Protecting Yourself From Identity Theft
What is identity theft? Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes. The FTC estimates that as many as 9 million Americans have their identities stolen each year. In fact, you or someone you know may have experienced some form of identity theft. The crime takes many forms. Identity thieves may rent an apartment, obtain a credit card, or establish a telephone account in your name. You may not find out about the theft until you review your credit report or a credit card statement and notice charges you didn’t make—or until you’re contacted by a debt collector. Identity theft is serious. While some identity theft victims can resolve their problems quickly, others spend hundreds of dollars and many days repairing damage to their good name and credit record. Some consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, housing or cars because of negative information on their credit reports. In rare cases, they may even be arrested for crimes they did not commit. How do thieves steal an identity? Identity theft starts with the misuse of your personally identifying information such as your name and Social Security number, credit card numbers, or other financial account information. For identity thieves, this information is as good as gold. Skilled identity thieves may use a variety of methods to get hold of your information, including: 1. Dumpster Diving. They rummage through trash looking for bills or other paper with your personal information on it. 2. Skimming. They steal credit/debit card numbers by using a special storage device when processing your card. 3. Phishing. They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information. 4. Changing Your Address. They divert your billing statements to another location by completing a change of address form. 5. Old-Fashioned Stealing. They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records, or bribe employees who have access. 6. Pretexting. They use false pretenses to obtain your personal information from financial institutions, telephone companies, and other sources. Should you file a police report if your identity is stolen? A police report that provides specific details of the identity theft is considered an Identity Theft Report, which entitles you to certain legal rights when it is provided to the three
major credit reporting agencies or to companies where the thief misused your information. An Identity Theft Report can be used to permanently block fraudulent information that results from identity theft, such as accounts or addresses, from appearing on your credit report. It will also make sure these debts do not reappear on your credit reports. Identity Theft Reports can prevent a company from continuing to collect debts that result from identity theft, or selling them to others for collection. An Identity Theft Report is also needed to place an extended fraud alert on your credit report. How do I request a "fraud alert" be placed on my file? You have the right to ask that nationwide consumer credit reporting companies place "fraud alerts" in your file to let potential creditors and others know that you may be a victim of identity theft. A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you. It also may delay your ability to obtain credit. You may place a fraud alert in your file by calling just one of the three nationwide consumer credit reporting companies. As soon as that agency processes your fraud alert, it will notify the other two, which then also must place fraud alerts in your file.
Equifax: 1-877-576-5734; www.equifax.com Experian: 1-888-397-3742; www.experian.com/fraud TransUnion: 1-800-680-7289; www.transunion.com
Where Can I find more information about identity theft? The FTC's Identity Theft website can be found at www.ftc.gov/IDTheft. An initial fraud alert stays in your file for at least 90 days. An extended alert stays in your file for seven years. To place either of these alerts, a consumer credit reporting company will require you to provide appropriate proof of your identity, which may include your Social Security number. If you ask for an extended alert, you will have to provide an identity theft report. An identity theft report includes a copy of a report you have filed with a federal, state, or local law enforcement agency. For more detailed information about the identity theft report, visit www.consumer.gov/idtheft. Should I put a security freeze on my credit reports? One of the best identity theft prevention tools is the security freeze. A security freeze gives consumers the choice to “freeze” or lock access to their credit file against anyone trying to open up a new account or to get new credit in their name. When a security freeze is in place at all three major credit reporting agencies, a consumer's credit report and credit score cannot be shared with potential creditors or other persons considering opening new accounts unless the consumer decides to unlock the file by contacting a consumer reporting agency and providing a PIN or password. How does a state security freeze differ from a federal fraud alert? A security freeze is a mechanism to prevent new account identity theft. Only a security freeze allows the consumer to limit access to his or her consumer reporting file. The federal Fair Credit Reporting Act creates two types of fraud alerts, but the only type
available to consumers who have not yet been victims of identity theft, called the initial fraud alert, expires after 90 days unless renewed. The very short time period makes this a poor tool for ID theft prevention. The extended fraud alert is restricted to ID theft victims. Neither the initial nor the extended fraud alert stops the release of the credit report or the credit score. Instead, under the federal Fair Credit Reporting Act, when a fraud alert is attached to a credit file, potential creditors must take certain steps to verify a credit applicant's identity before extending credit. The fraud alert, however, does not prevent the potential creditor from getting the credit report or the credit score. What’s the cost of a security freeze? If you freeze your credit files, you’ll need to temporarily lift the freeze in order to access new credit or open up new accounts. This might or might not include utility accounts, depending on what state you live in and the details of your state’s security freeze law. You may also have to pay fees. While some states protect their residents with lower fees, in many states it will cost $10 per consumer credit reporting agency each time you lift the freeze. * If you don't expect to open up many new accounts in the coming years, the freeze may be a cost effective means of preventing new account fraud. You can put it in place and forget about it. * If you plan to seek new credit soon, such as refinancing your home mortgage, taking out an auto loan, or applying for a credit card, consider the period of time over which you’ll make those applications. You could place the freeze on your credit files and then lift it for a period of time when you are seeking credit, or you could wait until after an
upcoming refinance or other loan to consider placing your security freeze.
* Service providers such as cell phone companies may check your credit when you set up a new account. If you plan on switching providers, you may need to lift the freeze to open a new service account.