How To Protect Yourself Against Identity Theft
You must have heard scary stories about identity theft. They usually have to do with someone assuming your identity, spending your money, taking out loans in your name, etc. Today it may seem as though this problem is far away and won’t happen to you. However, unless you take certain steps to prevent identity theft, you are just as much of a potential victim as the rest of the law-abiding citizens out there. Learning all you can about this crime can help you protect yourself and your family from a disaster.
What Is Identify Theft?
Identity theft is a serious crime, the consequences of which can be very hard to reverse. A criminal obtains your personal information, such as name, address, date of birth, social security number, and bank account details. Once this information is readily available, a thief has everything necessary to wreak havoc on your financial and personal life.
How Does Identity Theft Work?
Once a thief has all your personal information, he or she can do the following things:
- Apply for a loan and/or credit card.
- Take control of your existing bank accounts and withdraw funds.
- Have credit card bills sent to another address. Meanwhile, the credit card company thinks you are not paying your bills and your credit history is ruined.
- Open a new bank account.
- Create fake identity documents.
- Apply for new identity documents using a photograph of another person.
- Get a new driver’s license with your name and a new photograph and fail to pay tickets.
- Claim tax refunds in your name.
- Use false identification to commit crimes in your name.
- Open different service accounts in your name (phone, the internet, social media).
The above points are described in the Identity Theft And Assumption Deterrence Act. This law was passed in 1998 in order to protect people from identity theft by creating specific punishment guidelines for thieves. The punishment varies from one-year probation to 15 years in prison, depending on the severity of the crime.
A victim of identity theft may be mistakenly prosecuted for a variety of crimes and end up with a ruined credit history while being robbed of hard-earned money.
How to Identify Identity Theft
The victims of identity theft usually have all the tools to detect the problem when it’s just starting to occur. It’s important not to miss the initial signs of identity theft in order not to let it advance any further.
- You Have an Extra Account on Your Credit Report
How it happens: Carelessly skimming through your credit report can lead to unfortunate consequences since credit cards are the easiest way to get money after stealing your identity. Don’t think that it’s the credit card company’s mistake, which can be fixed in the future. Chances are this is a sign of identity theft.
What to do: Even if the extra account seems clean and doesn’t have bad payment history, don’t ignore it. Start a dispute to have it deleted from your report and make sure to call the credit card company to block the card and report fraud.
- You Get A Loan Or Credit Card Rejection
How it happens: If you have a good credit history and expect to be approved for a loan, credit card, or any other service but suddenly get rejected, you may be a victim of identity theft. As mentioned previously, the thief may create bank accounts and get credit cards, which can end up ruining your credit history.
What to do: If you receive an unexpected rejection, make sure to request a reason. A lender must tell you if the rejection is due to the data received from your credit report. If such situation occurs, make sure to request the credit report immediately. Scan it thoroughly to check for extra accounts.
- You Don’t Get Credit Card Bills On Time
How it happens: Using the stolen personal information, identity thieves may change your address and reroute your mail there so you will miss the obvious identity theft signs. If you stop getting your credit card bill or any other bills on time, then you might be a victim of identity theft.
What to do: As soon as you notice the problem, call your credit card company to check that no address change has occurred. In case, the problem is not an address change then make sure your mailbox is secure enough so the bills can’t be stolen.
- You Get Strange Credit Card Bills
How it happens: When a thief steals your identity, he or she won’t necessarily go as far as changing the address. This means, in a while, you may be getting bills for credit cards you never opened. This is one of the most obvious signs of identity theft.
What to do: Contact the credit card issuer immediately to report the problem. Let them know that you believe you are a victim of identity theft. Order a credit report to check for other fraudulent accounts.
- Your Account Gets Flagged
How it happens: Most credit card companies have a protection service, which activates a red flag whenever there is a suspicious and/or irregular activity on the account. In some cases, this flag automatically blocks your card. However, you may just get a notification via email.
What to do: Call your credit card company immediately to confirm that the activity wasn’t initiated by you. Make sure to tell them that you suspect identity theft.
- You Get Calls From Debt Collectors
How it happens: Identity thieves manage to accumulate debt extremely fast. In just a few weeks after the identity theft has occurred, you may start getting calls from debt collectors. Don’t automatically assume that a mistake has been made or someone is playing a joke.
What to do: Explain that you believe that you’ve become a victim of identity theft. Write a letter to the debt collector telling them to stop calling and explain the situation. Contact the company that originally opened the account to dispute the debt.
- You Get Strange Medical Bills
How it happens: The thieves can use your identity to obtain medical treatment. Or they may use your insurance to get certain services which you may be refused in the future.
What to do: Pay close attention to your medical bills. Don’t assume that a mistake will be fixed automatically by the health care provider. Contact your insurance company immediately.
How to Prevent Identity Theft
While there are many companies that offer ID protection services, there are things you can do on your own to prevent identity theft.
- Don’t Give Out Your Personal Information Online
Filling out forms on websites and sending your information over email is not secure. Be very careful about sharing your name, address, credit card, and social security numbers on the websites that don’t have an “s” after “http.” “Https” websites are more secure. Meanwhile, truly secure websites have a small lock icon at the beginning of the URL.
- Choose Credit Cards over Debit Cards
Most of the time, credit cards have much more protection than debit cards. Try to use them, especially when you go abroad. Ask your credit card issuer about alerting and flagging services for irregular activities on your card.
- Check Your Credit Report Annually
Make it a habit to check your credit report on a yearly basis. The earlier you notice a problem on the report, the easiest it may be to fix. You have a right to order one free credit report from 3 major credit-reporting agencies (Equifax, Experian, and TransUnion) once a year. Make sure to use this right.
- Create Strong Passwords
By stealing a password to any of your social media, email, or even an online store account, the identity thief can get enough information to proceed further. Never use the same password for several accounts.
In some cases, passwords can be changed if you give the right answers to the security questions. When setting up these security questions, never use anything simple, such as your mother’s maiden name since it’s easily accessible information.
- Shred Your Financial Papers Before Throwing Them Out
Identity thieves love going through the garbage. It’s the best place to find out about your personal life, account details, and social security number. Make sure to shred the papers before throwing them into the garbage or at least mix them with such unpleasant smelling stuff as kids’ diapers or spoiled food.
While the modern bank and credit card safety measures are making it harder for identity thieves to do their illegal activity, people themselves make it easier by being careless. If you have even the smallest suspicion that you’ve become a victim of this crime, make sure to act upon it immediately. Simple preventive actions can keep you and your family safe.