The economy might be dragging, but one business is booming: identity theft. Every year, about 9 million Americans discover that other people are pretending to be them. Not just saying, “Hi, I’m Joe Schmo,” but using their names to apply for loans, rent apartments, obtain fake driver’s licenses or make unauthorized charges from accounts.
Negative information on your credit report, thanks to thieves not paying bills, can result in denied credit, lost job offers and rejected rental applications. The average victim loses almost $6,000, for a nationwide total of about $50 billion a year.
Recovering a stolen identity can be a nightmare, sometimes requiring months of time and hundreds of dollars, but some simple precautions can reduce your risk. If you suspect identity theft, taking quick action limits the damage.
Financial account fraud is the most common. Thieves use victims’ personal information to open credit card and bank accounts or get loans. They charge to credit cards, write counterfeit checks or withdraw money using cloned ATM cards. Utilities are also targets.
Thieves combine victims’ personal information with their own photos to get official documents. A thief could even provide your personal data during an arrest; if he or she doesn’t appear in court, you receive an arrest warrant.Prevention
Information such as your name, Social Security number and bank account numbers are the keys that unlock your identity. Here are tips for thwarting attempts to get that data:
• Thieves steal mail from mailboxes to snag bank statements, preapproved credit offers, tax documents and even new checks. Using a P.O. box is one solution, but you get junk mail at your street address, too. Or try a locking mailbox if you don’t mind picking up packages at the post office.
• Sifting through trash is another technique for stealing information. Shred paperwork with a shredder that makes confetti, not strips. For large quantities, consider a professional shredding company.
• Don’t give out personal data over the telephone, through e-mail or on a website unless you know who’s asking. Call the company’s published phone number, type its URL into your browser or enter its e-mail address into your e-mail program.
• Don’t carry your Social Security card in your wallet or provide it to anyone unless absolutely necessary, and ask companies to use an identifier other than that number.
• Store financial and personal information in a home safe, a locking file cabinet or a safe-deposit box.
You must stay vigilant. Store or restaurant employees can steal card numbers by scanning the cards they process with a special device. Phishing e-mails and spam messages requesting data can look as if they come from authentic companies. Thieves break into offices to steal personnel, customer or patient records. Detection
Regularly monitoring your accounts and credit report is the name of the game. Here’s what to watch for:
• Review bank account statements every month. Spot fraud quickly by examining your accounts online or downloading transactions into a program such as Quicken or Microsoft Money.
• Thieves often fill out change of address forms so that you no longer receive bills or statements, which delays your discovery of fraudulent transactions. Keep a list of when this mail should arrive and contact companies if it doesn’t.
• Watch for letters or phone calls related to purchases you didn’t authorize or for statements from accounts you didn’t open.
• Review your credit report for unauthorized activity. By law, you can get a free copy of your credit report every year from each nationwide credit-reporting company — Equifax, Experian and TransUnion — by calling 877/322-8228 or by going to the Annual Credit Report website. Rotate your requests for a free report to a different company every four months. Action
If you suspect identity theft, or your wallet was lost or stolen, take action immediately to minimize damage. Here are the basic steps:
• Call companies that show fraudulent activity in your name and follow up in writing. With credit cards, you can dispute a fraudulent charge without closing the account. If unauthorized charges continue, request a new account number or close the account.
• Place a fraud alert on your credit report. An initial alert lasts 90 days and requires potential creditors to follow thorough procedures to verify your identity before issuing credit in your name. Call one of the nationwide reporting companies: Equifax at 800/525-6285, Experian at 888/397-3742 or TransUnion at 800/680-7289. The company you call will notify the other two. Alerts don’t prevent unauthorized activity in existing accounts.
• A credit freeze hides your report from potential creditors. If you want to open an account or perform other actions that require access, ask the reporting company to temporarily lift or remove the freeze. It also doesn’t prevent unauthorized use of an existing account. Credit freezes are subject to state laws or reporting-company policies and might have a fee.
• File an ID theft complaint with the Federal Trade Commission. Include it in your police report to create an identity theft report, which triggers legal rights when delivered to credit-reporting firms and other companies. You can use an identity theft report to permanently block fraudulent information from appearing on your credit report or to prevent a creditor from selling debts for collection.
• Place an extended fraud alert, which lasts seven years, on your credit report. Potential creditors must contact you directly before issuing you credit. You must provide a police report and copy of your FTC complaint.
• If your identity has been stolen, monitor your accounts and credit report closely for at least a year.
To learn more about identify theft prevention and recovery, call the FTC at 877/382-4357 or visit its website.Link of the Month
Companies have popped up selling products and services that help protect your information or recover a stolen identity for a monthly subscription fee of $1 to $15. The most common service is credit monitoring, which watches your credit report and sends you an e-mail when new activities appear. With companies that help recover your identity, you give them limited power of attorney and they straighten out your records. Top Ten Reviews compares up to 10 protection services.Websites of Interest
Annual Credit ReportFederal Trade Commission: Identity TheftFederal Trade Commission: Filing a ComplaintTop Ten Reviews
Bonnie Biafore is the author of 24 books about investing, personal
finance, project management, software (such as QuickBooks and Project)
and the recently published novel, Fresh Squeezed. Go to
BonnieBiafore.com to learn more.