Posted by: thecreditmaven | August 19, 2008

A Tool To Prevent Identity Theft

Identity theft happens when a individual’s personal information (i.e. social security number, bank account information, credit card, etc.) is used unknowingly and without permission to commit fraud and other illegal activity.

Let me ask you some questions: 

  • Do you personally know anyone who has been a victim of identity theft?  
  • Can you tell me (on average) how long does it take to recover from identity theft? 
  • What do you estimate the total costs are for resolving an identity theft problem? 
  • How can ID Theft be prevented? 

Estimates range from 7 to 12 million Americans become victims of Identity Theft (ID Theft) each year.  That equates to 140,000 to 240,000 individuals per state.  The costs that are associated with ID theft (on an individual level) are hard to determine because there is a tremendous shortage of reliable data.  Here’s a link to a GAO report, but even they can’t get a clear picture of what the true costs are:

How do you put a dollar amount on the following?

  1. Correcting damage to a credit report
  2. Time spent trying to resolve the matter
  3. Out of pocket expenses
  4. Hiring an investigator
  5. Being denied a new job 
  6. Insurance premiums increasing or insurance being denied

A big problem with identity theft is accurate reporting.  Some credit card companies may report losses associated with “lost or stolen cards” as bad debt when in actuality it was due to ID theft.   Businesses may not report losses due to ID theft to law enforcement agencies.  Individuals may be reluctant to make ID theft claims due to embarrassment or misunderstanding the law.  

I met a person a few weeks ago that told me she had been a victim of ID theft over one and a half years ago — and she is still trying to get some lingering issues resolved.   That’s Way Too Long!  In reality, many victims don’t even know they’ve had their identity stolen.  It could be weeks or even months before they realize what’s happened.  By that time, the thief has already done the damage.   Credit reports are trashed, credit cards maxed out, checks bounced at the bank, new accounts opened, savings accounts emptied and even felony crimes committed by the perpetrator.

Once the victim discovers what happened – it gets worse.   A report should be made immediately to local law enforcement.  After that they must contact all 3 credit bureaus.  Then comes the hard part — making phone calls, writing letters, leaving messages, returning phone calls, figuring out what state laws apply, sending faxes, and the list goes on and on.

Think about the fact that the victim could be your neighbor, someone that attends the same church as you or the person standing next to you in the grocery store check-out line.  ID theft victims are real people, like you and me, with real lives.  What effect does such a violation have on his/her life?  Trying to get through a work day is tough enough without trying to correct an unwelcome, complex situation.  Many victims are surprised to learn that they must prove that THEY are the victim and not the CRIMINAL. 

What ever happened to “innocent until proven guilty”?

The Federal Trade Commission has some Identity Theft recovery guidelines:

                              

It doesn’t have to happen to you.

You CAN deter ID Theft — Put a Security Freeze on your credit report.  Go to:

for the applicable state guidelines that relate to you.

When you apply a Security Freeze to your report, it effectively locks access to your credit report so that no one can get credit in your name or open up a new account in your name.

If you choose to add the security freeze to your reports, it must be done with EACH credit bureau (Equifax, Trans Union, Experian).  There are some minor costs involved and each bureau has certain requirements that have to be satisfied before the freeze goes into place.

This puts a huge BARRIER between you and ID Thieves.

Let’s say you put a security freeze in place on your credit report and then you decide you want to buy a car or apply for a mortgage?   The security freeze would have to be temporarily lifted so that your report can be accessed to determine if you qualify for a car loan or mortgage.   Small fees apply and be aware that it could take several minutes to several days for this to happen — refer to the state guidelines and the requirements of each credit bureau to temporarily lift the freeze.

After you make your purchase, be sure and put the security freeze back in place.  Keep in mind additional fees and time involved. As well as the requirements of the credit bureaus.

You can also permanently remove the freeze from your report.

The FBI has recognized that ID theft is the fastest growing crime in America.  By putting a security freeze on your credit report, you will make it harder for ID thieves to steal your identity.  Keep in mind that you have to take additional steps in order to lift the freeze but the protection that it offers, I believe, far outweighs the minor inconvenience associated with lifting the freeze and putting it back in place.

It’s time that US consumers make it harder on the criminals that prey on unsuspecting victims.  Wouldn’t it be nice if consumers made it impossible for ID Theft to happen?  Then maybe those theives would go get a real job.

Shakespeare must have known something way back when……………………………………….

