Tips to help you avoid becoming a victim of identity theft.
A victim of Identity theft can spend many months and sometimes years correcting the damage done by fraud caused by the theft of information associated with their bank accounts and credit cards. Just getting a credit rating corrected can be a nightmare. Take the following advice to protect yourself against identity theft.
True Identity theft occurs when someone acquires your personal information such as your Social Security ID number or bank account or credit card numbers and uses that information to "impersonate" you, thereby stealing and using your identity for their own personal gain.
The most common use is for financial gain. It is common for identity thieves to do one or more of the following:
- Steal credit card numbers to purchase goods for themselves or others
- Divert money from someone's bank account to their own or cash a falsified check
- Intercept and open an unauthorized credit card from your mailbox
- Take out unauthorized bank loans using your information
On occasion, very intricate schemes are used by criminals to pass the stolen personal information on as their own to obtain employment, take out insurance policies and even rent property or qualify for a mortgage all in the victim’s name.
How do they get away with such atrocities?
- Obtaining personal ID information online – Common identity theft scams utilize a process called ‘phishing’ by sending out email messages that pretend to be from real financial or other online organizations in order to acquire sensitive account information. Computer servers at large institutions are often targets for hackers as well. Online shopping / E-commerce websites lacking adequate security safeguards can be a risk as well.
- Soliciting personal information by phone calls – If you did not make a phone call yourself, you should never give any of your private data to a caller. Any legitimate financial institution or business would never ask someone to provide such information over the phone.
- Theft of physical documents the information in them – Often an identity theft case results from lost or stolen personal items such as a wallet or purse. To prevent misuse, merchants may require a Social Security number or other credit information on a written applications—these documents can be stolen and identity thieves then use the information in them. For those thieves who are truly inspired, ‘dumpster diving’ (rummaging through garbage cans and dumpsters) can often provide an opportunity to collect financial information discarded by people.
- Theft or 'borrowing' hardware – Laptops, tablets, smart phones and thumb drives are all electronic data storage devices and they can be a very good source of personal identity information.
How does ID theft impact someone?
When Identity Theft occurs, the time it takes to determine the extent of fraud, and the processes involved to correct the misinformation can take months or years. Everything from having to close bank accounts, re-negotiate financial contracts and even hire attorneys to broker the operations can be necessary. During that time, the victim can be left to deal with lower credit scores, making it difficult or impossible to obtain new credit, qualify for loans or sometimes even finding employment.
Can I get Identity Theft Insurance?
Most credit cards, after the card has been reported as missing or stolen, will hold someone liable for a stated amount of the fraudulent charges (see your credit card agreement fine print). Some Homeowners insurance or renters policies may offer some limited amount of protection for the loss of cash or credit cards (again, see the fine print on the policy).
With those things being possible, it remains a fact that identity theft involves far more than just financial loss. The consequences such as damage to personal credit and reputation that can take large amounts of time and expensive professional expertise to correct are difficult to deal with. For that reason, often companies provide insurance products that not only cover costs associated with recovery from identity theft, including "restoration" services designed to expedite the process.
There is a great deal of variance in policies from insurer to insurer and also by state. Coverage / Service provided could include:
- Provision of a consumer fraud specialist.
- Replacement of government issue ID
- Assistance in civil judgments, criminal cases, audits or hearings associated with fraud by the ID thief
- Services provided to help victims reclaim their identity and restore credit ratings
- Coverage for attorney's fees
- Provision of reimbursement of administrative expenses
How to prevent or avoid becoming a victim of identity theft
- Carry only the minimum amount of personal info in a purse or wallet that is necessary. Carry only minimal credit cards. Don't carry your social security card or your passport unless it is absolutely necessary.
- Keep a list of all your credit cards, account numbers and the emergency toll free numbers for each to make reporting lost or stolen cards easier and faster. Keep this document locked up securely.
- Keep all stored statements locked away securely.
