How To Guard Your Identity
Lynn Brenner
Published: July 31, 2005
By
Lynn Brenner
These days, it seems you can’t turn on the news without hearing about yet
another security breach exposing consumer information to identity thieves. Due
to stunningly widespread corporate carelessness, the records of more than 46
million Americans were lost or stolen in the first half of 2005 alone. Clearly,
it’s up to you to protect yourself. Here’s what you need to know.
What a Criminal Does
An identity thief doesn’t just steal your credit card
and go on a spending spree. He gets new cards, opens new accounts and takes out
new loans, leaving a trail of unpaid bills in your name. He can even use your
identity to commit crimes or acts of terrorism, says
Mari Frank, a California lawyer who
was an identity theft victim and is now an authority on the crime. Most victims
don’t find out what has happened until long afterward, when they’re called by a
collection agency or turned down for a loan. The thief may be someone you know.
Linda Foley, a magazine writer, learned that her own employer had swiped her
identity to open cell phone and credit card accounts. Foley and her husband are
now the executive directors of the Identity Theft Resource Center (ITRC) in San Diego. Sometimes
the thief works for a company you do business with. Bridget J. Thomas of Prairieville, La., learned that
her identity had been stolen by a bank employee at a branch 300 miles from the
one she used. “When she was caught, she was employed with a different bank, in
a different state,” says Thomas. “And even after she was arrested, that didn’t
stop the collection agencies from hounding me.”Setting
the record straight is a nightmare that can take years. In serious cases, victims
spend an average of 600 hours and $1400 in out-of-pocket expenses to repair
their credit. Until you can “prove” your innocence, you may face higher
insurance rates and credit card fees, be rejected for a student loan or a
mortgage, find you can’t get a job—even be arrested for crimes you didn’t
commit.
Can This Happen To You?
All a thief needs is your Social Security number—which is routinely used by
government agencies, health care providers, utility companies, employers and
financial institutions. Even your video rental store has it. Often, this
information is publicly available. That’s how retired Gen. John M. Shalikashvili, the former chairman of the Joint Chiefs of
Staff, became a victim: His Social Security number, along with those of other
military officers, was published in the Congressional Record and later posted
on a Web site. In 1999, thieves used their identities to open 273 new credit
card accounts and run up $200,000 in charges. And all your personal information
is now for sale by data brokers. In February, ChoicePoint,
a huge data broker, revealed that it had unwittingly sold consumer Social
Security numbers and credit reports to criminals posing as businessmen. That
disclosure was mandated by a 2003 California law requiring
consumer notification when data is compromised. (A weaker version of that law
has been proposed at the federal level.) The same law has revealed shocking
corporate irresponsibility: Bank of America, Time Warner, Wachovia, MCI and
Ameritrade are among the household names that have admitted losing the personal
data of more than 6 million customers and/or employees so far this year.
MasterCard International disclosed that a hacker had stolen 40 million account
numbers from a company that processes the transactions of MasterCard, Visa USA, American
Express and Discover cardholders.
A New Form of Defense
You could stop ID thieves cold by freezing access to
your credit file. The file becomes off-limits to anyone who doesn’t know the
secret PIN number that you choose. The result: A person applying for credit in
your name is rejected, because the lender can’t check your history to approve
the application. (Your current credit cards aren’t affected.) And if you want
to apply for new credit or let someone run a background check on you, you can
get a credit thaw. Before shopping for a new car, for example, you might thaw
your history for auto dealers.Yet only 10
states—California, Colorado, Connecticut, Illinois, Maine, Nevada, Louisiana,
Texas, Vermont and Washington —let consumers block access to their credit
files. The three big credit bureaus each charge about $10 for a freeze and $10
for a thaw. So true protection costs about $60 if you opt for
one thaw a year, says Linda Foley. By contrast, credit monitoring costs
around $100 a year and only tells you after the fact that you’ve been robbed.
Congress is considering a law to allow credit freezes nationwide, but banks,
mortgage brokers and retailers strongly oppose giving consumers this option.
“The biggest opponents are the credit bureaus,” says Mari Frank. “They make a
fortune selling access to your credit report.” These firms are lobbying for a
weak federal law, which would supersede tough state laws. They argue that a
credit freeze hurts the consumer by eliminating the convenience of instant
credit. True, it can take up to three days to thaw your credit file. “But how
often do you buy a car or apply for a mortgage?” says Foley. You should get to
decide whether to limit access to your own data, she adds. If you agree, tell
your Senators and Representative. At www.senate.gov or www.house.gov you’ll
find their names and contact information.
What You Can Do Now
Periodically check your credit report for suspicious
activity. By September, all Americans will be entitled to a free annual credit
report from each of the three bureaus—Experian,
Equifax and TransUnion. By requesting a report every
four months, you can keep free tabs on your record year-round, instead of
paying for credit monitoring. (Go to www.FTC.gov/ credit for more information.)
Buy online with credit, not debit, cards. With a credit card, your maximum
liability for unauthorized purchases is $50.Don’t respond to a ‘phishing’ e-mail. It looks just like a message from a
company you do business with and often warns that your account will be
terminated if you don’t “update” or “verify” your financial information within
24 hours. Don’t click on links in this e-mail! To check it out, type in the
firm’s Web address yourself or call the company.
If You’re a Victim...
•Act fast—and brace yourself. You may face uncooperative credit and law
enforcement agencies. For emotional support and sound advice, rely on
organizations like ITRC (at www.idtheftcenter.org) and books like Mari Frank’s
From Victim to Victor: A Step by Step Guide for Ending the Nightmare of
Identity Theft, which lists the agencies to call for help and provides all the
legal letters you need to send.•Call
Equifax, Experian and TransUnion
to put a fraud alert on your credit reports. The alert lasts up to 90 days and
requires creditors to call you before opening new accounts in your name. But be
warned: There’s no legal requirement to honor alerts; merchants eager to make
sales often ignore them.•Close
your credit card accounts and change the passwords on all your financial accounts.•File a police report. Credit bureaus won’t extend
a fraud alert without it. Unfortunately, says Frank, local police are often
reluctant to provide a report. Many lack the resources to investigate the crime.•Mail copies of the police
report to all three credit agencies with a cover letter demanding your complete
credit file. •Call every creditor with a bogus account listed in your file and
have them close it immediately. Demand copies of all fraudulent applications
for credit and billing statements, advises Frank. Creditors don’t want to
divulge that information—but they will if you request it in writing and enclose
a copy of a police report.
Safety Measures
Stolen wallets and checkbooks remain the most frequent sources of ID theft.
*Avoid carrying your checkbook or your Social Security card. Photocopy your
card and cut out all but the last four digits. Government agencies and
companies should be required to X out all but the last four numbers too, says
victims’ advocate Linda Foley.
*Never give out your Social Security number without first asking, “What happens
if I don't give it?” Most of the time, the answer is, “Nothing.”
*Don’t use your mother’s real maiden name or your real city of birth as
identifiers, advises Foley. Use made-up names. (City of birth: Atlantis.) But
never make up a Social Security number! That creates a problem for someone
else.
*Try to add passwords to online and offline accounts, so that anyone who calls
your bank or mutual fund needs more than your name, address and Social Security
number to impersonate you.
*Make sure your mail is delivered to a locked box.
*Buy a cross-cut shredder and destroy all unsolicited pre-approved credit
offers and blank “courtesy” checks.
You may also find these pages of interest:
RMCN Credit Services
1611 Wilmeth Road, Suite B
McKinney TX 75069
(972) 529-0900 Office (972) 562-0225 Fax
Toll Free (888) 4-MY-REPAIR
Se Habla Español
