There is so much information floating around these days about identity theft. The first time I wrote or spoke about the topic was in 2007, and it remains a hot topic. This article will address some of the important basics you should know about what you can do to lessen the threat of identity theft and what to do if it happens to you.
Identity theft is the use of an individual’s personal identifying information, without their permission, to open new credit accounts, to use current credit accounts, to avoid arrest, or to obtain employment. More and more often, we hear news items about the exposure or theft of large volumes of personal data from databases maintained by credit card companies or other types of vendors. When a company that has stored your personal data is compromised, it is required to notify you and provide credit monitoring services for a specified period of time.
Sometimes, identity theft is noticed quickly by the victim, who then is able to take the necessary steps to stop the identity thief from continuing the spree. It is less frequent, but more newsworthy, when an identity thief scores a big haul and can have a devastating impact on someone’s credit and life in general.
You cannot make yourself invulnerable to identity theft unless you are living “off the grid”, but you can take reasonable steps to prevent it from happening. Most often, identity theft is committed by someone unknown to the victim. However, the second most likely class of perpetrator is a family member, friend, or coworker.
How to avoid identity theft:
- Vigilance in self-monitoring your financial accounts will take you a long way in detecting identity theft before it causes significant harm.
- One of the most important things to do is check your credit report regularly. You are entitled to one free credit report from each of the three major credit reporting agencies each year. Go to www.annualcreditreport.com to request your copies, but order one every 4 months so you can continually check on your credit status.
- When you use credit cards or an ATM in public, be aware of strangers standing near you and try to block their line of sight so they are unable to see your credit card or the PIN numbers you may be punching in.
- Keep credit card receipts and match them to your statements and pay attention to your bank statements. If you have online access to these accounts, check them frequently and immediately investigate any transactions you do not recognize.
- If you still receive paper statements via “snail” mail, be wary if you suddenly are not receiving your statements in mail (unless you requested electronic delivery). This could be an indication that an identity thief has changed the address on your account.
- Don’t leave documents containing your personal information lying around where just anyone can see it (home, office, etc.) When you no longer need paper receipts and statements, be sure to use a cross-cut shredder to dispose of them.
- Here’s a way to kill two birds with one stone. Those annoying preapproved credit card and insurance offers you get in your mailbox are not only a waste of paper, they can be used by identity thieves to obtain credit in your name. You can opt out of these offers for either five years, or permanently, by calling 1-888-5-OPT-OUT (1-888-567-8688) or go to www.optoutprescreen.com. This service is operated by the major consumer credit reporting agencies.
- Empty your wallet of credit cards, etc., that you don’t plan to use. DO NOT carry your social security card around with you. Keep it in a safe place, and only carry it when you need it.
- Do not give personal information if it is not necessary. Ask why it is needed, and request that some other code or identification number be used rather than your social security number.
- Use strong passwords on your sensitive computer files and on websites. Don’t write your password on a post-it note and leave it near your computer!
- Do not go to a website via a link sent to you in an unsolicited email.
What to do if your identity is compromised
- If you become a victim of identity theft, do file a police report. Also, contact one of the three major credit reporting companies (Experian, Equifax, and TransUnion) to place a fraud alert on your credit file. (You only need to contact one of the companies and the one you contact will pass the information on to the other two .) A fraud alert will remain on your file for 90 days, and you may need to extend that, so keep a record of when you initiated the fraud alert.
- Document any telephone calls, emails, letters, and other contacts you make as you work through the process of resolving the theft of your identity.
- You can request copies of documents used to open fraudulent accounts and perpetrate fraudulent transactions from the companies where these happened. These documents could provide clues to help you or law enforcement track down the identity thief.
There are many credit monitoring services available, but if you are diligent, you can self-monitor as explained above, and save yourself the money.
Go to www.ftc.gov for additional information and resources on fighting back against identity theft. Identity theft can be scary, but you can be prepared to prevent, detect, and deal with this violation, should it occur.
For more information on Sobel & Co., visit our website at www.sobel-cpa.com