Although most of us are familiar with the threat of identity theft, few of us are prepared or even know what to do in the event that our identities are stolen. According to the Federal Trade Commission, identity theft in some form is a crime that affects 9 million Americans a year. Even worse, 140,000 incidents of identity theft occur against children, with many more incidences not being detected until the child becomes an adult and needs his or her own credit card or loan.
As technology progresses, identity theft not only becomes more difficult to combat, but the face of identity theft changes and progresses as well.
Forms of Identity Theft
The most basic form of identity theft is probably the oldest and involves literally stealing a person’s identity. Decades ago, thieves could actually kill a person and assume their identity. Believe it or not, this still happens but isn’t as easy to get away with as it was before everyone had to carry and provide multiple forms of picture identification for a wide range of everyday activities. Other basic forms of identity theft involve just simply stealing a person’s wallet or purse. More advanced methods these days involve phishing which is usually a fake email message from a big company or bank which asks you to send your personal information.
Skimming occurs when special devices are used to steal credit and debit card numbers as a credit card is processing a legitimate payment. For instance, skimming has occurred recently in restaurants where employees have scanned customers’ cards into the device in order to use the information later. Gas stations have also fallen victim to the skimming method.
Regardless of the method or form of identity theft that the thief chooses to engage in, integral information that identifies consumers is stolen whether it is a credit card number, social security number or even just a name and address. This information is then used to open other accounts under your likeness, or may even be used as false information in other criminal cases. For example, when a person commits a crime and uses another person’s name and personal information. Eventually when the ticket isn’t paid or the person doesn’t show up for court, a warrant is issued in the name of the person whose identity was stolen. This mars an innocent person’s background and also creates problems when they are actually apprehended for a crime they have no knowledge of. Thieves have used other people’s identities for decades in order to acquire credit and bank accounts as well as take part in a variety of other nefarious activities.
The different forms of identity theft alone are enough to prove that it isn’t just the invention and popularity of the Internet which results in 9 million cases of identity theft per year. However with each year that passes, criminals find newer ways to scam trick and steal information from consumers in order to steal their identities.
How Do You Know Your Identity Has Been Stolen
Often times a person may not know for years that his or her identity has even been stolen. If you have no need for a new loan or credit, you may not find out until applying for a new car loan. Imagine going to the bank and finding out you have credit card and loan accounts on your credit report that you don’t recognize and never applied for.
Sometimes you may be contacted by creditors for payment and receive letters threatening to sue for debts you don’t recognize or have any knowledge of. This happens because thieves rarely pay the bills for the credit cards, loans and accounts they acquire. In the meantime, the creditor will be looking for their money…from you.
Other times you may be notified by a company if there has been a security breach. These instances don’t usually result in entire identities being stolen and are caught before any real damage can occur. A good example of this is the security breach that occurred earlier in the year with Sony PlayStation Network. During this unfortunate event, the personal account information for over 77 million accounts had been exposed. Although it cost Sony millions of dollars to correct and a loss of millions in revenue to repair, the problem was addressed before it could become a full blown identity theft dilemma, which could have been a lot worse for Sony PlayStation users.
What to Do If You Are a Victim of Identity Theft
If you are one of the 9 million annual victims of identity theft, you will want to move quickly in taking care of any damage that has resulted. First of all, your credit report is going to take a huge hit because of negative account reporting. Second, you will likely and understandably feel violated because a stranger has actually stolen something from you, albeit something you cannot actually touch. Unless you are the victim of an archaic thief which has killed you and is walking about pretending to be you, there are remedies.
How to Stop Identity Theft
File an Identity Theft Complaint with the FTC. This document will assist you in also receiving the Identity Theft Report which secures many of your legal rights as a victim of identity theft. Once this report is entered into the Identity Theft Data Clearinghouse, it assists law enforcement in tracking down and stopping identity thieves. This report also helps law enforcement track down identity thieves. Being included in the database also means you will be able to keep up to date on the process of your own case much easier.
File a police report as soon as you feel you are a victim of identity theft. This means whether your purse is stolen or your credit card number has been stolen online. A police report is important in the process because it provides the information needed to file an Identity Theft Report. Without the Identity Theft Report, you can lose many legal rights that are required in reporting the identity theft to the credit bureaus. There are also a number of uses for the Identity Theft Report including the ability to block fraudulent information permanently from your credit reports and bars collection agencies from being able to continue to harass you for payment of the fraudulent accounts. Besides the fact that if you need to request copies of the thief’s information such as the application completed for a credit card, you will need to have a copy of the police report. The entire process will be a good deal more difficult without one. You will need to take the Identity Theft Complaint that you filed with the FTC when you file the police report.
If you are notified by some other means than your credit report of the crime, you will want to make sure you request reports from all three credit bureaus. You should immediately contact all three credit bureaus and place alerts on your credit files. Once you have placed these alerts, you are entitled to a free credit report from each in which you can then scan for other accounts and instances of theft. Under the Fair Credit Reporting Act, both the credit bureau and the credit card company, bank or business that provided the information must correct any fraudulent information that is on your credit report. For each fraudulent account you will need to send a letter which states the information that is fraudulent and incorrect and a copy of the Identity Theft Report. This will seem to be a painstaking process, but the good news is the credit reporting agency must either block the fraudulent information on your report within 4 business days or let you know why they are not (for instances of fraudulent reporting of identity theft).
