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Identity
Theft – A Financial Risk to Take Seriously By
Gregory J. Cook, EA, CPA Author Identity
theft is a growing criminal activity, affecting thousands of Americans each
year. How serious is this crime? It topped the list of consumer complaints in
2002 according to the Federal Trade Commission. The FBI estimates between
500,000 and 700,000 Americans are victims of identity theft each year. Identity
theft involves a criminal using your personal information, such as your name,
Social Security number, credit card numbers, driver’s license or telephone
number, without your permission. Thieves obtain your information from a variety
of sources: a stolen wallet, your mail, your trash, the trash of a business and
even from your home. Thieves commonly use this information to open new accounts
for credit cards and cell phones. Unbeknownst to victims, the thieves run up
large bills and leave them unpaid. The victim is left with large debts and a
damaged credit report. Some thieves have even gone so far as to obtain
mortgages and create counterfeit checks. Once you’ve
been a victim of identity theft, the consequences can be far-reaching. Victims
of identity theft may spend a significant amount of time trying to repair the
damage. As a victim, you would need to close affected accounts, correct credit
reports, open new accounts and possibly even obtain a new Social Security
number. A common
result of identity theft is a damaged credit report. This can dramatically
affect your ability to obtain a loan and may even play a factor in being hired
for a new job. Banks may refuse to offer you a loan, or may give you a loan
with a less desirable rate or terms. Employers are able to pull your credit
report during the interview process and may use a negative credit report as basis
for not hiring you. What Can
You Do? There are several steps you can take to help protect yourself from identity theft: · Place documents with personal information in a safe, out of sight location, especially if you have people doing work in your home or if you have a roommate. · Consider investing in a paper shredder. All those offers for credit cards and home equity loans are easy ways for thieves to open accounts in your name. · If your mailbox does not have a lock on it, consider mailing bills or any correspondence that contains account information from a post office. · Don’t carry more personal information than is necessary. If you can, only keep one credit card in your wallet and avoid carrying your Social Security card. · Review your credit report on an annual basis. You should obtain your credit report from all three of the major credit reporting bureaus. In some states, you are entitled to a free copy of your report each year. · Do not include your Social Security number on your checks or share your number with anyone who does not need to have it. You’re a Victim – Now What? If you’ve discovered that you are a victim of identity theft, you should immediately contact the police. You need to file a police report in order for the authorities to begin their investigation. Plus, you will use information from this report to help close accounts and clear up your credit report. After you’ve reported the theft to the police, the next step is to contact the three major credit reporting bureaus, your credit card companies and banks. With each of the credit bureaus, ask to have fraud alerts placed on your accounts. You can even ask that they mark your record as not able to open new accounts without contacting you directly. Make sure you document all conversations and ask for a copy of your credit report. You are entitled to a free copy of your report in instances of identity theft. This will help you to find fraudulent activity. If you have affected credit cards or bank accounts, contact the credit card company or bank immediately. Have the accounts closed and labeled “closed at customer’s request.” You can be assigned new account numbers with the same company. If you have other accounts that were not compromised, you may want to have a hold placed on them to assure that no future damage is done. Useful contacts: Credit Bureaus: Equifax (800) 525-6285 – To report fraud (800) 685-1111 – To order credit report Experian (888) EXPERIAN (397-3742) TransUnion (800) 680-7289 – To report fraud (800) 916-8800 – To order credit report The Federal Trade Commission (FTC) ID Theft Data Clearinghouse (877) IDTHEFT (483-4338) Word Count: 701
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© 2006 Bara Business & Investment Group, Inc. All rights reserved. |