PREVENTING IDENTITY THEFT:
What Is Identity Theft?
Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.
Facts & Figures
According to the U.S. Postal Service, over 8,000,000 U.S. residents were victims of identity theft in 2006. That represents about 4% of adults. The average victim spent $531 repairing the damage done by an identity thief. This includes costs such as postage for certified mail letters to creditors and credit bureaus, photocopying, and legal fees. It took 25 hours, on average, for a victim to clear up his or her situation. The total cost of identity theft in the U.S. in 2006 was $49 billion. Victims paid about $4.5 billion of this, and the rest was paid by merchants and financial institutions. Because consumers ultimately pay the business costs through higher prices for goods and services, we all pay for identity theft.
How Identity Theft Occurs:
Here's a sample of the way identity thieves commit their crimes.
- File a change of address form in your name to divert mail and gather personal and financial data
- Steal credit card payments and other outgoing mail from private, curbside mailboxes
- Lift driver’s license numbers, Social Security numbers, phone numbers, or other identifiers from checks
- Steal mail, especially envelopes containing bill payments, from unlocked, unguarded, "out boxes" at work
- Go "dumpster diving" by digging through garbage cans or communal dumpsters in search of cancelled checks, credit card and bank statements, or preapproved credit card offers
- Steal discarded applications for preapproved credit cards and fill them out with a different address
- Steal wallets and purses—and all the credit and identification cards inside them
- Take important documents such as birth certificates, passports, copies of tax returns and the like during a burglary of your house
- Steal Social Security cards
- Steal the Social Security numbers and identities of children who are especially vulnerable because they don’t have credit histories and it may be many years before the theft is discovered
- Lift names and Social Security numbers from such documents as a driver’s license, employee badge, student ID card, check, or medical chart
- Use personal information from a Who’s Who book or a newspaper article
- Use the personal information of a relative or someone he or she knows well, perhaps by being a frequent visitor to their home
- Pretend to be government officials or legitimate business people who need to gather personal information from credit reporting agencies or other sources
- Hack into a computer that contains your personal records and steal the data
- Buy records stolen by a fellow employee who’s been bribed
- "Shoulder surf" by watching from a nearby location as he or she punches in a telephone calling card number or listens in on a conversation in which the victim provides a credit card number over the telephone in a public place
- Use the camera in a cell phone to photograph someone’s credit card or ATM card while he or she is using an ATM machine or buying something in a store
- “Phish” by sending a legitimate-looking email that directs you to a phony website that looks legitimate and asks for your personal and financial data
- “Pharm,” a tactic by which criminals “hijack” whole domains to their own sites and gather the personal and financial data of users who believe they’re communicating through their customary service provider
- Send fraudulent spam emails that promise huge prizes or bargains in return for personal and financial information
- "Skim," in which a dishonest merchant secretly copies the magnetic strip on the back of your credit or debit card in order to make a counterfeit card that can then be sold
- Send a fake electronic IRS form to gather personal information and financial data
(Note: The IRS never requests information by email.)
Identity thieves may steal the Social Security numbers and identities of children who are especially vulnerable because they don’t already have credit histories and it may be many years before the theft is discovered.
If you’re the victim of identity theft, you’ve got your work cut out for you. Not only will you have to cope with the emotional toll of being a victim of crime, but it will take all the effort you can muster to repair the damage done to your good name and credit. Here’s where to start.
Contact the Credit Reporting Agencies
As soon as you know your identity has been stolen, call one of the three major credit reporting agencies. The law requires the agency you call to contact the other two. The agencies will flag your account; this means that any business that wants to view your credit report to give you credit will first have to verify your identity. Upon request, the three agencies will then send you two free reports over the next 12 months.
The Fair and Accurate Credit Transactions Act requires the three major credit reporting agencies to provide you with a free report once a year regardless of whether you’ve been a victim of fraud, but you must request them from www.annualcreditreport.com or 877-322-8228.) The three major credit reporting agencies and their toll-free numbers for reporting fraud are listed below.
Work With Your Creditors:
If you discover unauthorized charges on your credit report or any billing statement, contact the fraud department of the creditors you believe have been robbed in your name. You have 60 days from the date you normally receive your bill to notify them. If you notify your creditors within this time frame, your loss for unauthorized charges will be limited to $50.
Check Your Bank Accounts
If someone is illegally using your bank account, close the account right away and ask your bank to notify its check verification service. The service will notify retailers not to honor checks written on this account. In most cases, the bank is responsible for any losses. To find out whether someone is passing bad checks in your name, call the Shared Check Authorization Network at 800-262-7771.
If you think someone has opened a new checking account in your name, you can ask for a free copy of your consumer report from Chex Systems (800-428-9623, www.chexhelp.com), the consumer reporting service used by many banks. If your bank doesn’t use Chex Systems, ask for the name and number of the consumer reporting service it uses.
