Protect yourself from identity theft

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Nearly 45 billion dollars were stolen from identity theft victims in 2020. LifeLock

Identity theft is one of the fastest growing financial crimes in America. Each year, millions of Americans discover that a criminal has fraudulently used their personal information to obtain goods and services and that they have become victims of identity theft.

A wide range of sensitive personal information can be used to commit identity theft, including a person’s name, address, date of birth, Social Security number (SSN), driver’s license number, credit card and bank account numbers, and phone numbers.

Once identity thieves have your personal information, they can drain your bank account, run up charges on your credit cards, open new utility accounts, or get medical treatment on your health insurance. An identity thief can file a tax refund in your name and get your refund. In some extreme cases, a thief might even give your name to the police during an arrest.

The most common form of identity theft involves the fraudulent use of a victim’s personal information for financial gain. According to the Federal Trade Commission’s Guide for Assisting Identity Theft Victims, there are two main types of financial frauds:

Using the victim’s existing credit, bank, or other accounts

  • A victim of existing account misuse often can resolve problems directly with the financial institution, which will consider the victim’s prior relationship with the institution and the victim’s typical spending and payment patterns.

Opening new accounts in the victim’s name

  • A victim of new account identity theft usually has no preexisting relationship with the creditor to help prove she is not responsible for the debts.
  • The new account usually is reported to one or more credit reporting agencies (CRA), where it then appears on the victim’s credit report. Since the thief does not pay the bills, the account goes to collections and appears as a bad debt on the victim’s credit report. Often, the victim does not discover the existence of the account until it is in collection.
  • The victim must prove to the creditor that she is not responsible for the account and clear the bad debt information from her credit report.

The primary tool for preventing criminals from opening additional new accounts in your name are to implement a fraud alert and credit freeze. In most cases, you should place an initial fraud alert on your credit report as quickly as possible after discovering that you have become an identity theft victim, or you realize that your sensitive personal information has been stolen. Once you implemented a fraud alert, you will have some time to consider whether to place an extended fraud alert or a credit freeze on your credit report. You also will be able to obtain a free credit report and review the report to see if it shows that there has been additional fraud by the criminal.

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To prevent identity theft, it is critical to keep your personal information safe:

  • Shred financial documents and paperwork with personal information before you discard them.
  • Protect your Social Security number. Don’t carry your Social Security card in your wallet or write your Social Security number on a check. Provide it only when absolutely necessary. You may always ask to use another identifier.
  • Don’t provide personal information over the phone, through the mail, or over the Internet unless the party is known and reputable.
  • Never click on links sent in unsolicited e-mail messages.
  • Use firewalls, anti-spyware, and anti-virus software to protect your personal computer. Keep the protections up-to-date. Visit OnGuardOnline.gov for more information.
  • Don’t use an obvious password like your birth date, your mother’s maiden name, the last four digits of your Social Security number, or your phone number.
  • Keep all personal information in a secure place at home, especially if you have roommates or employ outside help.

Monitor your financial information regularly and request a free copy of your credit report annually. Review various financial accounts and statements, checking for the following:

  • Purchases that were not made by you
  • Bills that do not arrive as expected
  • Unexpected credit cards or account statements
  • Denials of credit for no apparent reason
  • Calls or letters about purchases you did not make

If identity theft is suspected, act quickly!

Identity theft victims have the right to block the reporting of information that resulted from identity theft. Credit reporting agencies (CRAs) are responsible for blocking fraudulent information from appearing in victims’ credit reports, but also to notify furnishers (creditors, debt collectors, and other companies that reported the information).

As the victim, you must provide the CRAs with the following information in writing:

  • a copy of an Identity Theft Report (filed with law enforcement). The Identity Theft Report is the primary tool for removing inaccurate identity theft-related information from your credit report.
  • a letter explaining what information is fraudulent as a result of identity theft
  • the letter should state that the information does not relate to any transaction that the consumer made or authorized
  • proof of identity, which may include the consumer’s Social Security number, name, address, and other personal information requested by the CRA

In summary, identity theft happens when someone steals your personal information to commit fraud. The criminals may use your information to apply for credit, file taxes, or get medical services. These acts can damage your credit status, and cost you time and money to restore your good name.

To Prevent Identity Theft

According to USA.gov, you should keep these tips in mind to protect yourself from identity theft:

  • Secure your Social Security number (SSN). Don’t carry your Social Security card in your wallet. Only give out your SSN when necessary.
  • Don’t share personal information (birthdate, Social Security number, or bank account number) because someone asks for it.
  • Collect mail every day. Place a hold on your mail when you are away from home for several days.
  • Pay attention to your billing cycles. If bills or financial statements are late, contact the sender.
  • Use the security features that can help protect the device and the information on it from threats and vulnerabilities on your mobile phone.
  • Update sharing and firewall settings that analyzes and blocks or allows information traveling between the internet and your computer based on a defined set of security rules.
  • Use a virtual private network (VPN) if you use a public wi-fi network A Virtual Private Network (VPN): a private network that connects your computer or mobile device to the internet and encrypts (codes) your information to protect your internet activity from monitoring or spying.
  • Review your credit card and bank account statements. Compare receipts with account statements. Watch for unauthorized transactions.
  • Shred receipts, credit offers, account statements, and expired credit cards. This can prevent “dumpster divers” from getting your personal information.
  • Store personal information in a safe and secure place.
  • Install firewalls and virus-detection software to prevent, detect, and remove malicious programs that have been placed on your computer to spy on you or to do damage to your computer.
  • Create complex passwords that identity thieves cannot guess. Change your passwords if a company that you do business with has a breach of its databases
  • Review your credit reports will show your bill payment history, current debt, and other financial information once a year. Be certain that they don’t include accounts that you have not opened. You can order it for free from Annualcreditreport.com.
  • Freeze your credit files with Equifax, Experian, Innovis, TransUnion, and the National Consumer Telecommunications and Utilities Exchange for free. Credit freezes prevent someone from applying for and getting approval for a credit account or utility services in your name.

You have limited liability for fraudulent debts caused by identity theft.

  • Under most state laws, you’re not responsible for any debt incurred on fraudulent new accounts opened in your name without your permission.
  • Under federal law, the amount you have to pay for unauthorized use of your credit card is limited to $50. If you report the loss to the credit card company before your credit card is used by a thief, you aren’t responsible for any unauthorized charges.
  • If your ATM or debit card is lost or stolen, you can limit your liability by reporting the loss immediately to your bank or credit union.
  • If someone makes unauthorized debits to your bank or credit union account using your debit card number (not your card), you aren’t responsible – if you report the problem within 60 days after they send your account statement showing the unauthorized debits.
  • Most state laws limit your liability for fraudulent checks issued on your bank or credit union account if you notify the bank or credit union promptly.

References:

  1. https://www.identitytheft.gov/#/
  2. https://www.consumer.ftc.gov/articles/pdf-0119-guide-assisting-id-theft-victims.pdf
  3. https://www.usa.gov/identity-theft
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