When times get tough most of us clip coupons, take on second job, and lean on friends and family. Some, however, turn to crime. And in our digital age, that crime is less likely to be petty robbery and more likely to be identity theft. Reports of identity theft jumped up 50 percent in 2008, according to the Federal Trade Commission (FTC), which adds that ID theft is the fastest growing crime in the nation. The FTC estimates that as many as 9 million Americans fall victim to some kind of identity theft every year. What can you do to prevent identity theft? And what should you do if you’re a victim?
How Identity Theft Happens
The first step to avoid becoming an identity theft victim is to understand how criminals steal identities in the first place. Although creditors, credit bureaus, and law enforcement are continually making identity theft more difficult, it’s still possible for ID thieves to get their hands on your information and ruin your good name. They do this in one of several ways:
- Physically stealing your wallet
- Enticing you to provide personal information via the phone or online “phishing”
- Hacking unsecure Websites that contain personal information
- Hacking Web servers that contain bulk bankcard data
- “Skimming” bankcard data from legitimate looking ATM and credit card terminals
How to Protect Yourself from Identity Theft
Obviously, losing your wallet is a traumatic event. But as you struggle to figure out where it went and panic about how to pay your way home, do not forget to immediately contact all of your credit card and debit card banks to report your cards stolen. That’s why it’s a good idea to only carry the credit cards you need and to keep their 800 numbers in a separate location like in a Web-based email account.
But you don’t have to lose your wallet to fall victim to identity theft. You also must be extremely careful about how you disclose sensitive information like credit card or checking account numbers and your social security number, which can be used to open new credit lines in your name. Never provide this information online unless you are on a Website you trust that displays a secure connection, marked by a URL beginning with “https://”. Finally, never ever click an email that asks for personal information. Legitimate banks will never ask you for this info via email.
Despite your best efforts, there are still times when thieves may get your information anyway. Hackers sometimes steal millions of credit card numbers from retailers’ servers and some even install machines that steal your credit card number when you think you’re using a legitimate ATM or credit card terminal. That’s why it’s important to double-check every statement for purchases you did not make.
Finally, you may want to consider enrolling in an identity theft protection service. For about $9 a month, these services will alert you to any suspected ID theft attempts and, best of all, resolve any problems caused by successful identity theft. Although not for everybody, it’s a small price to pay if you have excellent credit and healthy bank accounts to protect.
What to Do If Your Identity is Stolen
Moment of panic: You check your credit card statement and see a charge you didn’t make. Or, even worse, you check your credit report and discover a credit card that you never opened and that has not been paid…your credit is ruined! What do you do?
First, immediately contact the credit card company to report the problem. If the activity is simply fraudulent purchases on an account you do own, they’ll cancel your current account number and issue you a new one. If, however, somebody opened an account in your name, the process will take longer. You’ll have to take extensive steps to prove your identity to the credit card company. After an investigation they will close the account and hopefully remove the balance you owe. If not, however, you may need legal help (and need to go to court) to fight the fraudulent account.
After you have contacted the creditors about the fraudulent accounts, contact all three credit bureaus and place a fraud alert on your account:
- TransUnion: 800/680-7289; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790
- Equifax: 800/525-6285; P.O. Box 740241, Atlanta, GA 30374-0241
- Experian: 888/EXPERIAN (397-3742); P.O. Box 9532, Allen, TX 75013
An initial fraud alert lasts 90 days and a permanent fraud alert lasts for 7 years. During that time creditors will be required to extensively verify your identity before opening new credit accounts in your name. Note: Although these alerts are helpful in preventing new cases of identity theft, they may make it difficult to obtain new credit legitimately especially if you move or change jobs, as your address and employer are often used as information that verify your identity.
Finally, contact your local police department and the FTC to report the identity theft. The FTC has an online complaint form or you can call: 877/ID-THEFT (438-4338).
If you have difficulty closing fraudulent accounts and/or repairing your credit report after the identity theft, you may also need to contact an attorney experienced in handling identity theft matters. If you were enrolled in an identity theft protection service at the time of the theft, your service should complete all of these steps for you.
Have you been the victim of identity theft? What happened? What did you have to do to take?