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The Dangers of Identity Theft
Identity theft can destroy your credit, your ability to obtain credit loans, student loans, or a mortgage, your ability to buy, sell or rent a home, your ability to enter or leave the United States, or your ability to begin utility services. Someone impersonating you can report their wages with your social security number. This may trigger a tax audit from the Internal Revenue Service and generate tax penalties in your federal tax return from wages you did not know about. If the impersonator receives too many traffic violations, fails to appear in court, or commits a crime, an arrest warrant can be issued in your name and you could be arrested for a crime you know nothing about. Of course, these things do not happen to everyone. They may never happen to you. But, should these things happen, the effects could be devastating.
In our everyday lives, we try to prevent bad things from happening. We try hard to reduce the risks we take with our health and personal safety. We should also reduce our risks for identity theft. Just as with everyday activities, there is no guarantee of 100% safety. Consumers do not have control when companies store their personal information and preferences in databases. When security is not in your control and can be compromised, consumers can (and need to) monitor credit reports extremely carefully and hope we can identify any problem as it begins.
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You may be a victim of identity theft if you are:
- receiving debt collection calls for another person
- being contacted by debt collectors and businesses about goods or services you did not purchase or apply for
- receiving credit cards you did not apply for
- being offered less favorable credit terms for no apparent reason
- being denied credit for a reason that just does not make sense
- being requested to confirm a new account application in the form of a late monthly statement, a phone call or letter.
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Prevent Identity Theft
Everyone should check their credit report at least once a year. Americans can get one free copy of their file from each credit reporting agency per year at Annual Credit Report.
If you suspect something is wrong with your credit report, the first thing to do is get a copy of your credit report from the credit reporting agencies handling your information. There is a list of world credit reporting agencies at http://www.ccmostwanted.com\topics\idtheftCredit.htm.
Check every detail: your name, address, each creditor, each amount, each account number, each employer, and each inquiry to be sure there are none from companies you did not contact and the information is accurate.
Any information that is accurate – good or bad – remains in the credit history for a specified time period according to the law that applies. Many identity theft crimes are credit card fraud when your credit card or credit card number is stolen and used. Should this happen, immediately contact your credit card issuer. Also contact the credit reporting agency using their “Dispute Form".
Keep copies of all submitted forms and information with proof of the date, and if possible, the time. If you do not receive an acknowledgment from the credit reporting agency about the dispute in 30 days, they can file a complaint with the Federal Trade Commission. Continue this process until the information in your credit file is accurate. Then, monitor the information in your credit reports at least once a year.
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Guidelines to Protect Yourself
Here are some guidelines to help protect your sensitive personal information and help prevent identity theft.
Dispose of personal information safely. Shred credit card and ATM receipts after they are posted on statements. Shred credit, bank and account statements, credit card solicitations, pre-approved credit offers, unused credit card offers, prescription labels, identification cards and junk mail that are no longer useful or have expired such as drivers licenses, government and state identification cards, insurance cards, medical identification cards, or drug prescription cards.
Don’t leave digital copies of sensitive information on a computer. Store copies of personal information and financial records on removable media kept in a safe deposit box.
Only carry on your person identification and credit or bank cards that you expect to use that day. There is no reason to carry birth certificates, passports, all your credit cards, insurance cards or social security card.
Don’t return warranty cards for purchased items. The receipt is what you need for proof of purchase to make a claim.
Never agree to return an overpayment of excess funds. Request payment to be reissued for the correct amount.
To verify a check, call the bank issuing the check or money order or a check verification company but do not use the telephone number printed on the check or money order.
Monitor the information in your credit reports on a regular basis to be sure the information is accurate and complete. Children under the age of 18 typically should not have a credit report unless they are employed or applied for credit.
Nearly four percent of American identity theft victims are children who should not even have a credit report. Unfortunately, if you can imagine, there are family members and relatives who illegally apply for credit in the child’s name. There are also professional identity theft thieves who search for and sell children’s social security numbers along with everyone else’s. Protect the social security numbers of your children and family.
