Identity theft occurs when someone obtains pieces of your personal information, such as your driver’s license number and social security number, and uses them to impersonate you.  They may create credit accounts in your name, obtain employment in your name, or even apply for a mortgage in your name!

Newsworthy

In 2003, the Federal Trade Commission conducted a survey on Identity Theft.  Their survey suggested that nearly 10 million Americans were affected by identity theft during the previous year!  That’s a LOT of people!  (Understatement?  Possibly.)

Many types of identity theft crime exist.  They include:

FINANCIAL: A person uses your name and social security number to commit any of the following: credit card fraud, bank fraud, computer and telecommunications fraud, social program fraud, tax refund fraud, mail fraud, etc.  Businesses, as well as individuals, are at risk for this type of crime.

CRIMINAL:  A person uses your name and information when stopped by law enforcement, causing an arrest warrant to be filed in your name.

ID CLONING:  A person uses your name and information to become a “new person”, living and working as you.

Every transaction that requires you to give out your personal information (name, social security number, bank or credit card numbers, address, phone number, etc) puts you at risk for becoming a victim of Identity Theft fraud.

You CAN minimize your risk, though and for those who have been victims, there is assistance through the FTC and other agencies.

Every day, we conduct transactions that require us to give out our personal information.  We eat at restaurants and pay with a credit card.  We write a check to the grocery store.  We use our cell phones.  We apply for new credit.  We fill out surveys.  Just normal average everyday things…all requiring our personal information to be shared.  Each of these puts you at risk.

Identity thieves will stop at nothing to get your information:

• They steal your wallet, your purse, your mail
• They change your address with the post office in order to divert your mail
• They will go through your trash, looking for information
• They fraudulently obtain copies of your credit report
• They buy information from store employees
• They use information that you’ve shared on the internet

With your personal information, they can:

• Open new bank or credit card accounts, using just your name, social security number and date of birth
• Change your address with your bank or credit card companies in order to divert your mail to them.  Once they’re receiving your statements, they have even MORE information about you and can run up thousands of dollars in charges on your accounts with you being none the wiser.
• Set up utilities (phones, internet, electricity, etc) in your name
• Buy cars by applying for loans in your name
• Obtain mortgages to buy a home
• File for bankruptcy to avoid paying bills they’ve incurred in your name

Scary stuff, isn’t it?  Your information is so easy to obtain.  And there is so much that they can do with that information!  However, there ARE ways to minimize your risk.

Before I go further… Do NOT panic!

Identity theft is indeed scary, because it seems so easily done.  This is NOT cause to panic!  Just be cautious and use some common sense when it comes to your personal information. 

This does not mean that you should completely avoid ever giving out your name or that you can never write another check or pay by credit card again.  DO NOT begin burning all your trash (especially if you live in the city, as cities seem to frown on such things). 

You can actually: introduce yourself to people, eat out at restaurants, buy goods, and use the internet.  This may sound silly, but I know of people who are so totally paranoid when it comes to ID Theft that they’ve thrown common sense out the window.

What you should do: be cautious, be prudent, and use common sense. 

Follow these tips to help protect yourself from Identity Theft:

Between Us

I’ve had callers who have posed as my bank’s representative and asked for my social security number and bank account.  My bank would already have that information.  I asked the person for their name, the number where I could contact them, and then immediately called my bank (using the real phone number) and reported the instance to them.

Personal Information:

Know how your personal information is going to be used, before you give it out. 

On the internet, view a site’s “privacy policy” before sharing your information.  You can view the policy of this site here.

Never give out your personal information by phone, over the internet, or by mail, unless YOU initiated the contact.
If you are requested to use your social security number as identification, ask if there is an alternative.  Your social security number should only be given out when absolutely necessary.

Credit Cards, Banks, and Other Billing Statements:

Between Us

It really annoys me that the credit card companies send checks/cheques with their billing statements.  I know they want me to use them, so they can make money, but it puts us all at risk, if those are stolen.

Always, always, always review your billing and banking statements and dispute any charges that do not belong to you.  I am shocked by the amount of people who do not look at their credit card statements and phone bills to verify that the charges are accurate.  Don’t be those guys!  It only takes a few minutes.

Don’t allow your bank to print your social security numbers on your checks…cheques, if you’re in Canada, as I recently found out :D

When you order new checks/cheques, ask the bank to hold them for you and pick them up yourself, rather than having them mailed to you.

