by Thomas Rueger, CFP®
With the recent Equifax data breach, as well as the many other smaller, but no less damaging breaches, it is best to recognize that your personal data may have been exposed and could be in the hands of the bad guys who will either use it or sell it to someone that will. Because of this, we should all have a good working knowledge of what identity theft is, how we can try to protect ourselves from it, and what to do if we become a victim of it.
What Is Identity Theft?
Identity theft is a criminal act where someone steals your personal information, such as your name, address, or social security number, to commit fraud. The identity thief can use your information to fraudulently apply for credit, take money from your accounts, file taxes, or get medical services. These acts can damage your credit status and cost you time and money to rectify. Unfortunately, most people do not know that they are the victim of identity theft until they experience some adverse consequence such as: money taken from an account; unusual bills; credit collections; or denied loans.
What Can You Do To Protect Yourself from Being A Victim Of Identity Theft?
By far, the best and most important thing you can do, is place a credit or security freeze on your credit report. A credit freeze will prevent access to your credit information which stops anyone from using that information to open a new account. If you do apply for credit you will need to temporarily lift or remove the freeze so that your information can be accessed. To place a freeze, you will need to contact each of the 3 credit reporting agencies (see information below). There can be a $5 or $10 fee for each freeze placed or lifted. More details about a credit freeze can be found here: credit-freeze-faqs. Some other helpful ideas are:
- Guard your social security number (SSN). Don’t carry your social security card in your wallet or write your number on your checks. Only give out your SSN when necessary.
- Never respond to unsolicited requests (phishing) for personal information (your name, birthdate, social security number, or bank account number) by phone, mail, or online. Never use a link provided in an unsolicited email to access your account as a thief may be using that to retrieve your log on information.
- Collect mail promptly. Place a hold on your mail when you are away from home for several days.
- File your taxes early, before a thief can.
- Enable the security features on mobile devices, especially if you have contacts, banking websites and applications saved.
- Update sharing and firewall settings when you're on a public wi-fi network. Consider using a virtual private network, which can give you the privacy of secured private network. Even better, never log on to any of your financial accounts using a public or unsecured network.
- Monitor your credit card and bank account statements for unauthorized transactions.
- Shred receipts, credit offers, account statements, and expired credit cards, to prevent “dumpster divers” from getting your personal information.
- Install firewalls and virus-detection software on your home computer.
- Create complex passwords that identity thieves cannot guess easily. Don’t use names, birthdays, or other information that is easy to guess. Change passwords if a company that you do business with has a breach of its database.
- Review your credit report once a year to be certain that it doesn't include accounts that you have not opened. You can order it for free from Annualcreditreport.com. Since one free credit report per year is available from each of the three reporting companies, you can obtain a report every four months by rotating requests among them.
What You Should Do If You Become A Victim of Identity Theft
If you report identity theft online, you will receive an identity theft report and a recovery plan. You can create an account on the website to update your recovery plan, track your progress, and receive prefilled form letters to send to creditors. You can download the FTC's publication, Identity Theft: A Recovery Plan for detailed tips, checklists, and sample letters.
You may also choose to report your identity theft to your local police station. It might be necessary if:
- You know the identity thief.
- The thief used your name in any interaction with the police.
- A creditor or another company affected by the identity theft requires you to provide a police report.
In addition to federal government agencies, you should also report the theft to other organizations, such as:
- Credit Reporting Agencies - Contact one of the three major credit reporting agencies to place fraud alerts or freezes on your accounts so that no one can apply for credit with your name or social security number
- Equifax: 1-888-766-0008
- Experian: 1-888-397-3742
- TransUnion: 1-800-680-7289
- Financial Institutions - Contact the fraud department at your bank, credit card issuers and any other places where you have accounts.
- State Consumer Protection Offices or Attorney General - Your state may offer resources to help you contact creditors, dispute errors and other helpful resources.
Tax-related identity theft occurs when someone uses your Social Security number to get a tax refund or a job. You may not be aware of the problem until you E-file your tax return and find out that another return has already been filed using your Social Security number. If the IRS suspects tax ID theft, they will send a 5071C letter to the address on the federal tax return. Keep in mind, the IRS will never initiate contact with you by sending an email, text, or phone call that asks for personal or financial information. Watch out for IRS imposter scams, when someone contacts you saying they work for the IRS.
If you suspect you have become a victim of tax ID theft—or the IRS sends you a letter or notice indicating a problem—take these steps:
- Report this type of ID theft to the Internal Revenue Service and your state’s Department of Taxation or Revenue (state tax agency) .
- File a report with the Federal Trade Commission (FTC) – see information above.
- Contact your financial institutions, and close any accounts opened without your permission or that show unusual activity.
- Complete IRS Form 14039, Identity Theft Affidavit then mail or fax according to instructions.
- Continue to pay your taxes and file your tax return, even if you must do so by paper.
Finally, if you have questions, concerns or think that you may have been the victim of identity theft or if you need assistance with resolving a possible identity theft situation, please do not hesitate to contact a Relationship Manager at Vantage Financial for assistance.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. All data and information is gathered from accurate sources but is not warranted to be correct, complete or accurate. The sharing of this and all 3rd party links and resources is solely done as a courtesy to the reader and is not intended to imply support or agreement of the content. Vantage Financial Partners Limited does not promote, confirm nor necessarily agree with content provided by outside sources. The information, opinions and forecasts expressed in the referenced links are presented from unassociated parties and do not necessarily reflect the opinions of Vantage Financial Partners Limited.