Identity theft sucks. Our mail was stolen recently. All that we know we’re missing are some tax documents, but we’re not taking any chances. Rather than wait for the thieves to do any damage, we’ve taken steps to minimize repercussions.
After filing a report with the US Postal Service, we received a package of information, including a flyer from the Federal Trade Commission describing techniques to fight back against identity theft. The FTC encourages people to share this information, so I’ve converted it to weblog format. This may be seem boring, but it’s important.
According to one study conducted for the FTC [PDF], in 2005, 3.7% of the U.S. adult population were victims of identity theft. Though the median value of the damage caused was $500 per victim, ten percent of victims reported that the thief obtained $6,000 or more. The median time to repair the damage was four hours, but ten percent of victims spent at least 55 hours resolving their trouble.
Identity theft is a real and growing concern. Your best defense is to prepare before it happens.
The first step is to deter identity thieves by safeguarding your information.
- 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. Give it out only if absolutely necessary or ask to use another identifier.
- Don’t give out personal information on the phone, through the mail, or over the internet unless you know who you are dealing with.
- Never click on links sent in unsolicited e-mail. Instead, type in a web address you know. Use firewalls, anti-spyware, and anti-virus software to protect your home computer, and keep them up-to-date. OnGuard Online is a government-sponsored site to help you guard against internet fraud.
- Don’t use an obvious password like your birth date, your mother’s maiden name, or the last four digits of your Social Security number.
- Keep your personal information in a secure place at home, especially if you have roommates, employ outside help, or are having work done in your house.
I bought an inexpensive shredder last fall. I thought it was a dubious expense at first, but lately I’ve been shredding everything I can. As I move toward a paperless personal finance system, the shredder becomes even more valuable. Also, based on the rash of mail theft in our neighborhood, Kris and I have obtained a post office box. At just $3.50 per month, it’s cheap insurance.
Detect suspicious activity by routinely monitoring your financial accounts and billing statements. Be alert to signs that require immediate attention:
- 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.
Regularly inspect your credit report. Credit reports contain information about you, including what accounts you have and your bill paying history.
The law requires each of the three major nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to give you a free copy of your credit report every year. But you have to ask for it.
There are three ways to obtain your credit report:
- Order it online at the government-approved AnnualCreditReport.com.
- Call 1-877-322-8228.
- Complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
You will need to provide some basic information, including your Social Security number, and you may need to provide some personal financial information. If you plan to check your report online, be wary of impostor sites. Be absolutely certain that you have reached AnnualCreditReport.com.
Finally, regularly inspect your financial statements. Review accounts and billing statements, looking for charges you did not make. I review my accounts online at least once per week, and generally more often than that.
If you suspect that you may have been (or may become) a victim of identity theft, you can file a “fraud alert” on your credit reports. This alert tells creditors to follow certain procedures before they open new accounts in your name or make changes to your existing accounts. The three nationwide consumer reporting companies have toll-free numbers for placing an initial 90-day fraud alert; a call to one company is supposed to be sufficient:
- Equifax: 1-800-525-6285
- Experian: 1-888-397-3742
- TransUnion: 1-800-680-7289
Placing a fraud alert entitles you to free copies of your credit reports. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.
(Note: I’m not convinced the fraud alert system works. I filed a fraud alert with Equifax on Sunday morning. It took them more than 24 hours to respond with e-mail confirmation. When I tried to get my free credit report from the link they provided, the system would not process the request. When I tried to get it by phone, they wanted $10 and I could not reach a live operator to help me. The Equifax e-mail promised they’d forward the fraud alert to Experian and TransUnion, but I still haven’t heard from either agency. As I say, I’m not convinced this system works. I’m cranky, in fact.)
Close any accounts that have been tampered with or established fraudulently. Call the security and fraud departments of each company where an account was opened or changed without your permission. Follow up in writing, with copies of supporting documents. Use the ID Theft Affidavit [PDF] to support your written statement.
Ask for verification that the disputed account has been closed and the fraudulent debts discharged. Keep copies of documents and records of your conversations about the theft.
File a report with local law enforcement officials to help you with creditors who may want proof of the crime. Also report the theft to the Federal Trade Commission, which will help law enforcement officials across the country in their investigations. You can use any of the following methods:
- Online at ftc.gov/idtheft
- By phone: 1-877-ID-THEFT (438-4338)
- By mail: Identity Theft Clearinghouse, Federal Trade Commission, Washington, DC 20580
Lasly, the FTC has put together the following ten-minute educational video to provide an overview of identity theft, and to outline steps consumers can take if they suspect they’ve become a victim. (Video opens in a new window — sorry, that’s the only way I can figure out how to link it.)
Much of the information in this article is taken directly from FTC documents, which are in the Public Domain.