If your bank or credit card issuers send you courtesy checks that you do not use, DESTROY THEM or keep them someplace that you know is safe.

If you have credit card accounts that you do not use, consider closing them.  The fewer the cards you have, the lesser the risk. 

When shopping, take your receipts with you.  Don’t throw them away in a public place.  At least, not without tearing them into small pieces!

Make a list of all your banking and credit card accounts, including the account numbers, their expiration dates, and their customer service phone numbers.  If these items are stolen, you’ll be able to quickly call and inform them.

Passwords:

Password-protect your accounts.  Use SMART passwords, not your mother’s maiden name or your birth date or any other personal information.  Smart passwords usually contain a combination of letters and numbers.  They are difficult for others to guess, yet easy for you to remember.  Do not write them down!  And never, NEVER, give out your password.

Between Us

Several years ago, my wallet was stolen out of my car (I wasn’t following my own tips!).  Within one hour, I had informed all of my credit card companies and my bank of the theft.  My bank was able to put a stop (for FREE) on the exact series of check numbers that had been stolen, so I wasn’t even forced to change my bank account.  In all cases, the credit card issuers and the banks were extremely helpful and knowledgeable concerning stolen cards/checks.  Which tells me that they handle this all too often. 

Personal Possessions:

KNOW what you have in your wallet or purse.  Don’t carry so many credit cards that you forget what you’re carrying.  And DON’T carry your social security card.  Keep it in a safe place at home. 

Don’t leave your wallet or purse unattended!  Even if you are at work or at church or in a restaurant, it’s just not safe!  And never leave them in open view in your car, even if the doors are locked.

Before you throw documents away:

Be mindful of what you are discarding.  Pay stubs, bank statements, receipts, old billing statements, old copies of your credit report (!), pre-approved credit card offers…all of these are potential sources of information for ID thieves.  Shred these types of items before putting them in the trash.

Mail:

Pick up your mail on a timely basis.  Don’t let it sit in the mailbox where it can be stolen.  Also, if you’re going to be out of town for an extended period, call the Post Office and ask them to hold your mail for you.

Credit Reports:

Check your credit report at least once a year.  You are now entitled to one free annual credit report in the US.  Make use of it.  Make sure that the information in your report is accurate and does not contain fraudulent activity.  See Step One: Obtaining Your Credit Report.

If you are going on active duty, you can ask for an “Active Duty Alert” to be placed on your credit reports.  The alert remains on your file for 12 months and will keep you off the pre-screened credit offers for 2 years.  You only need to call one Credit Reporting Agency, as they are required to share the information with the other agencies.

You can also choose to limit the sharing of your information by companies by “opting-out”.  There are several ways to do this:

Step One: Obtaining Your Credit Report:

In the US, the Credit Reporting Agencies may also sell your name to marketing firms.  To “opt out” of the selling of your information for marketing purposes, you may: (1) go to www.optoutprescreen.com, (2) call 888.5OPTOUT (888.567.8688) , or (3) use the Letter to Opt Out of Personal Information Release provided in the Sample Letter Index.

You may also want to contact the Direct Marketing Association to remove your name from their mailing and telephone listings obtained from other sources.  See their site for more details.

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For Canadians, the only information that I’ve been able to find on “opting out” is to contact the Canadian Marketing Association.  See their site for more details.  Also, you may want to check the Office of the Privacy Commissioner of Canada site.  If you are aware of other options available, please let me know!

Avoid Scams.

One prevalent scam is the “Credit Repair Clinic”.  This hits close to home. (I’m not a scam, really!!)  These clinics will guarantee to remove negative information from your credit reports and charge you hundreds, sometimes thousands, of dollars.  In many cases, once you have paid them, they simply disappear with your money.  OR, you are paying someone to do what you could have done yourself…for FREE.

Read more on Credit Repair Clinics from the FTC.

Sadly, there are a large number of scams out there.  For more information on scams, please read the section “Hoaxes, Scams, Etc.

No matter what steps we take to avoid becoming a victim of Identity Theft, a determined thief may STILL steal your identity.  If you’ve been the victim of Identity Theft, it is imperative that you act quickly.  Due to the attention that’s been given to this topic, there is LOTS of help available.  The exact steps you should take will vary somewhat, depending upon how your information was misused; however, the following may help guide you:

Write it Down!

