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You may have received a letter from the company. You may have heard it on the news. They are all familiar names– CitiFinancial, DSW, Bank of America/Wachovia, CardSystems, ChoicePoint. A company with whom you do business has had a breach in the security of its personal records. Someone out there now has easy access to your personal profile. The worst part is the anxiety caused by not knowing if sometime in the next year or two your credit information will be abused.
Today millions of people are on the defensive. The records of more than 46 million Americans were lost or stolen in the first half of 2005 due to corporate carelessness. Instead of losing our identities one-by-one, we are seeing criminals getting the information in chunks of millions at a time. Identity theft is the fastest growing crime of the century. In some cases, it is being conducted by highly structured criminal organizations.
The very technology that is supposed to makes our lives easier has made us easier targets. More than 20 percent of all identity theft cases involve telecommunications and the Internet (FTC). There are currently 7-10 million people each year who become victims of some form of identity theft.
Until victims can prove their innocence, they may face higher insurance rates and credit card fees. Identity thieves destroy the credit ratings of innocent victims who may not be able to get jobs, buy a new house, or get a passport until the matter is resolved.
There are two major types of identity theft:
1. Account takeover – thief acquires existing credit information and purchases products and services. Victims usually first learn of account takeover when the monthly statement arrives.
2. Application fraud – thief uses your SSN and other identifying information to set up new accounts in your name. The imposter may apply for a job, a loan, or buy insurance. Victims may not learn of application fraud for a long time because the thief has statements sent to another address.
Ways They Get Your Information. Aside from some corporate slips ups that basically hand over your information, thieves use some high- and low-tech means of learning everything about you including:
1. Dumpster diving – thieves go through trash receptacles at homes or offices for credit card documents, loan applications, or anything with a social security number on it.
2. Stealing from mailboxes – searching mailboxes for new credit cards, tax information, and investment reports.
3. Obtaining information from personnel or customer files in the workplace.
4. Accessing your credit report fraudulently by posing as a loan officer, landlord or employer.
5. “Shoulder-surfing” at ATMs and pay phones to gain access PIN numbers.
6. “Phishing” – obtaining information, usually by email, by claiming there is a problem with an account with a legitimate company.
Identity theft may be perpetrated by someone you know – a co-worker or someone at the company where you do business. They impersonate you, spending as much money as they can in as short a time as possible and then move on to the next victim.
You can help your clients, customers, employees, and your family by passing on information about ways to protect themselves, the newest scams (be sure to confirm that the scams are real), and what to do if they become a victim of identity theft.
Your Social Security Number is the Key. The brass key is your social security number (SSN). Do not print your SSN on your personal checks or use it as the ID number on your driver’s license. Be assertive in preventing a merchant from writing your SSN on a personal check that will be going through many hands before it is deposited.
If you suspect that someone is using your SSN fraudulently, call the Social Security Fraud Hotline at 1-800-269-0271. To find out if someone is using your SSN, check your Social Security Personal Earnings and Benefit Statement. You can get a copy by calling 1-800-772-1213.
Don’t get hooked by Phishing. Criminals have recognized the potential of cyberspace and are constantly finding new ways to use it.
Phishing is a technique used by thieves to obtain your personal information via the Internet or phone. You may receive an email regarding an account at an institution where you don’t do business or from an institution with whom you do have an account. Phishers attach company logos that look legitimate and state they are working to improve your identity security by confirming your identity details.
Many “phishers” are skilled at making you think they are concerned about your safety. The individual questions seem rather innocuous. But when all the pieces are put together, access to your accounts are but a click away.
The rule of thumb – when in doubt, delete. Banks do not use email to request changes or updates to confidential account information. Legitimate companies do not request a change of your PIN and/or password via email. Real companies do not state “if you are the rightful holder of the account, please fill in the attached form.”
Some recent examples are eBay and PayPal account verifications. These ask for very detailed credit information including bank account numbers. These emails may even threaten that your account or service will be discontinued.
When using the Internet, use caution.
• Don’t use debit cards to buy online. Always pay by credit card. Your maximum liability for unauthorized purchases with a credit card is $50.
• Don’t rush to enter that contest. Fraudulent marketers sometimes use contest entry forms to identify potential victims.
• Download programs only from web sites you know and trust. Read user agreements carefully.
