Identity theft
From Paperless Office
With enough information about you, a thief can pretend to be you and order credit cards, get loans or do other activities in your name. While you aren't liable for the thief's actions it can be a huge inconvenience to try to fix. Worse still, with enough information a thief may be able to get access to your banking data and potentially withdraw money from your bank. In some cases the bank may not be liable for the theft, leaving you to bear the loss.
A paperless office can be both beneficial and detrimental when it comes to identity theft. A properly encrypted hard drive will be very difficult for thieves to crack--much less easier than simply taking some files out of a file cabinet. On the other hand, if a thief can pickup your unencrypted laptop and get access to every piece of paper you've received over the past 10 years, they can steal that much faster than an entire file cabinet.
[edit] How identities are stolen
With enough information about you a thief can pretend to be you in order to get a loan, credit cards, or even get access to the funds in your bank account. On of the key pieces of information used to tie all of your credit history back to you is your social security number. If an identity thief can get your social security number and your name, they can often get credit in your name. When they don't pay the bill, it shows up on your credit history.
A number of people have found their identities were stolen when someone removed items from their mailbox or intercepted them somewhere. There's a great deal of information that travels back and forth through the mail. If someone were able to get a hold of the right letters they could easily steal your identity.
There are a number of different transactions where you will be asked for your Social Security number. When checking in at the dentist you may be asked to write your Social Security number on the form you are given. If you go to buy a cell phone they will likely ask for your Social Security number as part of the paperwork. Sometimes the Social Security number is actually necessary–sometimes it is not. Either way you need to think about where that piece of paper goes after they have entered into their computer system. Ideally it should be shredded. It simply goes in the waste basket it's not that difficult for an identity thief to discover this and simply go through the trash, or work out a deal to buy the paper from the janitorial service.
[edit] Protecting against identity theft
To protect against identity theft, you must make sure that your information is not easily accessible. This means taking care who you give your social security number to. Many forms ask for your social security number. Make sure you understand why someone needs it before you give it to them. In many cases, simply leaving that field blank will not hamper anything you are trying to accomplish and it is one less place where your SSN could be stolen from.
Sophisticated modern thieves that break into your house may be less interested in cash and electronics and more interested in what they can find in your file cabinets. Vital documents should be kept in a safety deposit box or at least in a home safe. A paperless office can help keep filed document secure using encryption while keeping them available in your home.
