There's No Substitute for Checking Your Bank Accounts

Fraud alerts can only do so much to protect you.

A recent identity theft victim discovered that fraud alerts -- while very helpful in guarding against thieves who try to obtain credit in the victim's name -- don't protect the victim 100% against financial losses.

Meet Patrick Grant. Patrick is a professor at the University of Virginia. According to a story in The Richmond-Times Dispatch, Patrick knew something was amiss when he found three letters in his mailbox that stated they would not raise his credit limit -- because he had never requested it. According to the report:

"Identity thieves in New York had opened a checking and savings account in Grant's name, aided by his Social Security number and a fake New York driver's license with his name on it. Using an online banking feature of the fraudulent checking account, the thieves hijacked Grant's existing Bank of America credit-card account... They drained Grant's credit-card account by authorizing cash-advance payments, which they then withdrew from an ATM. Over the course of nine or 10 days, the thieves obtained $22,000 with Grant's credit card."

While Patrick is not positive how his identity was stolen -- his information had been compromised several times in university-related data breaches -- the first thing he did was purchase credit monitoring and place fraud alerts on his credit file. But the thieves didn't try to use his identity to open new lines of credit. Instead, they just tapped into his existing credit accounts.

In November 2007, the Federal Trade Commission reported that 3.7 percent of all American adults -- or 8.3 million people -- had their identity stolen in 2005. These thefts totaled an estimated $15.6 billion in losses. And the numbers are increasing.

It's a good reason to keep a close eye on what's going on with your bank accounts.