Identity theft is the most popular form of consumer fraud, in part because it is the most profitable. According to the Federal Trade Commission, identity thieves stole nearly $100 million from financial institutions last year, or an average of $6,767 per victim. During the past four years, identity theft has grown exponentially. The increase of identity theft today is due to better access to information via technology as well as the ease with which people can obtain credit. Credit unions can help prevent identity theft by protecting sensitive information such as Social Security numbers and personal records. The main step in combating identity theft is to accurately verify the identity of members when they open new accounts or apply for automobile loans or mortgages. There is no better way to deter identity theft than to do all you can to "know your borrower." It is important to understand the difference between harvested or usage-based data and authenticated or virgin data to truly identify an individual. Harvested data is information provided by an individual when he or she seeks to form a banking, financial or credit relationship. It is often referred to as "self-confessed data." Since this data comes primarily from the individual, its reliability depends on the individual's honesty and integrity. Most data appearing on credit reports, driver's licenses, mortgage records and bank account applications are the result of information supplied by the individual and may or may not be correct. Virgin or authenticated data, the second type of data, is information about an individual obtained from public or quasi-public sources, such as the Social Security Administration (SSA), a state Department of Vital Statistics or the Department of Motor Vehicles. Authenticated data includes birth certificates, Social Security card information supplied by the SSA and early school records. Because the source of authenticated data is not the individual, it is considered to be more reliable than harvested data. In the past, the financial industry has relied on harvested data for identity verification because it was the only data available. Today, this data is not considered as accurate as authenticated data because it only monitors the usage of a SSN and does not indicate if the SSN belongs to the individual using the number. An effective identity verification product should gather authenticated data by going straight to the source, the SSA, and verifying that the data provided by an individual, including name, date of birth and SSN, either matches or does not match the SSA data. The verification product should provide three additional identity checks: the death master, the OFAC (Office of Foreign Assets and Control) and the credit header or harvested data. The death master check verifies that the SSN provided by an individual either appears or does not appear on the SSA death master list, a list containing names and basic information about persons with SSNs whose death have been reported to the SSA. The OFAC check verifies that the data provided by an individual matches or does not match the name on the list of known terrorists, money launderers or drug traffickers as provided by the U.S. Treasury Department's Office of Foreign Asset Control. This check should also meet all the compliance requirements in the USA Patriot Act. Credit header information provides additional names associated with the SSN, as well as the date range and the state in which the SSN was issued, previous addresses, age and birth date of the individual. Identity theft is on the rise, so credit unions need to equip themselves with current and efficient products to fight it. Obtaining credit report information is a first step to verifying an individual's identity; however, it does not supply enough data to be 100% certain who someone truly is. Using authenticated data enables credit unions to truly identify an individual. Identity thieves almost always follow the path of least resistance, and they are very knowledgeable of the successful methods to defraud lenders. For credit unions to be most effective in deterring fraud, it is critical to use the latest tools to verify the identity of a member.