Keep a thorough record of all correspondence.  Send all letters by certified mail and keep copies of the originals.  Recovering from Identity Theft can be a long process, so you want to make sure you track your progress through each step.

Go immediately to the FTC site on Identity Theft.

While the FTC does not resolve individual consumer problems itself, they are a great resource in dealing with this situation, having articles and guidelines on recovering from Identity Theft.  Working with creditors and consumer advocates, they have also put together an “ID Theft Affidavit (PDF File)” to be used when new accounts have been opened in your name.

You can also file a complaint with the FTC:

• By using the online complaint form;
• By phone: 877.ID.THEFT (1-877-438-4338);
• In writing: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

Contact the Credit Reporting Agencies:

Ask that a “Fraud Alert” be placed on your Credit Report.  By placing an alert on your Credit Report, you are entitled to free copies of your credit report and, most importantly, businesses must verify your identity before issuing credit to you.  (Note: this can cause a delay if you’re trying to obtain credit.) 

There are two types of fraud alerts, an “initial” alert and an “extended” alert, that you can request. 

1.  An “initial” alert stays on your credit report for 90 days and entitles you to one free credit report from each of the Credit Reporting Agencies.

2.  An “extended” alert stays on your credit report for 7 years, entitles you to two free credit reports within 12 months from each of the Credit Reporting Agencies, and removes you from pre-screened credit offer marketing lists for 5 years.  To put this type of alert on your credit report, you will need to provide them with an “identity theft report”, which usually consists of a police report and additional information required by the credit reporting agencies.

About Identity Theft Reports

From the FTC:

An identity theft report may have two parts:

Part One is a copy of a report filed with a local, state, or federal law enforcement agency, like your local police department, your State Attorney General, the FBI, the U.S. Secret Service, the FTC, and the U.S. Postal Inspection Service. There is no federal law requiring a federal agency to take a report about identity theft; however, some state laws require local police departments to take reports. When you file a report, provide as much information as you can about the crime, including anything you know about the dates of the identity theft, the fraudulent accounts opened and the alleged identity thief.

Part Two of an identity theft report depends on the policies of the consumer reporting company and the information provider (the business that sent the information to the consumer reporting company). That is, they may ask you to provide information or documentation in addition to that included in the law enforcement report which is reasonably intended to verify your identity theft. They must make their request within 15 days of receiving your law enforcement report, or, if you already obtained an extended fraud alert on your credit report, the date you submit your request to the credit reporting company for information blocking. The consumer reporting company and information provider then have 15 more days to work with you to make sure your identity theft report contains everything they need. They are entitled to take five days to review any information you give them. For example, if you give them information 11 days after they request it, they do not have to make a final decision until 16 days after they asked you for that information. If you give them any information after the 15-day deadline, they can reject your identity theft report as incomplete; you will have to resubmit your identity theft report with the correct information.

You may find that most federal and state agencies, and some local police departments, offer only “automated” reports, reports that do not require a face-to-face meeting with a law enforcement officer. Automated reports may be submitted online, or by telephone or mail. If you have a choice, do not use an automated report. The reason? It’s more difficult for the consumer reporting company or information provider to verify the information. Unless you are asking a consumer reporting company to place an extended fraud alert on your credit report, you probably will have to provide additional information or documentation when you use an automated report.

Obtain Your Credit Reports

Obtain your credit reports and review them carefully.  Look for: inquiries from companies that you have not contacted, new accounts, debts you were unaware of.  Make sure that your name, social security number, address, and employers are correct.  If you find information that is incorrect, immediately alert the Credit Reporting Agencies.  See Disputing Entries on Your Credit Report. (Note: New accounts may take up to 6 months to show up on your credit report, so make sure you check again later!)

File a police report!

Report the incident to the police.  Though they may be unable to help you, you may need the report to convince creditors that an Identity Theft has occurred.  Apparently, it is sometimes difficult to get local or state police to file incident reports in the case of ID Theft.  If you are having trouble, visit the FTC’s ID Theft site for more tips on what you can do.

Contact your Creditors:

If you’ve had credit cards stolen, report them to the credit card companies immediately.

Bank accounts:

If your checks were stolen, contact your bank.  It may be best to close the account and reopen a new one.

Get a new ATM card with a new account number and password.