- Use caution when using your credit card to make purchases. Make it a habit to keep your wallet secured in your hand until your card is returned to you. Shield your card with your hand when entering PIN numbers . Always try to be aware of who is around you if you give out personal information verbally.
- Never leave or throw away a credit or ATM receipt. If you leave them on a counter or put them in shopping bags, they might get picked up by someone.
- Never give out any personal information on the phone, through the mail or over the Internet. Unless you initiated the contact via a known contact point, you cannot be sure you know who you are dealing with.
- Shop online with extreme caution. You should use only secure, authenticated websites for online purchases. When making a purchase online, be sure to look for the locked padlock image displayed by your browser’s status bar or even better, look for "https://" (rather than http://) in your browser's URL window—the "s" indicates a higher level of security. Do not make online purchases if you have any concerns about the authenticity of a web page.
- Always remain hyper aware of 'phishing' and 'pharming' scams. Using these techniques, criminals create sometimes very realistic but fake emails and websites what mimic sites from legitimate organizations. Use extreme caution when opening any email not originating from someone you know personally. Do not open attachments or reply to FB messages from unknown sources. You should never, under any circumstances give out personal, financial or password related information via email or on social media sites.
- Always keep your computer security and antivirus programs up to date. Using firewalls, anti-spyware and anti-virus programs is a must.
- Regularly monitor all of your accounts. You cannot afford to depend only on the credit card companies or banks to detect suspicious activity on your accounts. Carefully review all your bank and credit card statements to be sure you recognize all transactions and that they are accurate. Should you see a questionable transaction, don't delay and contact the credit card company or bank immediately.
- Order copies of your credit report and review for errors. Preferably, get one from each of the three major credit reporting bureaus (Equifax, Experian). By law, you should be able to get at least one for free, and many banks and other financial institutions provide them as a service to their customers.
- Credit reports contain information about where you work, have worked and residences you have or have had, past and present credit accounts opened in your name, your bills payment habits, criminal actions, and bankruptcy activity. You should regularly make sure credit reports are explicitly accurate and do not include activities you did not authorize.
- It is possible, and sometimes advisable to place fraud alerts with the major credit bureaus. Setting up a fraud alert will ensure that creditors will have to contact you before opening any new accounts making any changes (such as address updates) to your existing accounts. This will make it significantly more difficult for an identity thief to set up accounts in your name. If you set this up with just one of the credit bureaus, by the letter of the law, the bureau you contact is then required to update the other two. Be aware however that setting up a fraud alert can make processes like buying a car, or getting a lease or mortgage difficult for you as well, as it introduces a lot of red tape to the process.
- ALWAYS use secure passwords for your credit card, bank and phone accounts. It is advisable that you do not use information such as your mother's maiden name, your birth date, any part of your Social Security number or phone number, or names of a spouse or children as part of your password. It is recommended that you change your passwords regularly, and do not use the same password for multiple accounts. In the event you suspect a problem with a credit card or bank account, change your password and contact that entity.
- Either burn or shred documents containing personal information before you dispose of them. This includes credit card or bank statements, charge receipts or credit card applications.
What should you do if you think you've been victimized by an identity thief?
If your personal information has been compromised in any way; a stolen wallet, credit cards or maybe a phishing scam, you should report it immediately to the credit card companies, banks and other financial institutions. You should also report it to the police. It is a crime! You should obtain a copy of the police report to use for filing an insurance claim.
In the event you are a victim of a phishing scam or other electronic incident, immediately report the incident as above, and submit a fraud alert to a credit reporting company.
To learn more about any potential large scale data breaches and privacy issues, check out the non-profit Privacy Rights Clearing House.
Identity theft incidents or attempts should also be reported to federal agencies that monitor them, such as the FBI Internet Crime Complaint Center and the Federal Trade Commission (FTC) Consumer Information Identity Theft. These agencies can provide further advice and assistance.
These tips were inspired by the article "Identity theft insurance - Steps and advice to help protect you from identity predators." www.iii.org.
Please call us at the Liveoak Agency to discuss your current insurance policies, and any changes that might be necessary!