What is identity theft?
Identity theft happens when someone uses your personal information – like your name and Social Security number or your credit card number – to commit fraud in your name.
Identity thieves can do a lot of damage. They can use your identity to:
- Go on spending sprees using your credit card
- Open a new credit card account or sign up for cell phone or other services in your name
- Make claims on your health insurance plan
- Claim your tax refund before you do
- Commit crimes and pin the blame on you
Identity theft can cause lingering damage to your good name and credit standing, and cleaning up the mess can cost a lot of time and money. To mangle an old saying, that’s why an ounce of prevention can really be worth a pound of cure.
How to deter or prevent identity theft
How do thieves steal your identity? Unfortunately, there are a lot of ways, from high-tech (sophisticated computer hacking or phishing emails) to low (“dumpster diving” in your trash or plain, old-fashioned theft of your wallet or purse).
But you aren’t helpless to prevent identity theft. Making it difficult for thieves to get their hands on your personal information can reduce your risk. Here are some recommendations from the Federal Trade Commission (FTC), the nation’s consumer protection agency:
- Don’t give out personal information over the phone, through the mail, or over the internet unless you’re sure you know who you’re dealing with. Sometimes this is a judgment call
- Be careful with emails from strangers. Don’t open or download files or click on links in emails from someone you don’t know
- Be careful with emails asking for you to log in and update account information. Instead of clicking a link from the email, open a browser and go directly to the company’s website to log in and see if you have any account messages
- Don’t overshare on social media. Identity thieves can use your publicly posted information to guess passwords or the answers to lost-password “challenge” questions. Speaking of passwords…
- Use strong passwords and keep them private
- Safeguard your personal information in a secure place at home, especially if you have roommates or need to give any service providers access to your home
- Be careful when disposing of anything that could contain personal information. Shred financial documents and paperwork with personal information on it before you throw them out. Destroy prescription bottle labels. Delete personal information from old computers, cell phones, tablets and other personal devices
- Protect your Social Security number. Don’t carry your card in your wallet or write it on a check. If a business or organization asks you for it, ask why they need it, how it will be used, and what happens if you choose not to share it
- Stop pre-approved credit offers. Consider removing your name from the marketing lists of the 3 consumer credit reporting agencies – Experian, TransUnion and Equifax – to reduce the number of pre-approved credit offers you receive. Call 1-888-5-OPTOUT (567-8688) or go to optoutprescreen.com
- Stop other “junk mail” and telemarketing. The Direct Marketing Association offers Mail, Telephone and Email Preference Services, which allow you to opt-out of direct mail marketing, telemarketing and/or direct e-mail marketing from many national companies. Visit dmachoice.org for more information. The FTC also has a do-not-call list: Go to donotcall.gov or call 1-888-382-1222
Check out more recommendations at the FTC website.
Signs your identity may have been stolen
With identity theft, early detection is key. In addition to taking steps to deter identity theft, be on the look-out for suspicious activity by routinely monitoring your financial accounts and billing statements:
- Review your credit card statements and financial accounts carefully, looking for any charges you didn’t make
- Check your credit report regularly. Your credit report has information about you, including accounts you have and how you pay your bills. Experian, TransUnion and Equifax are required by law to give you a free copy of your credit report each year if you ask for it. You can get your free credit report at annualcreditreport.com, a central website run by these 3 companies
Here are some warning signs to look for:
- Unexpected account statements or credit cards you didn’t apply for
- Unexpected denial of credit or offered a much higher interest rate than expected
- Bills you expect to receive in the mail that no longer arrive
- Calls or letters about a purchase you didn’t make
- Inaccurate information on your credit report
- Bills from medical providers for services you didn’t use
What to do if you become a victim of identity theft
Act quickly to try to minimize the impact of the theft on your credit standing:
- Place a “fraud alert” on your credit report by contacting the fraud department at any of the 3 nationwide credit reporting agencies. A fraud alert tells creditors to follow certain procedures to protect you before they open new accounts or make certain changes to an existing account
- Request a copy of your credit report from each of the 3 credit reporting agencies. Review your credit reports carefully to see if any fraudulent accounts were opened
- File a police report and get a copy. Your creditors may require it for documentation. Plus, a police report will help you get information from creditors about the fraudulent accounts
- Close all the accounts that were opened or used fraudulently. After you speak to someone in the company’s fraud department about closing the account, follow up in writing and send copies (not originals) of the documents that support your claim. After you’ve resolved a disputed charge with a company, ask for a letter stating that the matter has been closed. Keep copies of everything and make a record of all your conversations with companies where accounts were opened or used fraudulently
- File a complaint with the FTC. Go to identitytheft.gov or call 1-877-ID-THEFT. Reporting your complaint can help law enforcement officials across the country with their investigations
The FTC provides more in-depth information about how to protect yourself from and mitigate the effects of identity theft at ftc.gov/idtheft.