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Identity Theft

Today we are going to discuss a problem that has affected millions of Americans, including Oprah Winfrey, Bill Gates, Tiger Woods and even Federal Reserve Chairman Ben Bernanke.

The problem is identity theft.

Identity theft occurs when someone steals your personal information (such as your credit card or Social Security number) and uses it fraudulently.  If you are a victim it can cost you time and money and ruin your credit rating and good name.

Identity theft can happen in a number of different ways.  For example, a thief may:

  • Go through your trash or “dumpster dive”
  • Steal your wallet or purse
  • Steal your mail or submit a change of address form for your mail
  • Use “phishing” or fake emails to get you to provide personal information
  • Steal personnel records from their employers

While there are no ways to absolutely guarantee you’ll never be a victim of identity theft, there are ways to minimize your risk. By following the “3 D’s” of identity protection, you can make it more difficult for thieves to walk away with your identity.

The “3 D’s” are Deter, Detect, and Defend.

DETER: The old adage “an ounce of prevention is worth a pound of cure” is certainly true in regards to identity theft.  Here are some steps you can take to deter identity theft:

  • Shred paperwork with personal information and financial documents before you discard them.  However, not just any shredder will do.  You need to make sure you are using a cross-cut or diamond-cut shredder instead of a single-line straight-cut shredder.  Identity thieves have been known to piece together items such as a shredded credit card application; tape it together and mail it in.  The thief won’t be able to tape back together small pieces from a cross-cut or diamond-cut shredder, though.
  • 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.  Thieves actually only need this one piece of information to steal your identity, so keep your social security cards in a safe place at home or in a safety deposit box.
  • Don’t give out personal information on the phone, through the mail, or over the Internet unless you are sure who you are dealing with.
  • Never click on links sent in unsolicited emails; instead, type in a web address you know.
  • Don’t use obvious passwords such as 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.

DETECT: Detect suspicious activity by routinely monitoring your financial accounts and billing statements.

  • Know when your bills and statements normally arrive so you can follow up if you don’t get them.  Inspect them carefully when they do come to make sure there are no errors.
  • Check your credit report on a regular basis.  Credit reports contain information about you, including what accounts you have and your bill paying history.  There are three major nationwide consumer reporting companies (Equifax, Experian, and TransUnion) and the law requires each of them to give you a free copy of your credit report each year if you ask for it.  To obtain that free copy go to www.AnnualCreditReport.com.  A great strategy to monitor your report on a regular basis is to pull one report from each company every four months.  That way you should be able to find fraudulent information sooner.

DEFEND:  If you suspect a problem you need to take action immediately.  Here are the steps to take:

  • Place a “Fraud Alert” on your credit reports by calling any one of the three nationwide credit reporting companies.  Placing a fraud alert on your credit reports tells creditors to follow certain procedures before they open new accounts in your name or make certain changes to your existing accounts.  A call to one company is sufficient – that company will pass the information on to the other two.
  • Close accounts that have been tampered with or opened fraudulently. To close your accounts, call the security or fraud departments of each company where an account was opened or changed without your okay. Follow up in writing, with copies of supporting documents.  You can use the ID Theft Affidavit at http://ftc.gov/idtheft to support your written statement.  Ask for written verification that the disputed account has been closed and the fraudulent debts discharged.
  • File a police report.
  • Contact the Federal Trade Commission. The FTC is the federal consumer protection agency that helps law enforcement officials in their investigations.

NOTE: The majority of this article is from information on the FTC website.  To visit that site and learn more go to http://www.ftc.gov/idtheft.