Painful but true: Many thieves are well-known to their victims – relatives, coworkers, a neighbor or even a parent. Watch out for these warning signs.

By Liz Pulliam Weston

Many people worry about hackers stealing their passwords or Dumpster divers grabbing their financial documents. But a big chunk of identity theft is committed by the victim's nearest and dearest – or at least someone the victim knows.

Exactly how many identity thieves aren't strangers is a bit of a mystery. Nearly half of all victims have no idea how their information was stolen, and only about 1 in 4 knows who did the stealing, according to a survey by Javelin Research.

Of those who do know, however, half pointed to friends, relatives, neighbors or in-home employees.

They know your patterns, they have access to your financial information, they know those unique identifiers like your mother's maiden name, said Ken Hunter, head of the Council of Better Business Bureaus and former chief postal inspector, head of the fraud investigative arm of the U.S. Postal Service. It's just so easy.

Identity theft is so rampant today that you need to take steps to secure your financial information, regardless of whom a potential thief might be (see 10 ways to stop identity theft cold.) But you might want to be especially vigilant about certain people in your life if you notice any of the following warning signs:

Some thieves you may know

The addict. Combine impaired judgment with a desperate need for money, and you may get a drug abuser, compulsive gambler or alcoholic who turns to identity theft to feed her habit.

Many of the 'abuses' bring a demand for cash, notes Jim Vaules, an identity theft expert with data collection company LexisNexis. You see a lot of Internet gambling and pornography sites being charged to stolen credit cards, too. They might use (the card of) a family member or friend.

The rationalization king. We all know people like this. Whatever happens is never his fault. Either someone else is to blame or his behavior is perfectly justified, regardless of what the law says.

An adult child who's taking care of an elderly mother might decide, 'I need that new car so I can take her to her doctor's appointments,' said fraud expert Diane Terry, who has seen many such cons as the head of TransUnion's Fraud Victims Assistance Department.

Some even rationalize their behavior as a victimless crime, since lenders typically eat the costs and most victims pay nothing directly out of their own pockets. This view conveniently ignores the 28 hours on average that victims spend trying to restore their financial lives, as well as the emotional fallout from being victimized.

It's bad enough when you don't even know the person who's done this to you, Terry said. When it's someone you know, it's heart-breaking. Most people don't get over it easily.

The toll can be especially devastating if the thief is a parent. Many parents who have stolen their children's Social Security numbers to get utilities, credit cards and loans refuse to admit they've done anything wrong, and may even try to turn other family members against the child who complains, said Linda Foley, executive director of the Identity Theft Resource Center. (For more details about this trend, see The newest identity thieves: parents.)

The high-living deadbeat. Today even mainstream lenders have units that specialize in making loans to people with troubled credit. But a true deadbeat may simply be borrowing others' good names rather than paying sky-high interest rates to use her own.

Fraudsters – embezzlers, con artists, identity thieves – often give themselves away by living a little too well, given their resources and credit, Hunter noted.

If someone's a friend or family member, you know what their job is and roughly how much they get paid, Hunter said. If they're living a lifestyle that doesn't correlate with that, that might be a sign.

The 'gotta have it' guy. Impulse control is not this guy's forte. He might be an addict or a rationalizer, but mostly he's a spender who wants what he wants when he wants it.

He might be a teenager who's been told he can't have something and who doesn't fully appreciate the consequences of stealing Mom's credit card, said Vaules, a 28-year veteran of the FBI who once headed the National Fraud Center. Or the thief might be someone who thinks he deserves more than he's able to afford legitimately.

The attitude is, 'I'm entitled,' said Foley, who herself was the victim of an employer who stole her identity. It doesn't matter who's in the way.

The nosy friend. You found her poking away at your computer or rifling through your files. She asks detailed questions about your finances, and wants to know information that's clearly none of her business. Yes, she might just be a pest, but she may have darker motives.

The devious ones can cloak their intrusiveness by pretending it's all for your benefit, Terry warned.

Sometimes they say, 'I want to add you as a beneficiary' to a life insurance or retirement account, Terry said. 'I need your Social Security number, your date of birth and your full name.' Now they have everything they need to commit identity theft.

The grudge guy. A vengeful ex-spouse, ex-lover, ex-friend can wreak a lot of havoc in a short time. He probably knows everything needed to open new accounts in your name – the most expensive kind of identity theft and the kind that tends to go on the longest – and the motive for making your life miserable.

If you're separating, you'll want to take special care of your credit even if the split is amicable. (See Don't let your ex trash your credit.)

The repeater. Remember that old saw about a leopard and its spots? Identity thieves know their chances of being prosecuted are small – about 1 in 700, according to a Gartner study. Those who target family and friends know that the risks are even smaller, since many victims balk at prosecuting someone they love.

Sometimes, it's a single act of desperation, and they need some counseling and some help in getting their financial act together, Foley said. Other times, they may go from one family member to the next until they run out of family members and move on to strangers.

Foley said that family and friends owe it to each other to spread the word, quietly if they've been victimized, so that others the thief knows can check their credit reports and otherwise secure their finances.

She also recommends filing a police report, a step many family and friends are reluctant to take because it may lead to the thief's arrest and conviction. Without a police report, most creditors won't remove the black marks from your credit reports. Besides, a little tough love may be the only way to stop a miscreant from becoming a career criminal.

Maybe you're giving a gift, Foley said, in helping them get the help that they need.

The stranger with access. Even otherwise nice people can tolerate some truly scummy people in their lives. Your dear housekeeper may be married to a con artist, or your beloved son may bring home a friend who's decided that theft beats working for a living.

Likewise, you may open your doors to an identity thief when you throw a party or have work done on your home.

Shut the door on identity theft

At this point, you might be tempted to bar your doors, bury your credit cards in the cellar and hook people up to a lie detector like Robert De Niro's character in Meet the Parents. All that might be a slight overreaction.

So what can you do if you suspect someone you know may not be trustworthy? The identity-theft experts offered these ideas:

• Lock it up. Use locking filing cabinets for your financial paperwork and throw your checkbook in there, too. Keep the files locked any time you're not actually using them.
• Password protect your computer and any financial files contained inside. Change the passwords often. (And – just in case it's not obvious already – don't put the password on a sticky note attached to the screen.)
• Don't give anyone else your credit or debit cards or PINs. If you've already made this mistake, call the issuer to issue a new card and change the PIN.
• Have the talk with your kids. Your children need to know the importance of good credit, and the terrible problems that can result from late payments, collections and other fall-out from identity theft.
• Be cautious who you ask to housesit or pick up your mail when you're on vacation. A housesitter can rummage through your files; neighbors can swipe your statements and convenience checks. You can ask the post office to hold your mail, or you can switch to banking solely online. (See Go paperless for safer banking.)
• Monitor your accounts online. Everybody should check their monthly statements to make sure their accounts haven't been hijacked, but those who had online access to their accounts often detected theft faster, the Javelin study found. Checking in at least once a week is a good idea if you have reason to suspect you're at risk.
• Pull your credit reports more often. It's a good idea to check your reports at all three bureaus (Equifax, Experian and TransUnion) at least twice a year. You're entitled to one free report from each every year. If you suspect an identity thief is in your midst, even more frequent checks might be in order. (By the way, checking your own credit reports won't hurt your credit scores, the three-digit numbers lenders use to gauge your credit-worthiness.)