Identity Theft Protection
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What is Identity Theft?
Whether you're worried about identity theft or you have been the victim of identity theft in the past, identity theft protection service is one way you can gain peace of mind and protect yourself.
It's a good idea to sign up for credit monitoring service to track your credit report on TransUnion, Experian and Equifax daily and notify you of any changes. Identity theft is one of the most damaging and pervasive crimes in this country, and millions fall victim every year.
Learn how to identify identity theft, what to do if you're a victim and how to protect yourself going forward.
What is Identity Theft?
Identity theft is a crime that refers to any action in which someone wrongfully obtains and uses another person's personal information in a way that involves deception or fraud. Most cases of identity theft involve financial gain. Unfortunately, most people don't realize how easy it is for criminals to access personal data, such as dumpster diving for checks, credit card statements and "preapproved" credit card offers.
Once a thief obtains your information, they can use it in many ways, including:
- Credit card fraud. This includes application fraud (opening a new card in your name and running up a bill) and existing account fraud (changing your billing address then running up charges).
- Bank and finance fraud. Thieves may use your information to open a bank account in your name to write bad checks. They may also clone your debit card to make electronic withdrawals, draining your account. Some even create and use counterfeit checks with your account number, or take out loans in your name and then default.
- Government documents fraud. Thieves can use your Social Security number to obtain and ID card or driver's license in your name, with their picture. They can also get government benefits or even file a fraudulent tax return early in the season before you get a chance to steal a refund.
- Other examples of identity theft include applying for jobs with your social security number and name, using your information to get utility services, renting an apartment with your name or even giving your information during an arrest. In this case, a warrant could be issued for your arrest!
The Cost of Identity Theft
Identity theft is truly one of the most pervasive crimes. It affects more than 11 million people in the United States every year, and the damage can be widespread. If you fall victim to identity theft, you risk losing not only the money in your bank account, but also your financial identity and good standing.
The real cost of identity theft includes:
Time spent repairing the damage. When you fall victim to identity theft, you spend your time tracking down documents and information necessary to fix the problem. The average victim spends between 60 and 200 hours just getting the problem fixed.
Credit is destroyed. If you don't discover the problem quickly, a thief can make off with your financial resources in no time. By the time you discover you're a victim, your credit scores could be in the toilet after someone has gone on a spending spree under your name. Your creditors may cancel your credit cards, you may start paying more for insurance, you could lose your job and you may even lose your home, not to mention the trouble you'll have getting a new loan in the future.
The emotional cost. Don't underestimate the stress and heartache you'll go through as you deal with the aftermath of this crime. Studies even find that the emotional grief of identity theft resembles the grief suffered by victims of a violent crime.
What to Do If You're a Victim
If you discover you're the victim of identity theft, take action quickly. There are three things to do immediately: place an initial fraud alert on your credit reports, order your credit reports to determine the extent of the damage and create an identity theft report.
The identity theft report will be submitted to the FTC and the police when you file a police report. It will help you deal with credit bureaus, debt collectors and businesses that opened accounts under your name or gave the thief credit. This report will also be used to get fraudulent information removed from your credit, stop companies from collecting debts that resulted from the theft, get an extended fraud alert on your credit reports and get information from companies about the accounts the thief abused or opened.
Next, you'll need to spend time contacting credit bureaus and businesses to report and correct the problem. You also need to contact your bank or card issuer if your debit or credit card was stolen. Reporting the problem quickly will limit your liability on fraudulent charges.
If you believe your tax accounts were affected or your number was used for employment purposes, you'll have additional steps to take. If you receive a letter from the IRS stating you have filed more than 1 tax return or you have a balance due, refund offset or collection actions based on a year you did not file, call the IRS Identity Theft Protection Specialized Unit immediately at 1-800-908-4490.
If you receive a W-2 from an unknown employer, your Annual Notice of Earnings shows more wages than you earned or you've had Social Security benefits adjusted or denied, contact the Social Security Administration at 1-800-772-1213 to address the problem.
How to Protect Yourself
The following are the best ways to avoid becoming a victim of identity theft.
- Safeguard personal information. Keep Social Security cards at home, collect your mail quickly, shred unwanted statements, expired cards and credit offers to prevent dumpster divers.
- Monitor bank statements and credit card statements. Check for suspicious activity, such as purchases you did not make. The faster you catch the problem, the easier it is to contain damage.
- Use secure websites and be careful about open or public networks, such as the library or public Wi-Fi.
- Avoid phishing scams. Do not give out personal information online, over the phone or through the mail unless you know exactly who you are dealing with. Identity thieves often pose as bank representatives, for example, to get you to provide identifying information.
- Identity theft protection services are not necessary, but they can give you some peace of mind. Just be aware of what these services can and cannot do. Identity theft protection services monitor public records and your credit reports for suspicious charges and usually help you fix the problem if you are a victim. These services can't catch all signs of fraud -- such as someone accessing your bank account -- and you may already have some protection from your bank or credit card issuer.