Identity Theft Crisis

Imagine this scene: You’re opening your bills, only to find one of your credit card account balances with an over-due five-digit charge. You know you didn’t make that purchase, so you refuse to pay for it. A few months later, you decide to buy a new car, so you submit a loan application to the car dealer. You get a phone call that afternoon with the bad news, “I’m sorry, Ms. Jones, but we are not able to extend credit to you at this time.” When you ask why, they tell you that your credit report indicated you’re in debt way over your ability to pay. Bummer! You’ve become a victim of identity theft.

Now imagine this: You finally order that credit report, like you’ve been meaning to do for years. When you get it, you learn that you own a house you don’t know about and you have credit card balances at three different stores you’ve never even heard of. Someone has stolen your identity to make their life richer! How did the identity theft happen? And what can you do about it?

There are many ways an identity thief can get your personal information to build a mountain of debt that creditors expect you to pay. Maybe they got hold of your name, address, and social security number by going through your garbage one night. Or perhaps you gave them the information when “their representative” contacted you to verify some details on your account. Or maybe they’re a computer hacker that figured out how to get your credit card numbers when you made a purchase at the local boutique. They may even have gotten your information by pretending to be you (or someone in your family) when they contacted your bank or service company. The worst-case scenario is when someone uses your social security number and then goes out and commits criminal acts. Ever seen the inside of a police station or jail? You could! There are a multitude of ways to become a victim of identity theft!

Identity theft and fraudulent use of personal financial records is a growing problem all over the world. In 2004, the U.S. Federal Trade Commission conducted a study that indicated over 9 million people are victims of identity theft every year. A 2003 study conducted in the United Kingdom suggested that 20% of all consumers had been subject to identity theft. Clearly, in the English-speaking world, identity theft is an ever-greater threat to your personal and financial well-being.

How Can I Prevent Having my Identity Stolen?

Here are some tips on things you can do (or not do) to guard your personal financial information, prevent identity theft, and protect your good credit rating.

- Always take your receipts with you after you’ve made a purchase. Leaving the receipt at the ATM or gas station is an open invitation for identity thieves.

- Maintain good files and records of your financial transactions. Know what you’ve purchased, when, and from whom. Store your old account statements in a safe place. And be sure to shred any papers with personal information before you throw it away.

- The FBI recently reported that a third of identity theft victims admitted the thief was a co-worker or friend. Be careful not to leave personal information out in the open on your desk or in your home office. And don’t ask anyone else to hold your personal papers for you. In this case, most of the identity theft suspects were well aware of their victim’s habits and lifestyle.

- Carefully guard your User IDs and passwords for online accounts. When you create them, don’t go for the easy-to-remember. People who know you may be able to guess simple, straightforward user IDs and passwords. And don’t write your passwords down or keep them where someone can get to them. If you store them electronically, make sure the files are protected.

- Get and keep regular copies of your credit reports and account statements. Use one or all of the three major agencies (Experian, TransUnion, or Equifax) to get your credit report. Don’t depend on less reputable reporting agencies.

- Opt out of mailing lists whenever you can, and ask telemarketers to “take your name off their list.” By law, they can’t call you again for a year. If you have any doubts, check with your bank and credit accounts to find out what they do with your personal information and what you need to do to better protect it.

- Don’t have printed or write your social security number on your checks. Might as well send it up a flag. Some states still use social security numbers for drivers licenses, but they are changing. Check with your DMV to see if you can have your drivers license changed to remove your social security number.

- Don’t keep a written list of your bank or other account numbers where they might be seen by someone else. Keep lists of this type of information under lock and key.

- Do not respond to and delete any e-mails that ask for an account number or other personal information. Stop internet and snail-mail credit card offers. Install firewall and anti-spyware on your computer for additional protection. If your computer has the feature, register your fingerprint as an additional safety feature.

- Purchase new checks from the bank, not a discount service. And rather than having your full name printed on the checks, use your initial.

- Do not carry PINs in your wallet or purse, and never give them out over the phone.

What If I’m Already a Victim?

If you think someone else is using your identity or personal financial information inappropriately, contact the nearest office of the U.S. Department of Justice. Contact your creditors to alert them to the fraud. Also inform your bank of the activity and secure their agreement to help protect your information. You may want to revisit the names of people authorized to access your personal financial information and limit it to essential parties only. Find out as much as you can about the accounts, purchases, and applications the identity thief has made using your name. Then contact those companies directly and immediately to make sure they close the accounts and notify law enforcement when they become aware of any additional transactions.

Immediately notify the credit reporting agency and creditors if you see suspicious activity or if you find errors like a closed account that shows as open or a paid-off balance that appears to be outstanding. You may have to provide documentation to support corrections, and you may have to make the same contact several times to assure the correction is made. But be persistent. Your credit report is a direct reflection of your financial dealings. Creditors and credit report agencies are obligated to report correct information.

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Identity theft crimes are not new, but they have become more persuasive in the past decade. In mid-2005, San Francisco Chronicle discovered that holders of more than 40 million credit cards were vulnerable to financial fraud because identity thieves had compromised their credit card information. Earlier that year, information and data broker, Reed Elsevier Group PLC, revealed that several hundred thousand people might have had their profiles stolen from one of its U.S. databases. One quickly learns to secure their computer networks so that these kinds of attacks, or leaks are non-existant.

Information compromised included names, age, physical descriptions, mailing addresses, Social Security, and driver license numbers. This is virtually everything an impersonator needs to set up a clone of the identity theft victim, enabling him to make a number of financial and personal transactions in the victim’s name. Usually an identity theft victim is usually under age forty, while about 11 percent of victims are age sixty or older. According to Federal Trade Commission (FTC), one in six identity theft victims said that thieves used their personal information to open at least one new account, such as credit card accounts or loan accounts, to rack up debts on existing accounts. The most recent data indicates that 9.3 million Americans (or 4.25% of all adults) are victims of ID theft on an annual basis. This is an alarming rate and should show you that you NEED to take preventative steps toward protecting your identity.

An identity theft victim risks the destruction of his/her good credit history, and may spend years, and large sums of money restoring the credit history and goodwill. There are instances of an identity theft victim been denied work or insurance or been detained for crimes he did not commit! Some victims of ID theft found that their names have been misused after police stopped them for a traffic violation and discovered that there is a warrant for their arrest. There are also times when an innocent person receives a summons to appear in court to answer for a criminal act. FTC’s latest survey shows ID theft losses to businesses and financial institutions total $52.6 billion annually. Recently, Federal Trade Commission launched a website annualcreditreport where all consumers are eligible for a free copy of their credit reports. Take the time to go to that site and get your free credit report. This can be a step to alerting you to suspicious activity.

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