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5 Things to Do to Prevent Identity Fraud

Issue No. 16

Keep an eye on your credit.

The most important thing to do to prevent identity theft is to keep an eye on your credit report. Every time you open a credit card, apply for a loan, open a bank account, sign up for utilities, or do anything that requires good financial standing, the credit bureaus know about it. Then, every time you pay or don’t pay your bills, the credit bureaus know about it. And if something is amiss with your credit, for example, if after 20 years of never missing a payment on any bills, you are defaulting on loans, missing utility payments, and running up and not paying huge credit card bills, the credit bureaus know about it. Unfortunately, they don’t inform you automatically of this unusual activity. Not only do the credit bureaus know about your financial situation, they also know where you live, where you used to live, if you got married, got divorced, changed jobs, got sued, filed for bankruptcy, or were arrested. Much of your life is stored in a credit bureau database.

If you review your credit report periodically, you can spot errors such as incorrect information, fraudulent charges, addresses you’ve never lived at, or accounts in your name that you didn’t open. Once you find an error, you can work on correcting it. The earlier you fix the error, the better chance you have of not having the fraud spread. But if you don’t watch your credit report, fraudulent behavior may go on indefinitely until you get another sign that something is wrong, such as no money in your bank account, bill collectors at your door, or the most frequent sign, being denied for a loan. The FTC and other authorities suggest you check your credit reports once a year if you are not having problems and more frequently if you have been a victim of fraud. But if you are applying for credit, especially for a loan for a new house or car, when you are about to close is not a good time to find out there is a problem with your credit report. Be pro-active and order your credit reports every six months, as a lot can happen in one year’s time.

There are three major credit bureaus that track credit, and you can show up in all of their databases. Often, as you clear up fraudulent information in one, the next one gets the same information, and then sometime later, the third agency gets the information. The three credit bureaus are Equifax, Experian, and TransUnion. Just as the web has helped to enable identity theft, the web can help you get your credit reports online, at any time. You don’t have to wait until Monday morning at 8 am if you are concerned about your credit rating Saturday night at 11. The reports are available for about $9 each, and the different companies have options where you can pay one fee and get all three reports. If you don’t want to be concerned with remembering to constantly check your credit reports, the credit bureaus also offer services for a fee that inform you with weekly email updates about your credit activity and provide quarterly access to your credit reports.

Keep an eye on your account statements.

While keeping an eye on your credit report can require some inquiry from you, your credit card, debit card, bank account, and bill statements should all arrive in your mailbox or on your computer without prompting, and you should immediately review each account in detail. If there is fraudulent activity on these statements, and you act quickly enough, you can correct the problem and have limited liability.

Credit cards limit your liability to $50 per card for fraudulent activity.

Liability for fraudulent activity on your ATM card, if you report your card lost or stolen within two business days, is limited to $50. After two days, but within 60 days after you receive a statement showing the fraudulent activity, you can be liable for up to $500. After 60 days, you can be liable for the entire amount of the fraudulent activity.

Examine every bill and account statement quickly and thoroughly and report any discrepancies immediately. This diligence will also pay off as you can catch instances of cramming where you suddenly start getting billed for services you didn’t order. If a statement or a bill is late, call the company to make sure it wasn’t intercepted. After all, when was the last time the electric company was late in sending you a bill?

Examine bank statements closely including looking at every cancelled check to make sure it is one that you wrote. One particular scam includes taking the last few checks out of a checkbook, but not actually stealing the checkbook. Most people don’t notice that the last few checks are missing until they get to the end of the checkbook.

Protect your wallet, your computer, your mail, and your home.

Where do thieves get your personal information? The most obvious cases are in your wallet or purse when your wallet or purse is stolen or from a computer when a thief hacks into your computer or a database with your personal information in it. Try to keep only the minimal amount of information in your wallet or purse, including limiting the number of credit cards, bank cards, debit cards, and insurance cards. Don’t keep your social security card in your wallet at any time. Keep a list of the cards in your wallet along with account numbers and 800 numbers so you can call immediately to report stolen cards.

Protect your computer information with firewalls, virus protection software, and passwords. See Issues No. 11, No. 14, and No. 15 of Info Point for additional information about safeguarding your computer.

Snail mail is a great source of personal information. All those bills and statements you receive may have quite a bit of personal information about you, such as your name, address, date of birth, and social security number. Make sure you get your mail out of your mail box promptly. Immediately notify the post office if you stop receiving mail, as thieves can submit a false forwarding order for your mail and collect it themselves. Think twice about leaving outgoing mail in your mailbox all day, especially if your mail is picked up late in the afternoon. If you are going away, have the post office hold your mail until you return.

If you need to throw out any papers with personal information, make sure you shred them first, as “dumpster diving” is a popular activity for thieves looking for credit card applications with your name on them along with additional personal information on un-shredded trash. Be especially careful at the office, as dumpster diving at a business often can be quite lucrative.

Be careful when you are having service work done in your home or employ outside help. The bank statement, health insurance claim, and credit card offer that you leave lying around can quickly become information for a thief looking for a new identity.

Use passwords and PINs.

Whenever you can use a password or a PIN, do so. Put passwords on your computer, on your online accounts, on your voicemail, and on your credit and debit card accounts. Make sure these passwords are not obvious such as your name, your child’s name, your pet’s name, your phone number, your date of birth, a string of sequential numbers, or your mother’s maiden name. Use a combination of letters and numbers and don’t use the same password everywhere. Make sure you don’t keep the password or PIN with the account for which it is used. A PIN is no good if it is written on the back of an ATM card.

Keep your information to yourself.

Legitimate companies will not request personal information via email, over the phone, or via mail. If you get a phone call or email or snail mail requesting personal information, contact the company either by phone or their web site and ask them if they requested this information. Often, if a company’s name is being used in a fraud scheme, their web site or even their customer phone greeting will tell you about the scam. If the company contacted you, that is, you didn’t start the communication, be suspicious. Identify thieves often pose as bank, Internet provider, insurance agency, or financial company employees to try to get your information via unsolicited contact.

When you do need to give personal information to a company that you have contacted, for example, when signing up for a health club membership, ask if you can give less personal information for company files. For example, rather than using your social security number as an ID, ask if you can use a different number, perhaps your driver’s license.

Identity theft can happen to anyone. The next time you are waiting for a meeting to start, ask if anyone in the room has been a victim of identity theft. You might be surprised how many people answer that they have been.