Identity Theft is one of the worst things that can happen to your personal finances. When someone assumes your identity they can ruin your credit score and destroy your financial reputation for years. Identity theft is a growing crime, but there are some important measures you can take to avoid having your identity stolen.
How to Avoid Identity Theft
The Federal Trade Commission maintains an Identity Theft Awareness website that outlines three important steps for avoiding identity theft: Deter Identity Theft, Detect Identity Theft, and Defend Against Identity Theft. Using these three steps can save you from an expensive and damaging experience.
Deter Identity Theft
The first step and most effective way to prevent identity theft is to deter identity thieves. Don’t give thieves a way to get your personal or financial information. This includes being vigilant with any personal and financial data. These tips will help:
- Secure your financial data under lock and key.
- Don’t carry your Social Security Card in your purse or wallet.
- Shred, burn, or destroy old financial or personal documents when no longer needed.
- Use secure computing methods to deter identity theft.
- Use secure passwords and change them often.
Avoid Giving Information Over the Phone – Ex: Jury Duty ID Theft Scam
A new type of Identity Theft currently making the rounds deals with jury duty. Thieves are identifying themselves as U.S. Court jury coordinators, and contacting people to inform them they have been selected for jury duty. After informing the person they have been selected for jury duty, they ask to verify personal information over the telephone.
Of course, most people state they have never received a jury summons, and the “jury coordinator” asks to verify their name, address, birth date, and Social Security Number so they can cancel the arrest warrant that has been issued in their name. They may also ask to verify credit card numbers.
This scam works on intimidation by threatening people with a fictitious arrest warrant. Don’t fall for it! The court system will not ask you for your personal information. If you receive a call like this, ask them for a phone number where you can call them back. Then verify that information is the same as your local court.
If you receive a similar call, contact your local police station, and the FBI.
This scam has been verified by the FBI.
Avoid IRS Tax Scams and Identity Theft
There is a phishing scam going around purporting to be from the IRS. In this e-mail, they inform the recipient they are entitled to refunds of $92.35 or some other amount due to a calculation error on a past tax return. These e-mails are not from the IRS; they are from thieves who are attempting to extract your personal information to steal your identity and rack up thousands of dollars in charges they will make on your credit.
In this e-mail example, recipients were advised to go to a link and enter their identifying information that would normally be on their tax form, (i.e., name, address, DOB, SSN, etc.) in order to process their refund request. This email is BOGUS. The IRS never sends e-mails requesting personal information; they always send letters advising the individual of a pending problem.
These scams always turn up with renewed force during tax season, when many recipients act without thinking. Never enter your identifying information into a website without understanding exactly why you are doing it and where the information is going. For these types of e-mails, it is best to NEVER click on the link in the e-mail. Instead, type the url directly into the web address bar in your browser.
From the IRS website:
Phishing. Phishing is a technique used by identity thieves to acquire personal financial data in order to gain access to the financial accounts of unsuspecting consumers, run up charges on their credit cards or apply for new loans in their names. These Internet-based criminals pose as representatives of a financial institution and send out fictitious e-mail correspondence in an attempt to trick consumers into disclosing private information. Sometimes scammers pose as the IRS itself. In recent months, some taxpayers have received e-mails that appear to come from the IRS.
A typical e-mail notifies a taxpayer of an outstanding refund and urges the taxpayer to click on a hyperlink and visit an official-looking Web site. The Web site then solicits a social security and credit card number. In a variation of this scheme, criminals have used e-mail to announce to unsuspecting taxpayers they are “under audit” and could make things right by divulging selected private financial information.
Taxpayers should take note: The IRS does not use e-mail to initiate contact with taxpayers about issues related to their accounts. If a taxpayer has any doubt whether a contact from the IRS is authentic, the taxpayer should call 1-800-829-1040 to confirm it.
The IRS also gives information on how to report suspected tax fraud activity.
Detect Identity Theft
The next step is to detect identity theft if it has occurred. The more quickly you discover identity theft, the easier it is to limit the damage to your credit and the easier it is to get the situation resolved.
