “That device can read the information off your credit or debit card via the radio-frequency identification chip.” You can always buy an RFID-blocking wallet for added protection or just call your bank and ask if they could reissue you a card without the technology.

Back in New York, the IRS has informed Ashford it’s recognized the error and it could take several months to investigate the fraud. In the meantime, she’s ordered all new bank cards and has been monitoring her credit. “The unfortunate thing is that I will never know who stole my identity,” says Ashford. “I can just be very careful and proactive to make sure this doesn’t happen again.”

As always, we want to hear from you. What are some strange but true ID theft crimes? Connect with me on Twitter @Farnoosh, using the #finfit hashtag.