Nov 14, 2013 Dave King
Identity theft is a crime that occurs nearly every day, and has wide-ranging consequences. For one, victims can see a significant amount of damage to their consumer credit scores.
To help prevent this crime, financial institutions such as short term lenders need to do their part. In addition to informing clients of potential risks, ID verification procedures need to be strong so lenders can verify borrowers aren't using a stolen identity.
Recent high profile cases may also help bring attention to identity theft. New York Knicks star Carmelo Anthony and rapper 50 Cent - also known a Curtis Jackson - were both victimized in a high-profile case, according to NBC Connecticut. Two Hartford residents allegedly stole the identities of Anthony and Jackson, among others, and purchases diamonds, scooters and cars.
A member of the Denver Broncos cheerleading squad was also recently targeted in an identity theft ring, according to CBS Denver. The thieves allegedly stole checks and other documents from mailboxes to purchase methamphetamine and other items. The cheerleader was victimized after a check was stolen and used to make phony checks.
"It just so happened that among all the pieces of mail over the course of time that they are alleged to have stolen, one of those pieces of mail contained a check from the Denver Broncos Cheerleaders," Lynn Kimbrough with the district attorney's office said.
Identity theft can negatively impact a person's credit score
One of the biggest reasons that identity theft needs to be prevented is the fact that it can have serious implications for credit scores. According to Protect My ID, thieves can use a person's credit cards to purchase a wide array of products, and then not make any payments. When a bill isn't paid, credit scores fall as a result.
Credit cards aren't a person's only worry though, as criminals can also gain access to bank accounts. If these are emptied, consumers may be left without a means to pay their rent, mortgages or car payments. When these payments are missed, negative information is reported to credit bureaus, which leads to a drop in that person's score.
Once discovered, people are generally able to recover all of the points lost to their score, but this can take a while, which is why identity theft prevention is so important.