When Michelle’s handbag was stolen last year, she lost more than the $38 in her wallet. She lost her identity. Using the driver’s license, credit cards and Social Security card contained in her purse, the thief was able to open new credit card accounts, obtain a car loan and rent an apartment in Michelle’s name.
Michelle’s first hint that her identity had been hijacked came weeks later when she got a bill of more than $10,000 from an electronics store for a TV, two computers and a cell phone she did not buy. Next came a quick succession of bills for goods bought with other unauthorized credit cards and calls from a collection agency for missed payments on a car she did not purchase. Although she’d canceled her stolen credit cards and was not held responsible for the fraudulent credit card purchases, Michelle spent hundreds of dollars and nearly two years restoring her reputation and re-establishing her credit.
The Aftermath of Identity Theft
According to the Federal Trade Commission (FTC), as many as 9 million people have their identities stolen each year with catastrophic results. Identity thieves can run up huge bills on your credit cards, empty your bank accounts, use your name to open checking accounts and write bad checks, and file for bankruptcy in your name. You could lose your job, be denied a loan, or face criminal charges for a crime you did not commit. In short, identity theft can destroy your life.
How Identity Theft Happens
From grab-and-gallop handbag heists to sophisticated computer schemes, including exploiting social networks such as Facebook, savvy identity thieves employ a variety of methods to get their hands on your personal information:
Dumpster Diving: Yes, thieves really do comb through your garbage looking for bills and bank statements and anything else that would have your personal information on it.
Skimming: Identity thieves steal your personal or account information by using a special storage device that reads the data on the magnetic strip on your credit card as you swipe it.
Phishing: In this scam thieves send e-mail from what looks like an official organization such as a bank or retailer asking you to verify your personal information. “Phishers” will also try to get information on the phone by pretending to represent reputable companies.
Spyware: By bundling spyware into email attachments or free software such as screen savers or games, identity thieves can access everything on your computer, including your user name and password, online banking transactions, online purchases and email messages.
The Old Fashioned Way: They steal it, grabbing handbags, wallets, briefcases, computers and cell phones.
How to Protect Yourself from Identity Theft
A healthy dose of prudent practices and common sense will help protect you against identity theft:
Don’t give out your social security number unless it is absolutely necessary. Do not carry your Social Security card, Medicare card, military ID or any other card that has your Social Security number on it in your wallet. Shred unwanted credit card offers that come in the mail along with any documents that contain such personal information as account numbers, your social security number, and medical data. Stop any prescreened credit and insurance mailings by calling 1-888-567-8688 to keep thieves from intercepting and accepting the offers in your name. Never respond to phone calls or email asking you to verify personal information. Open your bills and bank statements promptly and check for charges and debits that you did not make. Contact your bank or credit card issuer immediately if you discover suspicious transactions. Don’t mail bills or documents that contain personal information from your home mailbox. Take them to the post office to mail. Review your credit report every year to make sure no unauthorized credit cards have been issued and that there have been no inquiries by people you do not do business with. Photocopy everything in your wallet to make it easier to cancel accounts should your wallet be lost or stolen.
What to Do If You Are a Victim of Identity Theft
If you discover your identity has been stolen, notify the police and file an Identity Theft Report. This will entitle you to certain legal rights when provided to TransUnion, Equifax, and Experian, the three major credit reporting agencies. You should also have these agencies place a fraud alert on your credit reports to prevent the thief from opening additional accounts in your name.
Make sure to close all your existing accounts and open new ones with different account numbers and PINs. Avoid using any personal information the thief may now have access to. Close all fraudulently opened accounts.
Finally, file a complaint with the Federal Trade Commission, using their online complaint form, or by calling their Identity Theft Hotline at 1-877-438-4338. Provide a printed copy of your online complaint to the police so they can incorporate it into their report. The FTC report, in conjunction with the police report, can be used to ensure that fraudulent information and debts do not appear on your credit report. It can also be used to prevent companies from continuing to collect debts that resulted from the theft of your identity.
The risk of identity theft is greater in a down economy. Now, more than ever, it is critical that you be vigilant in protecting your personal information.
Sources:
The Federal Trade Commission
The Consumer Federation of America