Just a few years ago, identity theft was unheard of. Now, unfortunately, it’s important enough to deserve its own chapter. This is one of the unintended consequences of the Information Age and the rise of the Internet. Brace yourself, because what we’re going to reveal here isn’t pretty. But being forewarned and forearmed can save you untold dollars, hours, misery, and stress. Don’t ignore it.
We often take our liberties for granted. We assume that tomorrow is going to be a lot like today. But that all goes out the window when you’ve been a victim of identity theft.
Without your knowledge someone can steal your personal information and rack up debts or commit fraud – all with your name on it. After that happens, you could be denied employment, denied credit, or even be arrested and charged with a crime you didn’t commit.
Identity theft is that serious.Victims of identity theft can spend years paying back debts or fighting to restore their credit as well as their reputation. Finding out you are a victim of identity theft can be frightening and a source of anxiety even after you’ve resolved the issue.
According to a survey conducted by the FTC (Federal Trade and Commission) 4.6% of Americans involved in the survey responded that they had been a victim of identity theft within the past year. That means about 10 million Americans dealt with some form of identity theft – from using existing credit cards to setting up new accounts or giving false identification when arrested for a crime.
It doesn’t stop there. The cost of clearing up the theft ranged from an average of $500 to $1200 per victim. It took them on average 30 hours to resolve the issue while also costing time and money for businesses and agencies who assist these victims.
With all the tools available to potential thieves along with our increasing reliance on paperless money transfers (credit cards, debit cards and online payments) we are increasingly susceptible to having this nightmare come true.
How can you reduce the risk? What do you do if it happens to you or your family?If you think you already know how to keep thieves out of your personal information, you may be surprised at the methods they use to gain access to it. Finding out how thieves access your information is the first step in reducing the risk.
Lost or Stolen WalletNot surprisingly, a person who has had their wallet lost or stolen is at great risk of becoming a victim of identity theft. Carrying important documents like your Social Security Number, birth certificate, driver’s license and credit or debit cards in your wallet can give a thief easy access to your personal information.
The defense: Don’t carry your social security card or birth certificate in your wallet. They belong in a safety deposit box. Keep a record of your credit and debit cards, with customer service phone numbers, in a safe place. If your cards are stolen, notify the companies immediately to close your accounts. The law protects you by limiting your liability.
Missing MailIf you think you’ve missed a couple bills or know that your mailbox has been broken into, your personal information may have been stolen. Credit card bills, offers for credit cards and information that contains personal information or your SSN can be used to gain access to unauthorized credit or to commit fraud in your name.
The defense: If you have a rural type mailbox that is not secured, buy a lockable one. (Make sure your local post office regulations permit this first.) If you know your mail has been stolen, watch your credit reports closely. If a new account or even a new inquiry shows up that isn’t familiar, find out about it immediately.
GarbageThinking of throwing the latest credit card offer in the garbage? Clearing out old tax forms or other personal information? Rummaging through the garbage for such information is known as ‘dumpster diving’ and can be an easy source for identity thieves. Your personal garbage isn’t the only source – businesses that collect personal information can also be targeted.
The defense: Always shred sensitive documents. You can easily find an inexpensive paper shredder designed for home use.‘Phishing’ or ‘Pretexting’
Online or over the phone there are unscrupulous individuals masquerading as legitimate businesses in an attempt to convince you to pass on personal information for illegal purposes.
The defense: Question any requests to ‘validate account information’ by providing personal information online or over the phone. Generally banks and credit card companies will not contact you with this kind of request, so be suspicious. When in doubt, hang up and call the company at a known phone number. If you follow links in unsolicited emails and you get to a page that asks you to log in, don’t do it! You may be revealing your username and password to an identity thief, even if the page looks like it belongs to the right company. Instead, navigate to what you know to be the right address for the company’s web site.
Businesses or EmployeesEmployees or businesses that have legitimate access to your personal information may use that information for non-business activities. Identity thieves that work in institutions that contain sensitive personal data may abuse the access they have or even present themselves to you as someone that should have access, such as a landlord or employer.
The defense: This one is mostly outside your control. As always, monitor your credit reports for unexpected activity.‘Skimming’
Thieves have access to devices that allow them to steal information from your card at ATMs or during a card swipe for a purchase. These data storing devices can capture your information without your realizing it.
The defense: Again, monitor your credit reports for unexpected activity.Change of Address
By filling out a form at the post office, an identity thief can have your bills and other personal mail diverted to a new address. It may take you a few days for you to realize what has happened and make the correction.
The defense: If your mail stops arriving as expected, go immediately to your post office and find out why. If it’s been diverted, be sure to monitor your credit reports.
Spyware and AdwareA new threat on the scene is from computer viruses that ‘spy’ on you while you shop or do banking online. Any website that you enter personal information into can be ‘spied on’ putting you at risk.
The defense: Numerous tools are available online to scan your computer for these threats, remove them when found, and protect your computer from future infections. One that I recommend is SpywareRemover, which offers a free scan for your computer.
