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Consumer Alert: A New Hi-Tech Way to Steal Your Identity

Identity theft is evolving with technology, leaving you even more vulnerable in ways you might never think of.

One new form of identity theft involves webcams – harmless ways to communicate with family and friends, right? Our security expert Jim Stickley conducted an unscientific experiment that exploited the technology.

He sent out five webcams to a group of friends and family, along with a letter claiming they had been randomly selected by a fictitious company for an internet usage survey. But when the recipient loads the software, they’re actually running a program designed by Stickley to give him control of the camera and the computer itself. The CD still looks real, but the software is malicious. Stickley can turn on the camera, run commands, record keystrokes, download cookies from the hard drive and piece together usernames, passwords and even social security numbers Making matters worse, the recipients never expect a thing as they assume they’re in the privacy of their own homes.

Some antivirus programs will catch this sort of activity, Stickley says, but not most. Personal firewalls can also help, but most people disable these as they are a nuisance.

The best thing you can do if you fear you’ve been a victim is to copy all your important files and wipe the computer clean.

It also takes a little common sense, says Donny Deutsch of our Money Desk. Anytime something seems too good to be true, it probably is. The clue here would have been the unsolicited “free” offer.

Of course, a significant percentage of identity theft is committed by friends and family members, so you don’t always have the luxury of being skeptical. Credit expert John Ulzheimer, also on the Money Desk, recommends freezing your credit report the minute you believe you’ve become a victim. Don’t just install credit report monitoring, which is completely reactionary. Only a freeze will actively protect your credit if you’ve been taken advantage of. And while it’s a hassle to cancel credit cards, that’s nothing compared to the intrinsic damage done to your credit when your identity has been hijacked.