The majority of American lenders accept the American consumer FICO score as a standard. You do not have to request credit reports from the major credit reporting agencies at the same time. Read the publication “Your Access to Free Credit Reports" by the Federal Trade Commission.
Pay attention to your Social Security Statement of Earnings and Benefits. The Social Security Administration mails a statement each year about three months before your birthday. The statement contains a record of earnings history and an estimate of how much the worker and the employer paid in Social Security taxes. It also includes estimates of benefits you (and your family) may be eligible for now and in the future. If you need to order your statement at another time, visit the Social Security Administration.
Do not give your credit card, insurance, hospital, banking, or social security information to someone who called you unless you absolutely know the person, their voice, and the reputable company.
Request organizations that may use your social security number as an identification number to change it. Possible organizations can include drivers’ licenses, hospital identification cards, insurance cards and utility companies.
Be wary when punching in numbers or passwords into an ATM, computer, or telephone in a public place. Use your body to cover another person’s view of the numbers being used.
Don’t display your personal information (invoices, bills, statements, home address, email address, account numbers, passwords) for easy reading by any observer on luggage, key rings, websites, tables, desks, counters, or tattoos.
Don’t make your passwords, login information, or personal identification numbers (PINs) available to relatives, friends, employees, or co-workers.
Be sure your monthly statements (banking, utility bills, credit card, financial accounts) arrive regularly. Check each item on each statement. When you find errors, be sure to immediately discuss the discrepancy with the company.
Be careful about computer infectors, including Trojans and spyware that can be installed on your home computer or cell phone that can send your information to an unknown person or mirror your keystrokes to steal your passwords and personal accounts information. Use anti-virus, encryption, and spyware detection software. These are good precautions for computer intrusion. No one wants a stranger snooping through, replacing, altering or stealing the belongings in their home, car, or computer.
Be careful about phishing scams so you do not unknowingly provide your personal online or financial information to unscrupulous persons, companies, or websites.
Be careful about cashiers’ checks in your postal mail from a seemingly familiar or reputable company without accompanying explanations or an account statement. When your (the depositors) bank discovers the account the check is written on is closed, the bank automatically returns the check to the account holder of the check. This provides the account holder with your (the depositors) banking information. It also makes you responsible for the funds deposited. Remember that reputable companies do not issue checks without accompanying letters or statements.
Don’t allow incoming mail to accumulate in the mailbox. Put all outgoing mail in post office collection boxes. Don’t put outgoing mail in an unsecured mailbox like the one at your driveway or front door. Try to use a post office box for all correspondence from government agencies and businesses. This correspondence includes all monthly statements, offers, checks, and anything else that can individually identify you along with your name and address.
Check your homeowner’s insurance policy to determine if costs associated with restoring your identity and credit history are covered or are available at an additional charge.
Be aware of CyberLover, a new sophisticated social engineering software, programmed to impersonate a real person looking for love online typically in chatrooms, social networking websites, and dating websites. In reality, CyberLover collects personal information such as addresses, maiden names, phone numbers or birthdays then makes the collected information available to criminals for identity theft and any other purpose the criminal can imagine. As of December 2007, CyberLover was limited to Russian websites but no one can predict for certain if or when CyberLover will expand to websites of other languages. You can read the news article by Nicole Martin at http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/12/10/ninternet110.xml.
Do not use “out of office" replies with incoming email and phone calls. This is no different than posting a sign at your office or the front door of your house with your name, job title, how long you will be away, hen you will return, and your contact information. You can see the potential for the clever fraudulent mind. Forward your incoming email and phone calls to a co-worker with their permission instead.
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Handling Identity Theft in the United States
If you find accounts in your credit report that resulted from identification theft (accounts you did not open, apply for, or request):
1. Tell your local police department. Be sure to keep a copy of their police report.
2. Tell the three major credit reporting agencies that a false credit application and/or account have been made in your name. It is preferable to use the notarized ID Theft Affidavit form at the FTC’s Identity Theft Clearinghouse and follow their directions. This is the form that is shared with law enforcement. Provide a copy of your local police report. The information on this affidavit form is entered into the Consumer Sentinel database along with online, telemarketing, and other fraud-related complaints that are available to criminal and civil law enforcement agencies in the United States and sometimes to law enforcement agencies outside the United States.