Call the Police
As soon as you can, contact your local police or sheriff’s department. The police should take your report and give you a copy, or at least the number of the report. You should also consider reporting the crime to your state law enforcement, since many states have recently toughened their laws against identity theft. You will need a police report to pursue your case with creditors who have been victimized in your name. You may also want to contact the office of your state attorney general for consumer fraud information. For a list of state attorneys general, go to www.naag.org.
Be sure to give the police copies of all the documents that support your claim. You may want to provide them with a notarized copy of the Federal Trade Commission’s ID Theft Affidavit, available from www.consumer.gov/idtheft.
Because an identity is frequently stolen in one place and used in another, you may also have to contact the police in the place where the crime took place. Your local law enforcement or the creditors affected can tell you if this is the case.
The federal Identity Theft and Assumption Deterrence Act of 1998 (18 U.S.C. Section 1028) makes it a federal crime when anyone "knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law."
Other Numbers To Call
- Call the Social Security Administration’s Fraud Hotline at 800-269-0271 if your Social Security number has been stolen.
- Call the U.S. Postal Inspection Service if you suspect that a thief has used your mailing address to commit a crime. Call 888-877-7644 for the number of your local office.
- Call the Internal Revenue Service at 800-829-0433 if you believe your identification has been used in violation of tax laws.
- The Secret Service is responsible for investigating financial fraud, but it doesn’t investigate individual crimes unless a large amount of money is involved or a ring of thieves is operating. For more information, go to www.treas.gov/usss.
- Report your case to the Federal Trade Commission, which maintains a database that law enforcement agencies use to hunt down identity thieves. To report your theft or to get more information on what to do, call the FTC's toll-free hotline at 877-IDTHEFT.
Tips for Reporting Identity Theft
- Act as soon as you discover the theft. Time is of the essence to prevent further fraud or damage to your credit, and acting quickly may be necessary to protect your rights.
- Keep a record of all conversations with name, agency, phone number, date, and time.
- Keep copies of all emails.
- Never mail originals. Always send out copies, notarized if necessary.
- Use the Federal Trade Commission’s ID Theft Affidavit (see page 11) and get it notarized.
- Always use certified mail, return receipt requested, so that you have a record of who received your mail and when.
- Above all, be persistent. It can take time and effort to clean up the mess left behind by the criminal who stole your identity, but only you can do the job.
So far, we have discussed what you can do to protect yourself against identity theft.
Below, are some suggestions to help you and your family protect yourselves against this type of crime:
1.
Do not give out personal information over the phone, through the mail, or over the Internet unless you have initiated the contact or know whom you're dealing with. Identity thieves will pose as bank representatives, Internet service providers, and even government officials to get you to reveal identifying information.
2.
Shred all documents, including pre-approved credit applications received in your name, insurance forms, bank checks and statements you are discarding, and other financial information.
3.
Do not use your mother's maiden name, your birth date, the last four digits of your social security number, or a similar series of numbers as a password for anything.
4.
Do not put your social security number on your checks or your credit receipts. If a business requests your social security number, give them an alternate number and explain why. If a government agency requests your social security number, there must be a privacy notice accompanying the request.
5.
Be careful using ATMs and phone cards. Someone may look over your shoulder and get your PIN numbers, thereby gaining access to your accounts.
6.
Make a list of all your credit card account numbers and bank account numbers with customer service phone numbers and keep it in a safe place.
7.
When you order new credit cards in the mail or previous ones have expired, watch the calendar to make sure you get the card within the appropriate time. If the card is not received within that time, call the credit card grantor immediately to find out if the card has been sent. If you don't receive the card, check to make sure a change of address was not filed.
8.
Do not put your credit card number on the Internet unless it is encrypted on a secured site. Pay attention to your billing cycles. Follow up with creditors if bills don't arrive on time. A missing credit card bill could mean an identity thief has taken over your credit card account and changed your billing address.
Cancel all credit cards that you have not used in the last six months. Open credit is a prime target.
9.
Order your credit report at least twice a year. Reports should be obtained from all three major sources: Equifax at 800-685-1111; Experian at 888-EXPERIAN (397-3742); or TransUnion at 800-680-7293.
Correct all mistakes on your credit report in writing. Send the letters return receipt requested. Identify the problems item by item and send with a copy of the credit report back to the credit reporting agency. You should hear from the agency within 30 days.
10.
Write to Direct Marketing Association, Mail Preference Service, PO Box 9008, Farmingdale, NY 11735 to get your name off direct mail lists.
The Federal Trade Commission,
www.consumer.gov/idtheft
The Office for Victims of Crime at the U.S. Department of Justice,
ovc.ncjrs.org/findvictimservices/
The U.S. Department of Justice,
www.usdoj.gov/criminal/fraud/idtheft.html
The National Criminal Justice Referral Service,
www.ncjrs.org/spotlight/identity_theft/facts.html
The Identity Theft Resource Center,
www.idtheftcenter.org
The National Crime Prevention Council’s website.
Go to www.ncpc.org,
click on "What We Offer," go to "What You Can Do," and
click on "Protect Yourself Against Identity Theft."
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