Basically, there are two forms of “identity theft”. The first,and most common is someone co-opts your credit card information.This can be done in a number of ways, and while there is sometrepidation about giving out this information online, if it is ona “secure” site, there is little chance of it happening there.More commonly, it is a lost or stolen credit card, or carelesshandling by an employee of a company where you used the creditcard to make a purchase. Always be sure you get the carbon paperif they use a machine to imprint the information from your card.

If you do get an incorrect charge from a vendor that you didbusiness with, this is not identity theft. This is usually amistake, and usually, can be easily corrected directly with thevendor. If the vendor does not cooperate, file a “disputedcharge” form with the credit card company

The second, and more insidious form of identity theft, is whensomeone assumes your identity, and opens up credit card accounts,or cell phone accounts in your name. They can also use yoursocial security number when applying for a job (a favorite trickof illegal aliens), or your drivers license to get a duplicatecopy.

Communications tools available on the Internet are allowingcriminals to engage in new schemes and strategies, and identitytheft can be carried out easily over the Internet.

All scam artists need do, is pay a fee to an information brokerto get an individual’s Social Security number. Online databasesalso contain address information, while an individual’s mother’smaiden name can be found in obituaries or other public documents.Typically, they also have the bills sent to a different addressso you won’t even get the bills and be alerted.

Recently, two Memphis men used the Internet to engineer anidentity-theft scam that allowed them to use the credit cards ofhalf a dozen top business executives. They ordered more than$700,000 worth of expensive watches and jewelry. The people whohad their identity stolen, didn’t find out about it until afterthey had credit problems.

If you open a credit account, ask that a password be used beforeany inquiries or changes can be made on the account. Avoid usingeasily available information like your mother’s maiden name, yourbirth date, the last four digits of your SSN or your phonenumber - the same holds true for pin numbers.

While there is not a whole lot you can do to prevent this, thereare things you can do, to protect your credit if it does happen.

Contact the fraud departments of each of the three major creditbureaus. (Equifax - www.equifax.com - Experian - www.experian.comand Trans Union - www.tuc.com) All of them offer advice on whatto do if there has been fraud committed. Tell them to flag yourfile with a fraud alert, including a statement that creditorsshould get your permission before opening any new accounts inyour name.

If you discover that an identity thief has changed the billingaddress on an existing credit card account, immediately close theaccount, and request the credit bureaus for copies of your creditreports. Credit bureaus must give you a free copy of your reportif it is inaccurate because of fraud.

Regardless of how the thieves got, or used the information,report it to the police department. That way, if there is aquestion down the line, there will be an official reportavailable.

Identity theft is a serious problem. If you feel that this hashappened, immediately take the steps outlined above. When someoneappropriates your personal information without your knowledge,it’s a crime, pure and simple.

While it may cause you problems when trying to straighten out themess, hopefully it will cause the perpetrators even biggerproblems. Those two Memphis men face millions of dollars in fines and several decades worth of prison time.

Bob publishes the free weekly “Your Business” NewsletterVisit his Web Site at - http://adv-marketing.com - tosubscribe.