The latest box-office hit is "Identity Thief," earning more than $36 million in its opening weekend to become the No. 1 movie in the country. But when identity theft occurs in real life, it costs American families billions of dollars and is the No. 1 consumer complaint in the U.S.
 
"This movie offers a humorous portrayal of an identity theft victim who takes matters into his own hands and hunts down the con artist who has stolen his identity. Moviegoers will find this scenario hilarious, but the crime of identity theft itself is no laughing matter," says Patricia Seaman, senior director with the Denver-based National Endowment for Financial Education® (NEFE®). "But this is a teachable moment to understand the consequences of identity theft. Becoming a victim of fraud by having your identity misused can wipe out years of savings and assets and threaten your future security."

During the two hours it takes to sit through the movie, more than 2,000 Americans will be victimized by criminals who steal bits and pieces of their personal data for financial gain estimates Identity Theft 911, an identity-fraud management firm based in Scottsdale, Ariz. And the Federal Trade Commission (FTC) reports that identity theft has been the top consumer complaint for the past 12 years in a row. In 2001, the FTC logged 86,250 complaints from those victimized by identity theft. By 2011, the number of complainants had risen to 279,156-a 224 percent increase in 10 years.

How ID Theft Happens

The crime of identity theft occurs when someone steals personal information and uses it without permission. It can devastate household finances, credit history and reputation-as well as take time, money and patience to resolve. Identity thieves may gain access to your private information by:
* Claiming to be a representative of your financial institution.
* Sifting through your trash for discarded papers.
* Stealing newly issued items such as credit cards, checks, utility bills, insurance statements and benefits documents from your unsecured mailbox.
* Looking over your shoulder at the ATM to capture your personal identification number (PIN).

Thieves also may use more sophisticated tactics such as:
* Phishing: Identity thieves send emails pretending to be financial institutions or other legitimate businesses, requesting your personal information to avoid an account closure or suspension.
* Skimming: Thieves use a special storage device that steals credit or debit card numbers, which they then use to process transactions with your account.
* Malware use: Scammers use malware-malicious software that affects computers-to obtain your personal information via the Internet.

With access to your name, address, Social Security number, bank or credit card statements, or other personal information, identity thieves can open fraudulent bank, credit card, cellphone or other service accounts in your name; change your account information, such as your billing address and logins and passwords; or even secure loans in your name.

Protect Yourself from ID Theft

"Unfortunately, there is no definitive way to ensure you will not become a victim of identity theft. Yet there are steps you can take to minimize the chances that your information will be stolen and used by a thief," says Seaman.

Pay close attention to your credit report and regularly check for inaccuracies. You are entitled to a free credit report every year from each of the major credit report agencies-Equifax, Experian and TransUnion. You can order a detailed summary from each agency at www.annualcreditreport.com. You also should regularly check your children's credit reports, as identity theft among children is on the rise. You can initiate a fraud alert on your credit report, making it harder for an identity thief to open accounts in your name. When you have an alert on your report, a business must verify your identity before it issues credit.

 Never give out your Social Security number, bank account information or other private data to unknown organizations or people. Most people who fall victim to identity theft mistakenly give out their personal information to fraudsters who appear to be representing a legitimate business. Remember, even a financial institution that you work with will not contact you asking for this information.

Additional measures of protection include:

• Using a different PIN or password for each personal account, and changing them frequently.
• Being aware of phishing tactics, where an email looks like it is from a real financial institution or store but is meant to trick you into supplying personal data. Instead of clicking links in the email, contact the business by phone or in person.
• Installing firewalls and anti-spyware on your computer to prevent viruses or downloads designed to steal your personal information.
• Leaving your Social Security card, bank account numbers, passwords and PINs at home instead of storing them in your wallet.
• Shredding papers that have account numbers or other personal details on them.
• Stopping junk mail and credit card offers from being delivered to your home by calling 888-5OPT-OUT, or online at www.optoutprescreen.com.

"People who see the 'Identity Thief' movie should enjoy the cinematic experience, but remember that this is not a realistic depiction of what happens when this crime occurs," says Seaman. "Everyone should take the time to understand how identity theft happens and take the steps necessary to protect themselves. This is an essential part of personal finance."

Learn more about how to protect your personal information and prevent identity theft by visiting www.smartaboutmoney.org/Hot-Topics/Identity-Theft.

About the National Endowment for Financial Education:
NEFE is an independent nonprofit organization committed to educating Americans about personal finance and empowering them to make positive and sound decisions to reach financial goals. For more information, visit www.nefe.org.

This month the CFCO's Mindful Money column discusses "Identity Protection While Traveling."