What is Identity Theft?
Your everyday transactions reveal bits of personal information such as your bank and credit card account numbers, income, Social Security Number (SSN), name, address and phone numbers. An identity thief obtains personal information and uses it without your knowledge to commit fraud or theft. Once your identity has been stolen, it can take months or even years to clean up the mess criminals make of your finances, credit and good name. Although you cannot completely ensure that identity theft does not happen to you, many precautions can be taken to lesson the chances. Keep reading to learn more about preventing identity theft.
How Does Identity Theft Occur?
The first step to preventing identity theft is understanding how it occurs. Identity thieves will use a variety of methods to access your personal information, including the following:
- Obtaining information from businesses or other institutions by stealing records, bribing an employee or hacking into the organization's computers
- Rummaging through trash at private residences or businesses
- Obtaining credit reports by posing as someone who has legal rights to this information, such as a landlord or employer
- Using special information storage devices to steal credit and debit card numbers while processing transactions
- Stealing purses or wallets to get identification and credit and bank cards
- Stealing mail which contains personal information such as bank or credit card statements, pre-approved credit offers, new checks or tax information
- Completing a change of address form to divert victims' mail to a new location
- Stealing personal information from private residences
- Posing as a business person or government official to get you to voluntarily give out information
What Do Thieves Do With This Information?
Once thieves obtain your information, they may take a variety of actions, including the following:
- Using your credit and debit card numbers to buy expensive items easily resold, such as computers
- Using your information to open new credit card accounts. When the bills are never paid, this will negatively impact your credit report
- Changing the mailing address on your credit card account then running up charges on the account. Because you are no longer receiving the bills, it may take you awhile to realize there is a problem
- Taking out auto loans in your name
- Establishing phone or wireless service in your name
- Counterfeit checks or debit cards, and drain your bank account
- Open a bank account in your name and write bad checks from that account
- File for bankruptcy under your name to avoid paying debts they've incurred, or to avoid eviction
- Give your name to the police during an arrest. If they are released and don't show up for their court date, an arrest warrant will be issued in your name.
How Do I Tell If My Identity Has Been Stolen?
A main way to recognize identity theft is by tracking the balances of all financial accounts, looking for unexplained charges or withdrawals. Other methods of identifying this crime include:
- Bills or financial statements failing to arrive on time, indicating a thief may have changed your address
- Receiving credit cards you never applied for
- Denial of credit for no apparent reason
- Receiving calls from debt collectors or companies about merchandise or services you did not buy
What Other Steps Can I Take To Prevent Identity Theft?
Regularly order your credit reports from all three major agencies. Check for any errors or new accounts opened wrongly in your name. If your identity has been stolen, you should order credit reports more frequently for the first year. Federal law allows these bureaus to charge $9 for each credit report, though some states may allow a free or reduced-rate report. The three major credit bureaus are as follows:
Protect Yourself: Manage Your Personal Information!
The best way you can prevent identify theft is by exercising caution in all your daily activities. For example:
- Use passwords to protect your credit card, bank and phone accounts
- Never use passwords which are easy to guess or contain personal information
- Secure any personal information you store at home
- Find out about information security procedure at your work. Who has access to your records? Are they securely stored? What is the disposal policy?
- Don't give out personal information over the phone, through the mail or over the internet unless you initiated contact
- Whenever possible, deposit outgoing mail in post office collection boxes or at the local post office rather than an unsecured box
- Remove mail from the box promptly
If you will be away from home for an extended time call the U.S. Postal Service at 1-800-275-8777 to request a vacation hold.
Shred all documents which may contain personal information such as bank statements and other financial information before placing in trash
Keep your Social Security card in a secure place and only give your SSN when absolutely necessary - Always ask if you can give an alternate number
Minimize the identification information and number of cards you carry
Keep your purse or wallet in a safe place at work
Using Your Computer Safely
- For identity thieves, your computer is a goldmine of personal information. Follow these tips to safeguard your computer:
- Regularly update your virus protection software - Some viruses cause your computer to export personal information
- Never open a virus or link provided by a stranger - It could open your computer to a virus or hijacker
- Always use a firewall - without this, others can access your files without your knowledge
- Only use a secure browser
- Only store financial information on your computer if absolutely necessary
- Never activate automatic log-on features, because this makes it easier for others to access your computer
Before you dispose of a computer, completely erase the hard drive with a program for this purpose
What if My ID Has Already Been Stolen?
If your personal information has already been stolen, follow these four steps immediately. Make sure you follow up all phone calls with letters sent return receipt requested. Make copies of any letters for your personal files.
1. Put a fraud alert on your credit report and review your credit report. Call any of the three credit bureaus and place a fraud alert on your account. This will prevent the identity thief from opening additional accounts in your name. Once you have identified one bureau, it will notify the three others. All three credit reports will be sent to you. Once you receive the credit report, review it to locate any errors. Notify the credit bureau by telephone and in writing. You should continue to check your credit reports periodically over the first year after you discover theft.
2. Close any accounts that have been tampered with or opened fraudulently.
a. Credit Accounts
Credit accounts include all accounts with banks, credit card companies and other lenders, and phone companies, utilities, internet service providers and other service providers.
If you are closing existing accounts and opening new ones, use new Personal Identification Numbers (PINs) and passwords.
If there are fraudulent charges or debits, ask the company about the following forms for disputing those transactions:
For new unauthorized accounts, ask if the company accepts the ID Theft Affidavit (available at www.ftc.gov/bcp/conline/pubs/credit/affidavit.pdf). If they don't, ask the representative to send you the company's fraud dispute forms.
If your ATM card has been lost, stolen or otherwise compromised, cancel the card as soon as you can. Get a new card with a new PIN.
If your checks have been stolen or misused, close the account and ask your bank to notify the appropriate check verification service. While no federal law limits your losses if someone steals your checks and forges your signature, state laws may protect you. Most states hold the bank responsible for losses from a forged check, but they also require you to take reasonable care of your account. For example, you may be held responsible for the forgery if you fail to notify the bank in a timely way that a check was lost or stolen. Contact your state banking or consumer protection agency for more information.
You should also contact these major check verification companies. Ask that retailers who use their databases not accept your checks.
TeleCheck - 1-800-710-9898 or 927-0188
Certegy, Inc. - 1-800-437-5120
International Check Services - 1-800-631-9656
Call SCAN (1-800-262-7771) to find out if the identity thief
has been passing bad checks in your name
3. File a report with the local police in your community or the police in the community where the fraud took place.
By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement track identity thieves. The FTC can refer complaints to other appropriate government agencies and companies for further action. The FTC enters the information you provide into a secure database.
Identity Theft Clearinghouse
Federal Trade Commission
600 Pennsylvania Avenue NW
Washington, DC 20580