Close any fraudulent accounts. Although this probably goes without saying, you will need to contact the companies and close the accounts. It is in your best interest to send copies of evidence, your Identity Theft Report and Police Report by certified mail. Once the issue has been resolved, ask to receive notification by mail so that you have this documentation in the event that the account shows up on your credit report again or you are contacted in the future for payment of the account.
Place a Credit Freeze on Your Credit Report Files
This is optional and varies by state but you may want to place a credit freeze on your credit reports in order to prevent any new credit from being obtained. The credit freeze allows current creditors to continue to monitor your credit but new ones will not be able to access your credit reports and will thus not be inclined to approve credit for would-be identity thieves. In some states it’s free to identity theft victims to freeze their credit files, and in other states there is a small fee.
Most of the time if a company has had a security breach such as the one mentioned with Sony, you will not need to go through these steps. Most companies will offer you free credit monitoring which you will probably want to take advantage of to make sure nothing fraudulent comes up on your credit report. These kinds of breaches are usually handled by the companies themselves, mostly because it’s just bad publicity and bad form not to.
From the beginning to the end of these steps it is also recommended that you keep a journal or log of every person, company and account that you encounter and speak to. Any correspondence mailed should be sent certified return receipt requested. If anything, it will make things run a little smoother if you have all of your information in one place and help keep track of who you have contacted and which accounts have been resolved.
As a last resort, if for some reason you cannot resolve fraudulent accounts or your identity continues to be stolen, you may want to consider a new social security number. This is not only a last resort but sometimes not even effective as the credit bureaus may even combine the report from the messed up social security number with the new social security number into one anyway. If they don’t, you still have to deal with the issue of having absolutely nothing on a credit report of a brand new social security number.
How to Prevent Identity Theft
Ideally, we would like to stay ahead of the thieves and should attempt to prevent identity theft. Having to deal with it after the fact can sometimes be a frightening experience as well as a huge headache trying to clean up and restore our credit and identities back to normal.
The methods of preventing identity theft depend a great deal of course on the form of identity theft. In order to deter trash bin divers for instance, you will want to make sure you shred all documents before you toss them. This includes bank statements, credit card statements and preapproved credit card offers. In fact, shredding and destroying any paper that has personal information on it is a good practice to make a habit. For shredding, it is recommended that a cross shredder is used which shreds both ways. Believe it or not, trash bin diving identity thieves have been known to actually piece together information that has been shredded and a cross shredder makes this possibility a little less likely.
If you receive an email from a large company asking you for your password or other personal information and you aren’t sure, call the company. In phishing incidences, you may also be asked to click on a link which may take you to a site that looks like the real site. If you type the link into your address bar instead of clicking on it, you may be able to see that way if the link is legitimate also. Another good indication that an email is spam or phishing is if words are spelled incorrectly or the grammar seems off. Because of phishing being such a common threat, most companies will not email you when they need information but will instead contact you through another means.
Sometimes identity thieves will contact people via telephone and pretend to be legitimate companies that are asking for personal information. Legitimate companies will not call you and ask you for personal information. If it is a company you actually do business with, they have no reason to call and ask you for your account number. One of the most popular theft scams involved calling people and telling them they won a lottery for a large amount of money and only needed to provide bank account information to receive it. Never give out credit card numbers
Having strong passwords for your accounts online is probably the most important and most effective way of preventing identity theft from occurring online. Make sure you choose strong passwords that include letters and numbers and are not easily figured out. Also refrain from using the same password on every site and every account. Consider the problems you would have if a thief figured out your password and suddenly had access to everything online. It is also equally important to keep spyware and virus protection software up to date to protect your computer from problems occurring with your computer as well as personal information being stolen. When you make purchases online you will want to make sure the website you are purchasing from is a secure site. If the site in the address bar starts with “https” the information you send will be encrypted. Also look for privacy policies on the sites that you shop from and if you are not sure, you should be able to contact the retailer and ask.
Review Your Credit Report Annually
It is important to check your credit reports regularly to make sure there isn’t anything odd or fraudulent being added. This is also an important step in finding and reporting errors to your credit report. It has been reported that nearly 80% of credit reports have some kind of error so it is wise to continuously check up on the credit bureaus. All consumers are entitled to at least one free credit report per year, so there isn’t any reason to not check those reports at least yearly.
Credit Monitoring Services
There are a number of legitimate companies which provide credit monitoring services. This service notifies consumers anytime something changes on their credit report allowing for almost immediate notification of new accounts or at least as soon as they report. Credit monitoring services save consumers a great deal of time in correcting fraudulent situations because of the ability to notify so quickly. Without the service, it could be years before a consumer may become aware of new accounts on their credit reports and by that time, the thieves are usually long gone having stopped paying the accounts and ditching them for the victim to deal with.
Sometimes no matter how careful one is, criminals will find a way to get the information they are looking for. Being aware and careful are the most important steps for victims recovering from identity theft and those who take measures to prevent it and maybe stay a little bit further ahead of the identity thieves.