3. Request that a Fraud Alert be placed in your credit file of each of the three major credit reporting agencies. Remember that a fraud alert can expire in as little as 90 days. But, you can request an Extended Fraud Alert that remains in your file for seven years. This requires at least proof of your identity and a copy of the police report you filed.
4. Request a credit freeze be placed in your credit file.
5. Send each credit reporting agency a statement (no longer than 100 words) explaining the disputed item and request that it be attached to your credit report. This will allow prospective creditors to read your statement with your credit report.
6. Request new account or identification numbers and passwords with each creditor, drivers license, any identification documents including government issued identification, and each financial and banking account (including online accounts). Follow their procedures for canceling identification and issuing new identification. Be sure to request a “flag" (not always labeled that) so someone other than yourself can’t be issued new identification in your name.
7. Request in writing the name of the creditor and amount due from debt collectors should they contact you; and, copies of applications for accounts opened in your name without your consent from creditors.
8. Contact utility companies and let them know about the possibility of an identity theft that may try to establish accounts in your name with your identification. Request a PIN so the imposter can’t gain access to your account information. Utility companies can include gas, water, oil, electric, phone local and long distance, cable, garbage collection, cell phone, etc.
9. Request in writing to block the reporting of information resulting from ID theft, not resulting from a mistake on your credit report, with both the creditor and credit reporting agency. Be very specific and list each item separately. Include copies of your FTC notarized ID Theft Affidavit. Also send proof of your identity to the credit reporting agency. The credit reporting agency must notify you if they refuse.
10. Contact your Postal Inspector if someone has filed a change of address in your name without your permission or if someone stole your postal mail.
11. Contact your local Social Security Administration office if your social security number or employer identification number has been stolen or used by someone else. Periodically check your Social Security Earnings and Benefits Statement to be sure someone is not reporting their earnings to your social security number. Don’t be a victim of a scam offered by fraudulent companies or individuals who claim to legally issue you a new social security or employer identification number. Not only is this illegal but you are personally responsible even if you did not know it is against the law.
12. Contact your state Attorneys General Office website to know about additional rights and laws in your state. Also, read the FTC’s publication “What To Do If Your Personal Information Has Been Compromised".
13. Know about the advantages and disadvantages of opting-out.
14. Know about Credit Freeze and Security Breach Notification Laws.
15. Maintain copies of all correspondence and a log of what forms were submitted, what calls were made, what was said, the date and time, to whom, and by whom. When you mail anything, be sure it is a registered letter with a date stamp, time stamp, and return receipt. When you submit an online form, be sure the copy you save or print has the current date and, if possible, current time. You need to continue this process until all the information in your credit file is accurate. Once the information is accurate, continue monitoring the information. There is no guarantee false information will not find its way back into your file.
Should you find that a company has received a stolen or forged check from you, contact the appropriate major check verification company and your state’s banking department. One check verification company can be found at Consumer Debit Resource.
Should you find on your credit report that bankruptcy has been filed in your name, contact an attorney who specializes in consumer protection or identity theft. It isn’t a bad idea when you find accounts in your credit report that you did not open, apply for, or request, to have a criminal background search done on yourself. Should you find criminal activity associated with your name, social security number, and/or identification, immediately contact an attorney who specializes in consumer protection or identity theft.
Consumers have an option to use the services of legitimate companies that specialize in identity theft recovery. One such company is RelyData.
In addition to getting a free copy of annual credit reports, you can order free annual copies of other reports.
- ChexSystems for a database of mismanaged checking and savings accounts.
- Choice Point for CLUE, the insurance industry’s database of property loss claims, your employment and tenant history reports.
- Consumer Debit Resource for bank account history.
- The MIB (Medical Information Bureau) for medical information shared by insurance companies. Your information should only be in here if you applied for an individual (not group) underwritten disability, health or life insurance in the past seven years.
- Additional tips from Mike here: http://www.elitepersonalfinance.com/how-to-prevent-identity-theft/