Unsecured Online TransactionsOnline shopping at a site that is not secured can potentially put you at risk of having your information stolen. Web sites may also collect and sell some of your information without your knowledge unless their posted Privacy Policy states otherwise.
The defense: Shop online at merchant sites you know and trust. Make sure they have a posted Privacy Policy that makes sense to you.Break In
Anytime you or a business that has your information is a victim of a break in you may have had personal information stolen.
The defense: Again, monitor your credit reports for unexpected activity.
Personal Computers
Are you storing sensitive passwords on your laptop? Are you throwing out an old computer? If your laptop is stolen or accessed by a thief they may be able to find that information. Old computers may hold information on their hard drives even when you’ve deleted it.
The defense: Keep your passwords safe and offline, or use a program that stores passwords under password protection. Before you give away or sell an old computer, make sure that the disk drive is wiped clean. This doesn’t mean just erasing the files or even formatting the drive. You must use a special program called a file shredder; otherwise the information may be recoverable. Search online for “file shredder” and you’ll find several free tools you can use.
Ironically, the Internet can put you at risk of identity theft, but it can also provide online resources that can help. You can subscribe to services that monitor your credit report and help to protect you from identity theft. These include LifeLock, which is backed by a million-dollar guarantee that if your identity is ever stolen while you’re their client, they will do whatever it takes to fix it. Another one I recommend is Privacy Matters, whose subscription includes unlimited copies of your credit report and your credit score (also called FICO score).
If the worst has happened and you find out you have indeed been a victim of identity theft (or have reason to suspect it) you must take immediate action to control the damage.
Report to the Credit BureausYou must report identity theft immediately to one of the three major credit bureaus. You only need to call one bureau to place the fraud alert and they will forward the information to the other two. Your SSN will be flagged for 90 days to prevent anyone from trying to obtain new credit with your identification.
If you are certain that your identity has been stolen you can request an extended fraud alert. The extended fraud alert will remain on your report for seven years and will require you to submit an identity theft police report.
Flagging your account will alert potential creditors to take steps to protect you. This will also delay the credit approval process.You can find contact information for the three credit bureaus in the Appendix.
You will be asked for your SSN and other identifying information through an automated service. The alert will be passed on to the other two bureaus and all three credit bureaus will send you a letter to confirm the fraud alert is in place. You will also be given directions for obtaining your credit report for free from each of the bureaus.
The credit reports will have a telephone number listed on them if you need to contact the bureaus about fraudulent activity listed on the reports.Get Copies of Your Credit Report
Send for your credit reports following the instructions from the credit bureaus. Review the reports carefully. Look for creditor’s names that you did not request credit from. Also check your personal information; SSN, address, name, initials and employer information.
Order your credit report at least every three months for the first year of the fraud. Some areas provide a free report every 12 months. Other areas will give you several free reports for the year you report an identity theft. Some will charge for each report. Tell them you are an identity theft victim and ask for a free report.
File a Police ReportKeep records of the fraudulent activity as proof for your report. Blackout unrelated activity and give copies to the police. Give them any new evidence as it turns up and keep a copy of the report as proof for creditors and the credit bureaus.
Collect Account InformationContact the creditors who issued accounts to the identity thief. The Police may give you a form to request the information. Send a copy of the police report and the account statements to the creditor. Pass any new information over to the police.
Close the AccountsFor new accounts created by the thief: Call the creditors (including credit cards, department stores and cell phone accounts) and ask for their security or fraud department. Tell them you are an identity theft victim and ask them to close the accounts and report the closing to the credit bureau. If the account has already been used by the thief ask them not to hold you responsible for the debt.
For existing accounts used fraudulently by a thief: Close the accounts and ask the creditors to report the closing to the credit bureaus. Request that they declare the account “closed at consumer’s request.” If you open a new account don’t use personal information like your mother’s maiden name or your SSN for a password. If those are the only options request to use a different password.
Alert Government AgenciesIf your driver’s license or other government ID has been stolen report it to the proper agency to cancel it and order a replacement. Ask that your information be flagged so that no one else can get copies.
Complete an Identity Theft AffidavitIn order to remove the debts created by the identity thief you will need to send an affidavit to the company or creditor holding the debt. When you contact them to close the accounts ask what forms they require. The affidavit permits them to investigate the claim – it does not ensure that the debt will be cleared.
While each business may have its own requirements you can also obtain a free affidavit form at the FTC web site. Ask the business if they will accept this form or need you to fill out one of theirs.
Send the copies of the affidavit and supporting documents to the businesses (a separate form should be created for each account or institution responsible for providing the identity thief with credit). Do not send original bank or card statements. Black out any information on the statements not related to the account.
Send a copy of each affidavit and the police report to the credit bureaus. Write a letter requesting the information you declared was a result of theft be blocked or removed from your credit report.
Report Stolen MailIf you believe that your mail has been stolen you must contact the nearest Postal Inspector. You can look for the number in your white pages under Government Services, call 1-800-ASK-USPS or search online at http://www.usps.com/ncsc/locators/find-is.html.