The Scary News About Identity Theft
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Watch out! Recent scandals have revealed that your Social Security number is being bought and sold on the
open market by companies called "data brokers." It's outrageous, but perfectly legal.
How they operate: Data brokers collect personal information on individuals, including Social Security
numbers, drivers' license data and addresses. Big data brokers, such as ChoicePoint and LexisNexis, have
built files on almost every adult American, and they sell the information to employers making hiring
decisions, banks processing mortgage applications, landlords choosing tenants and debt collectors, among
others.
Problem: Some companies' database systems are far from secure. Over the past few months, thieves have
gotten their hands on the files of hundreds of thousands of people. It's relatively easy for a crook to get files.
Example: ChoicePoint recently sold more than 140,000 files to individuals posing as legitimate business
customers -- they were actually identity thieves.
Another frightening angle: Personal data is missing all over the place. Examples...
An attack on the fund-raising databases at Boston College may have exposed the Social Security numbers
and other personal details of more than 100,000 alumni.
Time Warner just announced that data on 600,000 current and former employees stored on computer
backup tapes was lost by an outside storage company.
While your files may have fallen into the wrong hands, that doesn't mean the thieves will use the data
fraudulently -- but they may. And you probably won't know they have done so until you receive collection
notices, see strange charges on your credit card bill or are denied credit.
What can you do to minimize the damage caused by this and other kinds of identity theft?
DAMAGE CONTROL
If you are victimized, go to the self-help section under "Victim Resources" at the Identity Theft Resource
Center Web site (www.idtheftcenter.org), or call 858-693-7935, to get fact sheets on such topics as victim
impact statements (your statement to the courts) and how to organize an action plan. Also contact the Federal
Trade Commission (877-438-4338, www.consumer.gov/idtheft) for help in resolving the financial fallout of
identity theft. The FTC will provide you with the fraud affidavits you must give to your creditors. Steps to take...
Contact each of the three main credit reporting agencies...
Equifax (800-685-1111, www.equifax.com).
Experian (888-397-3742, www.experian.com).
TransUnion (800-888-4213, www.tuc.com).
Tell the agencies that you have been a victim of ID theft. Also ask each to flag your files with a fraud alert... it is
good for 90 days. The alert tells credit issuers to contact you before issuing new credit. It can be extended to
seven years if you file a police report showing that you are a victim of identity theft with the three credit
reporting agencies.
When writing to a credit agency or anyone else with whom you must deal as a victim of identity theft, always
use certified mail with return receipt.
Report the crime to your local police department. This is essential for obtaining a fraud affidavit. It may make
it possible for the police to apprehend the thief. Give the police as much documentary evidence as you can,
including compromised credit card numbers and personal information that is being used by the thief, to the
extent that you know it.
Immediately contact all of your credit card companies -- by phone and in writing -- that may have been
involved to tell them that your name has been used fraudulently. The companies will ask you to fill out fraud
affidavits. While you're at it, it is a good idea to add passwords to all credit and banking accounts -- or change
your existing passwords, such as the PIN used to get cash advances from ATM machines with your credit
card.
Ask creditors to furnish you and your police department with copies of statements or other documents
showing the fraudulent transactions. You may not have received them because your mailing address was
switched by the thief.
If your existing credit cards have been used fraudulently, get replacement cards with new account numbers.
Ask that the old accounts be processed as "account closed out due to fraudulent activity."
If debt collectors come after you, tell them you are a victim of fraud and not responsible for the account. Follow
up in writing.
If your checks are stolen, report the theft to your bank and a check verification agency. Examples...
ChexSystems (800-428-9623).
TeleCheck (800-710-9898).
These agencies share information with banks to confirm you are a trustworthy customer.
Stop payment on outstanding stolen checks. Then cancel your checking and savings accounts and get new
account numbers.
Report the theft of your ATM card to your bank immediately, and get a new card, account number and
password. Do this even if you merely lost your card to prevent potential ID theft.
Notify other involved government agencies. For example, if a thief fraudulently tells the post office that you've
moved when you haven't, notify the local Postal Inspector. (To find the phone number of your local inspector,
call 800-275-8777 or go to www.usps.com.)
PREVENTION
It will take federal legislation to make the large commercial databases more secure, but you can decrease
your risk of more run-of-the-mill ID theft...
Check your credit report annually to make sure your credit has not been used fraudulently. By new federal
law, you can now get a free report from each credit reporting agency once a year. To obtain your free reports,
call 877-322-8228 or visit www.annualcreditreport.com.
Guard your Social Security number. Don't carry it with you. Don't put it on your checks, even if asked to by a
merchant. Exception: It may be mandated by a government agency. For example, the IRS requires it on tax
payments.
Destroy papers containing personal information. Buy a crosscut paper shredder, available at office-supply
stores for $40 and up.
Be suspicious of all phone and E-mail solicitations. Don't give private information over the telephone (or by
E-mail) unless you initiate the contact.
Use a locked mailbox to receive mail and from which mail can be retrieved only with a key.
Reduce the number of preapproved credit card offers so ID thieves can't use them for their own purposes. To
opt out of these offers, call 888-567-8688.
Apply for a credit freeze. If you live in California, Louisiana, Texas or Vermont, you can block credit-reporting
agencies from sharing information without your permission. It will inconvenience you when you want credit,
but it can be removed any time you want.
Obtain ID-theft insurance, offered by many major insurance companies, which provides reimbursement if you
suffer losses from ID theft. It also covers the cost of repairing credit, including postage and attorneys' fees.
Cost: $25 to $50/year for $15,000 to $20,000 in coverage.
PERSONAL IMPACT OF ID THEFT
The emotional impact of ID theft can have a profound effect on you and your family for a long time.
Psychological counseling may help you deal with the stress and anxiety commonly experienced by victims.
Know that you are not alone.