The fact that nobody has made a complaint about a business or organization does not mean that it is legitimate. Fraudulent operators open up and close down so quickly that there is no time to register a complaint.
Freeze and Thaw – A New form of Defense. Currently, only 10 states let consumers block access to their credit files by “freezing” the information. The information in your files is inaccessible to anyone who does not know the secret PIN number you select. The person applying for credit in your name is rejected because the lender can’t check you history.
If you need to apply for new credit or let someone run a background check on you, you can “thaw” the account for a specific group (i.e. mortgage lenders). The credit bureaus each charge $10 for a freeze and $10 for a thaw.
Congress is considering a law to allow credit freezes nationwide. The tradeoff is that the consumer waves the convenience of instant credit.
New scams occur everyday, some of them amassing millions of dollars for their “creators.” Some of the ongoing ones include:
• VISA/Mastercard – If you get a phone call from a VISA or Mastercard “employee trying to confirm unusual spending activity and that person asks for the code on the back of your credit card, do not provide that information. They may sound professional but may not be from that company. They are very detailed in their explanation of why they are calling and can be very convincing. Contact VISA or Mastercard Fraud numbers on your credit card to confirm they made that call.
• “Help move money from my country”– aka Nigerian 419 scam. While this has been around for a while, this scam still nets $100 million annually. The latest versions of this scam include a dying woman and a soldier.
• Free Credit Report emails – almost all of them are scams. Either the person is trying to get your SSN or will be billing your for a service later on. You already can get a one free credit report per year from each of the three credit bureaus.
• “Find Out Everything on Anyone” – This email is trying to solicit money in order to buy a CD or program you can use to find out information on another person. These are always public records and may be someone just trying to get your account information.
New Industry Develops for Stopping Identity . Millions of people are susceptible to identity theft through the “loss” of database tapes and hackers’ success at getting into personnel information. Companies are implementing plans to help consumers deal with these information leaks.
These plans give potential identity theft victims benefits such as regular credit-reporting monitoring and alerts, and reimbursement money spent on clearing up the fraud. They also offer step-by-step assistance by phone or special investigative officers. Some newer companies will contact the appropriate agencies for the victims and handle all of the legwork to clear up complications.
The plans not only help victims, but protect clients from lawsuits and damage to their image.
Some additional steps you can take include:
• Opting out of pre-approved offers of credit for all three credit bureaus. Call 1-888-567-8688. You may choose a two-year opt-out period or permanent opt-out status.
• Removing your name from marketing mailing lists. Write Mail Preference Service, PO Box 643, Carmel, NY 10512 or go online to www.dmacuncumers.org. Online opt-out program costs $5. It is free by mail.
• Removing your phone numbers from telemarketing lists, Call the FTC’s Do Not Call Registry at 1-888-382-1222 or register online at www.donotcall.gov.
• Check your credit report regularly. You can get one free credit report per year from each of the three bureaus:
• Experian 1-888-397-3742
• Equifax 1-800-525-6285
• Trans Union 1-800-680-7289
If you are in the military, you can place an active duty alert on your credit report. When you are away from your usual duty station, you can place an active duty alert on your three credit reports as extra protection. The alert remains on your reports for 12 months. Contact the fraud departments for the three credit bureaus.
If you are a victim of identity theft, act quickly. Report it immediately to all three national credit-reporting organizations, your local police department, and the FTC. Call creditors for any fraudulent accounts opened and notify them that you are not responsible for the accounts. If your ATM card or checks for a bank account have been lost or stolen, contact the bank and close the account. Back up all phone calls with a letter.
Just because you are asked for personal information does not mean that you have to provide it. Several years ago, a large medical group implemented an online program for its patients. One could go to the web site and get prescriptions refilled, ask the doctor questions, etc. This eliminated long waits on the phone or waits for call-backs in non-emergency situations. But the individual had to fill out a lengthy form that required a social security number. Even though the site was legitimate and “secure”, that request raised a red flag. The physicians already had this information on file in their offices. There were other ways to properly identify a patient.
Because so many patients called the office to complain about the request for the social security number and refused to use the online service, the item was removed from the web site form. Enough people spoke up to cause the change to be made.
Be aware of what information is being requested and do not hesitate to ask why. If you are uncomfortable with the information required, look into the reasons. You have the right to say no.
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