When your private financial information gets into the wrong hands, the consequences can be devastating. Any type of identity theft can disrupt your finances, credit history and reputation, and take time, money and patience to resolve. Often, identity thieves will use a Social Security number, mother’s maiden name, date of birth or account number to open fraudulent new credit card accounts, charge existing credit card accounts, write share drafts, open share accounts or obtain new loans.
You may already know that identity theft is a serious crime. You take steps to protect your personal information by not opening unrecognized emails and shredding important documents. Yet there are many ways you can help protect yourself on a daily basis, from taking precautions while online to checking your credit report periodically. If you should fall victim to identity theft, it is important that you act quickly. Contacting the correct agencies and filing the necessary reports will go a long way toward minimizing any damage to your financial well-being.
Tax Identity Theft
Tax identity thieves may use your Social Security number to get a tax refund or a job. It is important to be aware that if the IRS sends you a notice saying their records show that you were paid by an employer you don’t know or that more than one tax return was filed using your social security number, you may be a victim of tax identity theft.
Who to Contact
Credit Bureaus: Immediately contact the fraud departments of each of the credit bureaus. Alert them that you are a victim of identity theft, and request that a fraud alert be placed in your file. You can also request a security freeze, preventing credit issuers from obtaining access to your credit files without your permission. This prevents thieves from establishing new credit in your name.
Law Enforcement: Report identity theft to your local police department. If the crime occurred somewhere other than where you live, you may wish to report it to law enforcement there as well. The police will create an “identity theft report” and you can request a copy.
Federal Trade Commission (FTC): The FTC does not investigate identity theft cases, but they can share information that you give them, such as the identity theft report number, with investigators nationwide. For more information about fighting back against identity theft, visit the FTC’s Identity Theft website.
- The Federal Trade Commission’s Identity Theft Hotline is 877-IDTHEFT (877-438-4338)
- IRS Identity Protection Specialized Unit: For suspected tax identity theft, call 1-800-908-4490.
There are some simple steps you can take to reduce or minimize the risk of becoming a victim of identity theft.
Practice Safe Internet Use
Delete spam emails that ask for personal information, and keep your anti-virus and anti-spyware software up-to-date. Shop online only with secure web pages (check the bottom of your browser for an image of a lock or look for “https” in the address bar). Never send credit card numbers, social security numbers and other personal information via email.
Destroy Private Records
Tear up or shred credit card statements; ATM, credit, or debit card receipts; bank deposit receipts; loan solicitations; and other documents that contain private financial information.
Secure Your Mail
Empty your mailbox quickly and get a mailbox lock. When mailing bill payments and checks, consider dropping them off at the post office or a secure mailbox.
Be Careful With Your Social Security Number
Your social security number is a major target for identity thieves because it can give them access to your credit report and bank accounts. Never carry your card with you. Instead, memorize your number and keep the card in a secure place at home or in a safe deposit box. Never write or print your social security number on checks.
Check Your Credit Report
At least once a year, obtain and review your credit report for suspicious activity.
Beware of Scams
Always be on the defensive with your private information. Never give out personal information to telemarketers or respond to emails from someone claiming to represent your bank, credit card issuer, a government agency, a charity, or other organization. If you think the request is legitimate, contact the company directly to confirm their claims.
Credit, Debit and Fraud Protection
Consumers often ask whether debit or credit cards provide greater consumer protection against fraud. The question itself indicates a few key preconceived notions about fraud as it relates to personal finance; as a consumer, it’s important to know that:
- You aren’t liable for unauthorized purchases. All major credit and debit card issuers provide $0 liability guarantees for unauthorized charges.
- Fraud isn’t all that prevalent. Of all the purchases made with credit cards and debit cards, only around 0.05% are affected by fraud.
What about cash? The real difference in financial security comes when you compare both credit cards and debit cards to cash. If a thief gets ahold of your cash, there’s really nothing you can do, save filing a report with the police. Cash doesn’t come with a $0 liability guarantee, after all.
How to Protect Yourself
There are a few steps you can take to further insulate yourself from financial intruders, no matter how you choose to go about spending your money. It’s always a good practice to:
- Check your credit reports for inaccuracies. You are entitled to one free copy of your TransUnion, Equifax and Experian credit reports every 12 months. It’s a good idea to request your report from one of these agencies every four months to stay on top of changes.
- Keep your Social Security Number (SSN) private. Make sure to give out your SSN only to reputable companies after you have contacted them, not after they have contacted you.
- Shred financial documents. Dumpsters are a main source of information for identity thieves.
- Make arrangements for your mail while on vacation. Mail overflowing from a mailbox is a sign of opportunity for both identity and property thieves.
- Use secure passwords. Avoid opening up your financial world to anyone who knows your pet’s name or your birthday, and make sure to change your passwords regularly.
- Verify web security. Only provide personal financial information on “https” websites.