Monitor your credit report and look for errors. Everyone is eligible for 1 free credit report per year from each of the three major credit bureaus – Equifax, Experian, and TransUnion. You can order these free credit reports from AnnualCreditReport.com. The most effective way to monitor your credit is to stagger your free credit reports and get a free credit report from each of the three major credit bureaus every 4 months.
Here are several ways you can detect identity theft:
- Use an identity theft protection company to monitor your credit reports, scores, and financial accounts. (See trial offers below).
- Use a credit monitoring service to monitor your credit reports.
- Receiving unexpected bills for items you did not purchase.
- Calls or letters from bill collectors or creditors for items you did not purchase.
- No longer receiving expected bills.
- Denials of credit when you should be qualified.
You should make it a habit to review your financial statements on a monthly basis and get into the habit of getting your free credit reports.
Identity theft monitoring offers:
The following commercial identity theft monitoring companies offer free trials and discounts:
These offers may help you prevent, discover, and repair identity theft problems.
Defend Against Identity Theft
If you notice any outward signs of identity theft, take action immediately! The first step is to place fraud alerts on your credit reports. Then take the following actions:
- Review your credit reports carefully to determine where the security breach occurred.
- Close accounts that have been tampered with, or that you suspect may have been accessed fraudulently.
- Report the theft to the Federal Trade Commission.
- File a police report where the theft took place. Most creditors will want proof that a crime has been committed.
You can also place a credit freeze which will prevent anyone from opening new accounts in your name. This will not stop them from using accounts which have already been opened, which is why it is important to close any account that has been tampered with.
Special steps should be taken to help protect children against identity theft.
Protect Yourself Against Different Identity Theft Methods
Thieves are a clever bunch, and can get quite creative when it comes to finding ways to separate you from your hard-earned cash. These are several of the methods criminals use to steal your identity:
Phishing: High-tech scam that uses e-mail or websites to deceive you into disclosing your credit card numbers, bank account information, social security number, passwords, or other sensitive information.
- How to protect yourself: Companies will never ask for sensitive information via e-mail. Never click on links in suspicious e-mails; instead, type the url into the address bar.
Espionage: The act of obtaining, delivering, transmitting, communicating, or receiving information about the national defense with an intent, or reason to believe, that the information may be used to the injury of the United States or to the advantage if any foreign nation.
- How to protect yourself: In this example, you can consider yourself the United States, and the national defense is the protection of your personal and financial information. Espionage would be equivalent to identity theft – or any attempt to obtain your personal information to use against you or to benefit someone else. Defend your personal information as you would defend your life.
Hacking: Illegally accessing other people’s computer systems for destroying, disrupting, or carrying out illegal activities on the network or computer systems.
- How to protect yourself: Hackers will attempt to access your personal information to steal your identity, or simply to cause destruction to the system. This could stem from an attack on your personal computer, or a commercial computer system that harbors your information. The best method of preventing this is to maintain up to date firewall and anti-virus measures and scan all downloads and executable files before opening them.
Malicious Logic: Hardware, software, or firmware capable of performing an unauthorized function on an information system.
- How to protect yourself: Examples of malicious logic include AdWare, SpyWare, Trojan Horses, Keyloggers, and other similar programs designed to record information or cause damage to your system. The best method of preventing this is to regularly scan your hard drive for these programs, maintain up to date anti-virus measures, and scan all downloads and executable files before opening them.
Social Engineering: A euphemism for non-technical or low-technology means – such as lies, impersonation, tricks, bribes, blackmail, and threats – used to attack information systems. For example, an unauthorized person who attempts to gain passwords by posing as a service technician with an urgent access problem.
- How to protect yourself: The majority of identity thieves know the criminal responsible for stealing their identity. Often, their information is stolen by people piecing together bits of their information until they are able to gather enough information that they can assume their identity to apply for credit, take out loans, write checks, and otherwise ruin your financial well-being. Always safe-guard your personal information around everyone – neighbors, friends, coworkers, and even family members.
Identity Theft is a Serious Crime
You have the power to prevent many forms of identity theft if you are vigilant with yuour financial records and actions. While you may not be able to prevent every instance of identity theft, these steps will go a long way toward protecting you, your credit report, and your personal finances. Good luck!