Identity Theft is on the rise and it’s no secret, judging from the emerging success of Identity Theft protection firms such as LifeLock and LoudSiren. Is the prosperity of these firms truly a sign of rising identity theft, or is it a knee-jerk reaction to a widespread, but unfounded, panic?

According to the FTC, the danger is real. An estimated 9 million Americans have their identities stolen each year, and that number is expected to rise with the passage of time. In this article we’ll take a look at how this number came to be by analyzing some of the most popular methods of identity theft taking place today.

Pretexting – One of the trickier methods, Pretexting is, simply put, fabricating false pretenses under which to obtain your sensitive financial information from banks or other financial institutions. An example of pretexting would be to falsely assume the identity a relative or other close contact in order to gain access to your information from a phone company or credit union.

Direct Theft – This is perhaps the simplest method for stealing information:  taking it directly from you. Either by stealing your mail, swiping your purse, or pickpocketing your wallet, direct theft is often the easiest way to gain access to your credit card information, bank statements, and the like.

Skimming – When one has a sophisticated storage device connected to a card reader and then later accesses that information for malicious use, it is called “skimming”. The danger with skimming is that such devices could literally be installed on any legitimate card reader without you being able to recognize that the card reader is compromised. Thus, you are literally giving someone else your credit card information without even knowing it.

Redirecting Your Mail – By filling out a change-of-address form commonly available from many companies which utilize mail as a primary means of correspondence, thieves can divert your mail to a separate address, where they then gain access to your account statements and other information at their own leisure. Once your mail is redirected, it is as though it has been stolen directly from your mailbox.

Sifting through the Garbage – Much the same as redirecting or stealing one’s mail is the act of stealing it after it has been read, discarded, and forgotten about. Any information that you throw away in the garbage is a possible target for identity thieves looking to ruin your good name as they access the specifics of your bank account or credit card statements.

Phishing – Another sophisticated method, phishing is the devilish art of deceiving consumers into revealing their account information by pretending to be a financial institution or other legitimate business. The difference between phishing and pretexting lies in the target: pretexting targets companies that have your information, whereas phishing targets you directly.

Now that we’ve identified six of the most common forms of identity theft, we’re geared up to explore the methods that you, the everyday consumer, can use in order to prevent yourself from becoming the next victim of this nefarious crime.

Come back tomorrow for part 2!

Related posts:

1. Identity Theft Part II: Detection
2. Identity Theft III: The Aftermath
3. 6 Simple Ways to Prevent Identity Theft
4. Credit Card Theft: How to Avoid the Next Albert Gonzalez
5. Who’s Stealing Your Credit Card? Five Quick Portraits of Identity Thieves