Identity theft is a real crisis – and one that many Americans face on a regular basis. Essentially, this occurs when someone steals your personal information or impersonate you to engage in financial transactions or other fraudulent activity. It can lead to debt in your name. Reversing the impact of identity theft is not easy. The damage lasts long on your record and it can vary from damaging credit to defrauding you of thousands of dollars. The bottom line is identity theft can have a serious negative implication on your finances and can take you on a very stressful emotional rollercoaster.
However, the important thing to know is that there are organizations and tactics that can help you protect yourself from becoming a victim. These methods can also help you minimize the damage it can potentially cause you. In addition to protecting yourself from becoming a victim of this crime, it is important that you know what to do in case you are faced with this situation.
As a consumer, you have certain personal identification information that is unique to you. Your social security number, your credit card information, and even your name can be the source of your identity theft. If someone uses this personal information without your permission to commit financial fraud or other crimes then you are a victim of this crime. While it takes only a fraction of the time for someone to misuse your personal information it takes years of strenuous work to clear up the good name and credit. Therefore it is crucial that you safeguard your personal information at all times.
How Do Thieves Steal An Identity?
Skilled identity thieves may use a variety of methods to get hold of your information, including:
- Dumpster Diving. Rummaging through trash looking for bills or other documents with your personal information.
- Skimming. Stealing credit/debit card numbers by using a special storage device when processing your card.
- Phishing. Pretending to be financial institutions or companies and sending spam/pop-up messages to trick you into revealing your personal information.
- Changing Your Address. Diverting your billing statements to another location by completing a change of address form.
- Old-Fashioned Stealing. Stealing wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information.
- Pretexting. Using false pretenses to obtain your personal information from financial institutions, telephone companies, and other sources.
What Do Thieves Do With a Stolen Identity?
Identity thieves can misuse your information in numerous ways. Here are some briefly explained:
Credit Card Fraud: This is very common among the many fraudulent activities.
- Opening new credit card accounts in your name. Once they open the new accounts they will rack up huge amounts of debts and will not pay the bills. Delinquent accounts will appear on your credit report impacting negatively on the health of your credit.
- Some may even change the billing address. This way you may be completely unaware of the due payments under your name unless you keep a constant check on your credit report. Because your bills are now sent to a different address, it may be some time before you realize there’s a problem.
Phone or Utility Fraud:
- Thieves may open a new phone or wireless account in your name, or run up charges on your existing account. Keeping a close eye on your detailed bills is, therefore, crucial to avoid these situations.
- They may also use your name to get utility services like electricity, heating, or cable TV. Utility bills are considered evidence to prove residency in most cases. If you are a victim of such fraud this may even lead to bigger fraudulent cases.
- Identity theft can occur by creating counterfeit checks using your name or account number. These can be used in expenses that may be illegal. Even if they are not illegal, you can still have serious financial damage.
- They may open a bank account in your name and write bad checks.
- Thieves may clone your ATM or debit card and make electronic withdrawals in your name, draining your accounts.
- They may take out a loan in your name without any intentions of repayment.
All of the above actions can instantly make a dent in your financials. Depending on how the fraudulent accounts are used, you may be subjected to criminal charges and/or have serious implications on your overall financial record.
Government Documents Fraud:
- Thieves may get a driver’s license or official ID card issued in the victim’s name using their own photo.
- They may use your name and Social Security number to get government benefits.
- Thieves may file a fraudulent tax return using your information.
- Thieves might get a job using your Social Security number.
- They may rent a property or get medical services using your name.
- Thieves might also give your personal information to the police during an arrest. Their failure to show up for their court date then results in a warrant for your arrest.
Unfortunately, nothing can guarantee that you won’t become a victim of identity theft. Therefore, your objective should be to make it difficult for anyone looking to steal your identity. Your personal information must always be protected. ACCC details the following actions as ways to minimize your risk of Identity theft.
Protect Your Social Security Number
Change your Social Security number on your driver’s license to a State Identification Number. Also, remove your Social Security card from your purse or wallet and do not write or print your social security number on your checks. If you have to provide your number for anything, offer only the last 4 digits and request that your number be taken off any loan applications.
Protect Your Credit Cards
Carry your credit cards separately from your wallet and void any incorrect receipts. Report any questionable charges in writing and send them by registered mail to the credit card companies. Keep a secured copy of all account numbers and sign any new cards you receive. Never leave your credit cards unattended and protect all accounts with a password. Destroy account numbers on discarded cards and cut through account numbers.
Protect Your ATM/Debit Card
Review all monthly statements for accuracy and report any discrepancies you may find. Check account activity regularly and do not carry your pin number on your person. Be alert for “peering eyes” when making a purchase and do not leave ATM receipts behind.
Protect Your Financial Documents
Shred all personal information in a shredder whenever possible and do not carry extra cards or identifying documents.
If you are struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today!