What is Identity Theft?
Identity theft occurs when someone gains access to another person’s personal information and uses it for their own personal gain. Most identity theft crimes are financially motivated so any information that could potentially allow access to your finances is vulnerable. This includes your social security number, bank account number, credit card information, your telephone number and even your address. Identity theft can be as simple as someone using your credit card to make purchases or as extreme as assuming your identity completely.
How Does Identity Theft Occur?
Identity thieves can get access to your personal information in a myriad of different ways. These include:
- Stealing mail
- Copying down or taking pictures of your information in a retail transaction
- Data breaches at companies that have your information
- Stolen wallets or purses
- Documents thrown in the trash by you or a business that has your information (dumpster diving)
- Computer viruses
- Intercepting data from insecure networks or sites
- Overhearing or hacking into phone conversations
- Pretexting, meaning use false pretenses to get your personal information from companies that have it (financial institutions, utilities, etc.)
Changing your address through a change of address form in order to divert billing statements from your home to an address the thief controls
How can I tell if my Identity has been stolen?
If you see suspicious transactions on your credit card or bank statements, receive billing or collection notices in the mail regarding credit you did not apply for or see a drastic drop in your credit score, you may be a victim of identity theft. Additionally, obtain a copy of your credit report, which is updated monthly, and check for any suspicious activity.
What Do Thieves Do Once They Steal My Identity?
Identity thieves continue to come up with new ways to benefit from your stolen identity. The most common thing an identity thief does is open up a new account in your name. This can be a credit card account, a bank account which they use to write bad checks, a phone or wireless phone account, or a utility account such as heat, electricity or television. The thief then racks up charges in your name and never pays them, leaving creditors to come after you. Another common tactic is to take out a loan in your name for something like a car or even a house. Identity thieves also commonly use your identity in dealings with the government. The purpose of this can vary from receiving benefits in your name (such as Social Security, or even a tax refund) to avoiding prosecution by giving police your information when arrested. Of course, when you don’t show for the court date, a warrant is then issued for your arrest! We could go on, but suffice it to say, there are hundreds of ways for an identity thief to benefit from using your personal information.
What can I do if my identity has been stolen?
There are several steps that must be taken when you’re a victim of identity theft. The first is to contact one of the three credit bureaus — Equifax, Experian and TransUnion — and request a fraud alert and credit freeze be placed on your account. You should also update your contact information. This step provides you with access to a free credit report from each of the credit bureaus. The next step is to file an identity theft report. First, victims must file a complaint with the FTC, which can be done at ftc.gov/complaint, to create an identity theft affidavit. With this document in hand, you must then file a police report to create an identity theft report. Once these initial steps are taken, the process becomes more arduous and stressful, as it involves contacting banks and other financial institutions to dispute fraudulent charges.
What rights do I have as a victim if my identity is stolen?
The rights of identity theft victims are as follows: – You have the right to issue a fraud alert for your credit report, which will be in effect for 90 days. – You’re granted access to a free credit report once a fraud alert has been issued. – You can file an identity theft report with the FTC and your local police department. – Once an identity theft report has been created, you can extend the fraud alert to last seven years. – You can block fraudulent information from appearing on your credit report. – You have the right to obtain the information the thief used to create false accounts under your name. – You have the right to dispute fraudulent transactions and prevent banks and debt collectors from going after you for any fraudulent debt.
Should I invest in identity theft protection services?
Identity theft protection services offer the greatest piece of mind in a digital world. While you can remain vigilant and practice safe habits when it comes to your personal data, it never hurts to have someone else constantly reviewing your credit report and financial activity for signs of fraudulent activity. In the event your identity is stolen, the company will provide you with the help needed as you go through the steps of fighting the theft, from issuing a fraud alert to clearing fraudulent transactions from your credit report. It’s a piece of mind many consider to be worth the investment.
What is lost/stolen wallet protection?
Stolen wallet assistance is a service provided by identity theft protection services that provides staff to step in and cancel your credit cards with each bank or lending institution that you have so that you can replace them. They normally also have the ability to help you navigate replacing your personal identification.
How does theft insurance and guarantees work?
Many identity theft protection services offer a service warranty or guarantee of around $1,000,000. This means that if your identity is stolen while you are a subscriber, the identity theft protection service will spend up to $1,000,000 in order to restore your identity. These guarantees do not cover funds that are stolen from you, only the out of pocket cost of restoring your identity. Identity recovery expenses can include such things as legal fees and, in certain cases, lost wages.
What type of identity theft protection is right for me?
There are basically three different types of fraud monitoring: credit report monitoring, automated credit bureau fraud alert settings, and public record monitoring. We think all three types are very valuable and most services offer some combination of all three of these types.
Credit report monitoring is the most well known and is the most established type of monitoring. There is no way of doing this type of monitoring yourself for free. Credit report monitoring is very effective since the most common type of identity theft is opening a new credit account in your name and when that happens it will show up on at least one of your credit reports.
We recommend monitoring all three bureaus. Only monitoring one bureau may cause the possibility of an account being opened and reported to one of the other bureaus that you aren’t monitoring. Setting fraud alerts with the credit bureaus means that there is a note placed on your credit file telling any company that is opening a new account with your Social Security number to confirm your identity, usually by calling a phone number you provide. In theory, this is a very good and proactive way to prevent identity theft, preventing an account from even being opened rather than catching the account after it’s opened, but in practice there have been some problems with implementation.
The other issue has been that it is actually quite easy to set fraud alerts yourself. You only need to set them at one bureau as each bureau must by law contact the other two bureaus to set fraud alerts with them once you have placed the alert with the first bureau. The only catch is the alerts only last 90 days so if you are going to set them yourself and want continuous coverage, you need to reset them every 90 days.
Finally, public record/black market monitoring covers fraud monitoring done outside of your credit file so is a bit of a catch-all for many types of monitoring. Since many types of identity theft do not require access to your credit file, this type of monitoring is very important.
While it is theoretically possibly to do this type of monitoring yourself, in practice it is not practical to monitor the thousands of different public records databases or find and keep up to date on the black market sites and chat rooms where stolen information is traded. So it basically comes down to how much time and effort you want to do on your own and what you are willing to pay a 3rd party company to be completely protected.