Don't Lose Your Good Name
Chances are one in eight that someone has taken your identity for a test drive in the past five years, according to the federal government. In fact, according to the Federal Trade Commission Identity Theft Survey Report (September 2003), almost one in 20 Americans reported that their identity had been compromised in the past year. Also according to the report, individuals and companies lost more than $50 billion in the past year due to fraud and spent an average of 30 hours per person resolving their problems.
The high incidence rates of mail fraud, credit card scams, check washing at the bank and impersonation for criminal, non-financial means are just a few signs that identity theft is here to stay. The good news is that there are a few simple steps you can take to protect yourself from being taken for a ride.
The Federal Trade Commission's Identity Theft Web site outlines 9 basic methods of identity theft:
1. Stealing information from businesses or computers
2. "Dumpster diving" through personal or businesses' trash
3. Obtaining unauthorized credit reports
4. "Skimming" credit and debit card accounts and authorization numbers using high-tech information retrieval devices
5. Stealing wallets and purses
6. Stealing mail
7. Diverting mail by completing a change of address form
8. Stealing personal information from your home
9. "Phishing," or posing as an official representative of a company or government to gain confidential information from you
"We have been victims of identity theft on two separate occasions over the years," says Renee Cooperman* of Long Island, N.Y. "The first time, a woman stole our credit card information when we were at a restaurant on vacation in California. We realized something was wrong when we saw a charge for $2,000 worth of shoes at a store in Utah." Fortunately, the Coopermans contacted the credit card company and all of the credit reporting agencies immediately, and were able to get the charges removed with no penalty.
"The second time we were victimized, people were sending me checks for a charity event through the mail," Cooperman says. When the Coopermans realized they weren't receiving any mail addressed to Renee, they made some inquiries at the local post office. "We discovered that all my mail was being delivered to a Mailboxes Etc. address in the Bronx," she says. "Someone had filled out a change of address form and forged my signature."
Once they got everything straightened out, the Coopermans took action with their local post office, which prompted them to change their methods locally, requiring more strict confirmation for any changes.
Bank fraud is another very common occurrence. Back in 1998, I did a routine balance check on my bank account to discover that it had been emptied entirely. A quick call to the bank confirmed that a starter check that I had used to pay a bill years before had been "washed" – dipped in an acid solution to remove the ink – and reused to empty my account. After many phone calls, letters and threats to the bank, I was finally refunded the money and closed my account.
Kids Can Be Victims Too
While the majority of identity theft cases involve money, there are other ways people can misuse your identity. A criminal can falsely provide your information when questioned by legal authorities or take on a fake Social Security number for residency or employment purposes.
There have, in fact, been a number of cases where a child's identity is stolen to set up false documentation, according to Linda Foley, executive director of the Identity Theft Resource Center. "This is a growing problem, and families need to look into their children's reports as well as their own," she says.
Protect Your Family
There are a few simple precautions you can take to protect your family's assets and identity – without feeling paranoid every time you sign your name or throw out the trash.
1. Obtain a report from each of the three major credit reporting bureaus, which include:
2. Secure personal information in your home, especially if you have visitors, roommates or service personnel working unsupervised in your home.
3. Select secure passwords for any account tied to your personal information. Secure passwords do not contain your mother's maiden name, consecutive numbers, your birth date or a sequence from your Social Security number. A secure password should contain at least six digits and consist of a combination of numbers and letters.
4. Mail letters at the post office or in a locked mailbox and promptly remove incoming mail from your mailbox.
5. Protect your trash from dumpster divers by shredding personal information before discarding it in an unsecured trash bin.
6. Keep your wallet or purse locked up or in your possession at all times while at work.
7. Do not give any personal information over the phone, and keep a wary eye out for phone scams and phony offers through the mail.
8. Keep your Social Security number (SSN) as private as possible by keeping your card in a safe place at home, and using other identifying numbers wherever possible. "Our advice is to only give the SSN if it is absolutely necessary," says Jordana Beebe, communications director for the Privacy Rights Clearinghouse. "Folks need to be conscientious and question when their SSN is asked for."
9. Call 1-888-5-OPTOUT (1-888-567-8688) to opt out of pre-screened credit card offers. (They will ask for your SSN, and that may seem like a catch-22, but this is a case where it's OK to give that information, says Beebe. "The opt out number and the credit reporting bureaus are heavily regulated by the Federal Trade Commission," she says, so your number will be put to good use.)
If You Become a Victim...
Unfortunately, in identity theft cases, the burden of proving innocence rests on the shoulders of the victim. You will need to assert yourself when dealing with the defrauded agency or company, as well as the credit reporting agencies and any current or potential creditors.
The first step is to alert all three major credit reporting agencies listed above and place a fraud alert on your credit reports to keep thieves from opening any new accounts or creating any new activity in your name.
The next step is to review all of your reports immediately, and flag anything that appears suspicious. Report any fraudulent inquiries placed on your account, and request firmly and in writing that they be removed, stating the relevant details of your case. Then confirm that all of your personal information is correct. In the first year that fraud is detected, the FTC recommends that you check your credit reports periodically, then follow up with a routine check with each of the three major agencies once, if not twice, a year.
Close any fraudulent accounts or accounts that have been tampered with. Report any errors or fraudulent activity immediately and in writing.
Next, file a police report and report the event by calling the FTC's Identity Theft Hotline at 1-877-IDTHEFT (438-4338).
Last and most important, keep well-organized, written records of any communications and actions you take to set the records straight.
The bottom line is that no matter how carefully you protect yourself and your identity, "the reality is there is no way to protect yourself from ID theft," Foley says. "There are ways you can minimize the risk, but consumers and companies ultimately have a co-responsibility, and the companies need to cooperate as well."
The anonymity of the Internet is the biggest draw for potential scam artists, so it is up to you to carefully guard your personal information and be as wary of people and companies you come across on the Internet as you would those in a dark alley. As professional or helpful as a person or site may seem, it's not easy to discern friend from foe.
Here are some tips for safeguarding your identity when online:
- Keep your virus protection software and definitions up to date.
- Do not click on hyperlinks or files from an unknown sender. They may contain harmful viruses or install spyware or other harmful software that is difficult to remove.
- Steer clear of P2P (peer-to-peer) free file sharing sites and resident desktop applications, such as online wallets and local weather applications. Many of these sites maintain an open connection that in essence holds the door open for online spies, thieves and hackers to steal your information and file space, which potentially compromises the integrity of your files.
- Use a secure browser and consider investing in a firewall to protect your computer from unwanted intruders.
- Wipe your computer's memory clean before disposing of an old computer.
- Do not save passwords on your computer, especially a laptop or a computer that has more than one user.
- If any site or e-mail asks you to send personal information to confirm or update their records or offers you something in exchange for your SSN, passwords or other personal information, JUST SAY NO. "If it sounds too good to be true, it is," Foley says. "And don't give out your information to verify any information without checking with the company directly, the Better Business Bureau, the FTC or another consumer protection agency first."
*Name changed to protect privacy.