Stolen Mail:

If someone has changed your address with the post office or committed identity theft by mail, you may file a complaint with the US Postal Inspector:

• By using the online complaint form;
• By phone: 800.ASK.USPS (1-800-275-8777);
• In writing: Inspection Service Support Group, 222 S Riverside Plaza STE 1250, Chicago IL 60606-6100.

Investments:

If you believe that someone has tampered with your securities investments or a brokerage account, alert your broker and file a complaint with the Securities and Exchange Commission:

• By using the online complaint form;
• In writing: SEC Complaint Center, 100 F Street NE, Washington DC, 20549-0213.

Phone Service:

If someone has established new phone service in your name or is making unauthorized calls that seem to come from your number, call your service provider.  If you have trouble removing the fraudulent charges, you can contact your state’s Public Utility Commission or the Federal Communications Commission.

Employment:

If someone has used your social security number to obtain employment, report it to the Social Security Administration:

• By using the online complaint form;
• By phone: 800.269.0271;
• In writing: SSA Fraud Hotline, PO Box 17768, Baltimore MD, 21235.

Driver’s License:

If you believe that your social security number or name has been used to obtain a driver’s license or identification card fraudulently, contact your state’s Department of Motor Vehicles.

Bankruptcy:

If someone has filed for bankruptcy in your name, contact the US Trustee in the region where the bankrtupcy was filed.  A complete listing of the US Trustee’s regions can be found at www.usdoj.gov/ust.

Criminal records/arrests:

If someone has used your name and information when stopped by law enforcement and caused an arrest warrant to be filed in your name, you should contact an attorney immediately.

Passport Fraud:

If someone has ordered a passport in your name, you should notify the US State Department’s Passport Services Department:

• By using the online complaint form;
• By phone: 202.955.0430;
• In writing: U.S. Department of State, Passport Services, Consular Lost/Stolen Passport Section, 1111 19th Street, NW, Suite 500, Washington, DC 20036.

A recent study on identity theft by the center for identity management and information protection focused on identity theft offenders rather than victims, as in previous studies.  The purpose of the study, funded by the Dept of Justice, was to assist both public and private sectors in order to combat identity theft crimes.

The Secret Service cases (517 cases, 933 defendents) that were reviewed included only those where personal information was used to commit fraud.  “Personal information includes name, address, social security number, and date of birth, but excludes credit cards, debit cards, and other bank cards.” 

The results of the study included some interesting findings:

The Cases

• Most cases were from the northeastern United States
• About half of the defendents were sentenced to incarceration
• Median dollar loss was $31,356

The Offenders

• By Age:
• 42.5% were 25 to 34 years of age
• 33% were 35 to 49 years of age
• 18.5% were 18 to 24 years of age
• 6% were 50 years or older
• 53.8% were black, 38.3% were white, 4.8% were hispanic
• 1/3 were female, of which almost 2/3 were black
• 24.1% were born outside of the United States – the top 5 countries represented were Mexico, Nigeria, the UK, Cuba, and Israel
• 71% had no prior arrests
• The most common motivation was personal gain (obtain and use credit, procure cash, conceal actual identity, apply for auto loans)

The Crime

• Fraud was the leading crime committed by identity theft - larceny was the next most frequent
• 42.4% of the cases involved 2 to 45 offenders
• 50% of cases involved the use of the internet and/or other technological devices
• 20% of cases involved change of address forwarding and dumpster diving
• Of 274 cases, a business (service, retail, financial industry, corporation) was the point of compromise in 50% of the cases – a family member was the point of compromise in 16%
• 1/3 of the cases involved identity theft through employment – 43.8% were in the retail industry (stores, car dealerships, gas stations, casinos, restaurants, hotels, hospitals, doctors offices) and 20% were private corporations

The Victims

• 37.1% of the victims were financial industry organizations (banks, credit unions, credit card companies)
• 34.3% of the victims were individuals
• 21.3% of the victims were retail businesses (stores, car dealerships, gas stations, casinos, restaurants, hotels, hospitals, doctors offices)
• 59% of the individuals victimized did not know the offenders – 10.5% were customers or clients – 5% were family members
• 20.3% of the offenders committed identity theft at their place of employment – 59.7% in retail, 22.2% in the financial services industry

When corresponding with the Credit Bureaus, how much information should I provide?

The rule of thumb is to make the Credit Bureaus responsible for verifying credit entries; therefore, you don’t want to confirm negative entries for them. If you’ve been the victim of identity theft, though, you’ll want to tell them EVERYTHING. Use common sense.