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Identity theft is a growing concern in the United States. The U.S. Federal Trade Commission has estimated that over 9 million Americans become victims of identity theft each year, with a cost to consumers approximating $15 billion. Since identity theft often occurs in the shadows of cyberspace and consumers usually do not learn of the crime until serious damage has already occurred to their credit rating, it is important to minimize consumer exposure to the risk of id theft. While it’s nearly impossible to prevent id theft, you can take important steps to minimize your risk.
Credit Reporting Agencies
File a Complaint with the FTC
Identity theft: What does it mean?
Identity theft takes place when someone steals pertinent personal data about you, and subsequently uses that information for personal gain. This personal data usually takes the form of a social security number, some cancelled checks, a driver’s license number, a birth date, a consumer’s address of record, or a credit card/credit card statement.
An identity thief might steal this information either in the conventional fashion (by taking a wallet or purse), or may take it by rummaging through dumpsters and trash cans. Diversion of business establishment receipts is also a fairly common form of id theft and a growing problem. There are serious repercussions to identity theft that consumers need to be aware of.
An identity thief will use personal information in many ways; one of the more common ways that a thief diverts personal information for criminal purposes is by opening a new line of credit in a consumer’s name to commit credit card fraud.
Credit Card Fraud: Opening new credit card accounts in a consumer’s name
Identity thieves use stolen personal information to order new credit cards in an id theft victim’s name and in the process change their billing address. The thief will run up expenses on those credit card accounts, leaving consumers with the bill. Victims of this crime are left with hundreds, even thousands of dollars in bad debt on their credit card accounts, and usually do not discover the error for a few months because the billing address has been changed. Fortunately, consumers aren’t liable but for $50 dollars of fraudulent debt per credit card.
Generally, identity theft victims are never aware of any accumulated bad debt until collection agencies begin to contact them about the past due accounts in their name. This outstanding debt already will have tarnished the victims’ credit rating by the time they are made aware of the incursion.
Financial Crimes / Bank Fraud: Opening new lines of credit at banks
Identity thieves are astute at opening new lines of credit at banks in an identity theft victim’s name. Thieves can use stolen personal information to open new checking accounts. The identity thief will write numerous bad checks on the account, and the victim will not become aware of the fraud until after the thief has written several bad checks on the account. Although this has become increasingly difficult given electronic check processing equipment prevalent today, it is still a common practice of identity thieves.
An identity thief typically creates copies of ATM cards by magnetically swiping the information encoded on the card. The thief will then copy that magnetic information onto another card and use that card to withdraw money or make purchases with a stolen personal identification number, or PIN.
Document Fraud: Getting a new driver’s license / Social Security card
Identity thieves can divert personal information in a variety of ways to create copies of personal documents. They may use personal information to acquire copies of a driver’s license or birth certificate. A thief may use a victim’s personal information to get a social security number to file for social security benefits. Victims may find that their driver’s license has been reissued with a thief’s name and photograph on the license.
Cell Phone Fraud, Utilities Fraud, and other types of fraud
An identity thief will use a victim’s personal information to acquire wireless accounts, and charge calls to the accounts. Identity thieves can order a great variety of services including electric, cable, and gas, all in the victim’s name. Criminals can go so far as to get a job, rent an apartment or house, or even get medical services at a hospital or doctor’s office, all using another person’s name.
How do I know if I am an identity theft victim?
You will know you are a victim of identity theft when creditors contact you about debts you never incurred. You may find out that you are a victim of identity theft when you are turned down for a car loan or mortgage because of bad credit.
Consumers should become aware that their personal information may have been diverted if their billing cycles become inconsistent, i.e., a monthly bill does not arrive at its customary time. Such an indicator should tip off consumers that personal information may have been diverted for criminal purposes.
What do I do if I am an identity theft victim?
If you discover that you have become a victim of identity theft, you need to take immediate steps to protect yourself against further privacy incursions.
Report, report, report…
Contact the three national credit reporting agencies’ fraud departments and place a 90-day initial fraud alert on your credit reports. Tell them you believe you are a victim of identity theft. These agencies are Equifax, TransUnion, and Experian. The initial fraud alerts on your credit reports will keep identity thieves from opening new credit accounts in your name. It will also make it difficult for you to obtain credit during the alert period.
Here is the contact information for all three credit reporting agencies:
Equifax
1-800-525-6285
P.O. Box 740241
Atlanta, GA 30374-0241
www.equifax.com
TransUnion
1-800-680-7289
Fraud Victim Assistance Division
P.O. Box 6790
Fullerton, CA 92834-6790
www.transunion.com
Experian
1-800-397-3742
P.O. Box 9532
Allen, TX, 75013
www.experian.com
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By law, a victim of identity theft only needs to contact one credit reporting agency to place a fraud alert on credit reports. Ideally, this act should set into motion a chain reaction with the other credit reporting agencies to place alerts in your file. In an abundance of caution, you may wish to contact all three credit reporting agencies by phone to initiate fraud alerts on your credit report.
Collect your credit reports and examine them for irregularities
Identity theft victims should also write to all three credit reporting agencies to alert them to the probability of identity theft. Make sure to begin a file and keep a paper trail of all correspondence relating to an identity theft. In the initial written contact, you should request a copy from each agency of your credit report. Victims of identity theft are legally entitled to one free copy of their credit report from each agency – otherwise there is an $8 to $9 nominal fee for credit report requests per agency.
Once you retrieve your credit reports from credit bureaus, victims should study them carefully for any strange or unauthorized activity. New lines of credit or credit accounts should send alarm bells ringing; consumers need to contact the credit card companies of accounts that have been tampered with and request that the account be closed. Contact the fraud departments of affected credit lines by phone and by mail. Make sure to use the address for ‘billing inquiries’ and send all correspondence by registered return receipt in order to create a paper trail.
Most Importantly - File a complaint with the Federal Trade Commission
You need to file a complaint with the FTC relating to your identity theft by using their online form, or by contacting the FTC’s ID THEFT hotline at 1-877-438-4338. The complaint allows law enforcement to initiate tracking of id thief activity nationwide. Upon filing the complaint online, print out several copies of the complaint for your records – you may be required to produce copies of the complaint in the future to other agencies. Remember, once you find out you're a victim of id theft, you need to take a proactive stance toward righting the situation.
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