Paul Lima had a vague feeling he wasn't getting any mail. When his mother phoned wondering why he hadn't cashed his birthday cheque, "the penny dropped," the Toronto freelance writer says.

He called Canada Post, which said he had changed his address in person on Nov. 17.

"Not me," he said.

"Fraud," said the post office, and after clarifying his identity, advised him to call the police. He did.

Mr. Lima was one of 11,231 Canadians victimized by identity theft last year. "I was in a little bit of shock," he says.

According to Glen Degenkolb, director and independent associate of PPL Legal Care of Canada Corporation, identify theft is Canada's No. 1 white-collar occurrence. This month, Ottawa police broke an identify-theft scam in which two people are accused of using fake credit cards to purchase $500,000 in electronic goods.

Like Mr. Lima, one of the 100 victims wasn't receiving mail and called Canada Post.

"Identity theft occurs when someone appropriates your personal information without your knowledge in order to perpetuate an offence," says Detective Constable Gary O'Brien of the Ontario Provincial Police's anti-rackets section in Orillia.

Thieves skim or copy data encrypted on the magnetic stripe of debit and credit cards, raid dumpsters for receipts, steal wallets or hack into computers for financial passwords.

Mr. Lima figures that a fake driver's licence was used as change-of-address ID. Last year, 50,000 bogus drivers' licences were issued from Toronto's Keele Street vehicle licence office, Mr. Degenkolb says.

"Canada does not have an offence called 'identity theft,' " Detective Constable O'Brien says. "When he [the thief] does something with it, it's a crime."

"Something" includes using fake ID to apply for loans or credit cards, or commandeering someone's accounts to commit fraud.

The Ottawa duo allegedly ran an on-line employment scam to acquire names, addresses and social insurance numbers.

Victims live an ongoing nightmare -- once they find out. There are American cases where victims knew nothing until the police arrested them on warrants.

Mr. Lima wasn't arrested, but he felt "victimized, confused and upset, and I wanted somebody to do something." He planned to stake out his redirected address, but Canada Post wouldn't provide the box number. "At first, I was upset. Then I realized it made sense," he says.

He concentrated on fixing his credit and debit fences. That "was a week's worth of business time spread over a couple of months," he says.

Mr. Lima replaced debit and credit cards, cancelled bank accounts because statements came by regular mail. The bank issued him new accounts, start-up cheques and a debit card. "The week before Christmas, I had no credit card."

He contacted Equifax and TransUnion to flag his credit ratings, and the companies automatically deducting payments from his credit cards or bank accounts.

He also traced invoice payments. Originally, he thought that his clients were late paying; when he sent second notices, they said, "The cheque's in the mail."

After the ID theft, "the clients were very good about things. First they had to put out stop payments," Mr. Lima says. All issued new cheques; one insisted that Mr. Lima appear with ID.

The fallout continued. His insurance company notified him that it was cancelling his life insurance if he didn't pay a premium. There was a $75 annuity for a Bank of America credit card issued by Alaska Airlines. Mr. Lima faxed the companies and updated the police.

Someone tried to get cable TV in his name. This month, he, his wife and daughter planned to see The Lord of the Rings -- the tickets were a Christmas present that never arrived. He called Ticketmaster, used his real driver's licence (not replaced), new credit card and an e-mail confirmation and arrived early at the theatre for specially marked tickets. He wondered if three people would appear with same-seat tickets. They didn't.

You don't need to reclaim your identity alone.

One option for protection is pre-paid ID theft insurance, which gives you a membership card with a toll-free number. Your accounts are monitored 24/7 for anything unusual. If ID theft occurs, "investigators go through the legal channels and government channels to speed things up," says Mr. Degenkolb, whose organization works with Kroll Background America Inc. throughout the United States, British Columbia, Alberta, Manitoba and Ontario to restore ID.

Ontario's Transportation Statute Law Amendment Act 2005 was further amended on March 15 to increase penalties to $400 to $5,000 for making false statements in driver's licence applications. For possessing or using a fake driver's licence, the fine is $400 to $50,000.

Visa and MasterCard use zero-tolerance liability for fraud. The Canadian Bankers Association recommends Criminal Code changes to include identity theft. Banks educate customers through monthly e-newsletters, such as Scotiabank's The Vault.

"For new [bank] accounts, you have to go into a bank for anything over $2,500, or by phone," says Joseph Iuso, CEO of UseMyBank.com. "A lot of banks have smart card meters."

Banks also use two-question ID with passwords for on-line banking, and the Royal Bank of Canada has three questions, says Mr. Iuso, who worked in automated banking, debit terminals, Internet and telephone banking for CIBC and RBC.

In December, 2002, Mr. Iuso founded UseMyBank, an on-line debit transaction set-up for sellers and buyers. Here, buyers can pay registered sellers by using their on-line bill-payment service with their banks as long as the bank is registered as well.

Mr. Lima, who estimates his costs at less than $100, switched to paperless accounting; client payments go through an on-line third party. "I don't get my clients' credit card numbers. I think on-line payments are more secure than using your credit card in person. The Internet can help you protect your identity; the Internet can also be used to steal your identity. This stuff isn't new; it's growing because people don't know how to protect themselves on-line."

Canadian ID-theft complaints for the first two months of this year totalled $1,876,683.58 for 1,137 victims.

Sharon Crawford is a Toronto writer and editor.

Protect yourself

Don't reveal personal information to telemarketers; don't carry SIN, birth certificate and ATM receipts. Shred.

Shield the keypad at ATMs and POS terminals.

Don't lend your credit cards; sign new cards immediately.

Deposit outgoing mail at post office or post office collection boxes. Remove incoming mail promptly from mailbox. For holidays, stop mail or have a trusted friend collect it. Change address well ahead of moving.

Review bills, bank and credit-card statements. Notify customer service and fraud departments of unauthorized charges.

List credit cards, debit cards, bank accounts, their numbers, expiry dates, credit limits, and customer service/fraud department phone numbers.

On-line:

Don't provide your real name or address in chat rooms.

Use only secure sites for accounting. Use bookmarks or type in full URL for on-line banking and e-commerce sites.

Don't respond or click on links when e-mail asks for personal info.

Delete e-mail from unknown senders.

Install firewalls, anti-virus and anti-spyware programs.

Change passwords frequently. Don't store on-line. Store in zip files.

Before on-line transactions, close other websites.

Clear your browser's cache and history.

Log out.

Be wary of public access computers.

Be aware of e-mail scams, bogus websites, etc.

Buy identity-theft insurance.

Sources: The Vault, Scotiabank, Joseph Iuso, UseMyBank

-- Sharon Crawford

If your ID is stolen

Start a log: dates, people you talk to and what they said.

Call the police.

Contact credit bureaus' fraud depts. Order copies of your credit report. Request "fraud alert" for your files.

Contact fraud departments (banks, credit-card companies, utilities) for tampered accounts.

Source: phonebusters.com