But he that filches from me my good name / Robs me of that which not enriches him / And makes me poor indeed”          (Shakespeare, Othello, act iii, Sc 3)

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Responses

  1. It’s so nice to see an article about Credit Freezes surface on the web now and then. This is by far the best way to protect your identity and there are far to few people talking about it.

    If you’re not convinced to get one, here’s my page on them:

    http://www.jeremyduffy.com/seminar/id-theft-module/

    (almost) Everyone should get a credit freeze. It will change the landscape as far as ID theft is concerned (for the better)

  2. I have gone toe to toe with all the credit reporting agencies, a number of creditors, and various third party agencies post ID theft 2001 and again a second attempt just this summer.

    Despite documentation from the remaining derogatory trade lines not belonging to me (in one case fraud, the other cases mistaken identity) I have letters from the original creditor confirming they instructed the CRA’s to delete a trade line.

    I also have recorded calls, etc. confirming the documents are accurate.

    I have written to every CRA every incorrect item for the past 6 years and they keep insisting my documentation is “not valid”. Trans Union actually had the audacity to accuse me of fabricating the creditor’s letterhead. How ridiculous is that statement?

    Now each CRA seems to have a different “conflict” and there is no consistency except for the one account dating back to 1999 and all are guilty of re-aging that account to make it appear more accurate. What I am led to beleive, but can not prove due to the uncooperative nature of the CRA’s is that when the original creditor sold the account in bulk to a junk debt buyer, they are somehow falsifying the record and reporting under the original creditors name. It is the only logical explanation I can come up with for a re-aging of an account to be 3 years beyond my State’s Statute of limitations.

    The CRA’s are not legally obligated to provide any information that they may have received which would supercede the information I received. Despite the fact I have evidence, I have recorded phone calls, and the creditos insist the accounts aren’t even mine and/or legally established by me, I am supposed to take their word for this alleged investigation. Even in the case where I suspect there is a bottom feeder collection agency providing false information (based on the address and the way they answer the phone as “Collection Department”) because of the lack of cooperation from the CRA’s I don’t have any information to go by.

    The CRA’s make it impossible to research independently the accuracey of the infomration they hold.

    And when you are the squeaky wheel, you are added to the “trouble maker” list and it is near impossible to get any response. The experience I have had is the continuous request for the same infomration to be re-submitted. The standard form letters requesting personal information including my social security card.

    My concern is what happens to this information, and why is it the information has been lost and re-requested in excess of 100 times between all agencies?

    It’s simple to understand how one would think the document is not lost and this is a stonewalling technique these agencies use.

    But it makes you think what security/background checks are done on their employees. In 2006 Equifax’s investigator handling my case called my place of employment disclosing my personal information and asking about the initial theft of PC’s. This secretary was not a member of security and the information that was relayed to the secretary was not specifically about the theft of employee personal information, but of my character and accusations of me committing a crime.

    A comlaint was filed, the employee allegedly fired, but now the company retaliates by ongoing refusal to provide credit reports (even when I offer to pay) and they continue to refuse to service the file.

    I requested freezes on my CRA’s and the same stonewall tactics were used. Just 2 months ago I received a call from my primary bank, who detected fraudulent activity on my account. On investigation with their fraud team the perpetrator used my old closed and comprimised account number for a $2.95 charge and therocket scientist at the bank rolled it over to the new account and told the person making the charge they should use my “new and updated” information. Needless to say the bank caught the error and closed the comprimsed account.

    What I did learn from that experience was that the CRA’s never put the freeze on my account and there were about 15 unauthorized inquiries into my file, one of which resulting in a new line of credit/charge off initiated around that same timeframe.

    Why isn’t the CRA’s held liable for their lack of cooperation? I have a lot of issues with the system and the lack of enforcement, lack of disclosure, and the blocks for consumers to protect their civil rights.

    ORWELL’S Predictions the Reality? Just as Winston Smith in Orwell’s 1984, we have American consumers with “Big Brother is Watching You”. Rather than the “party” taking over all aspects of life and the intent to eradicate individuality, you have Equifax, Experian, and Trans Union determining not only what banks will charge you for loans, but driving insurance rates, the type of job you hold, and how you will live.

    Orwell’s predictions of society being divided by four ministries is not too far fetched as you look at the “mega-leaders” in the financial industry making public policy and initiating a new form of serfdom, and using their influence and veiled threats to discourage consumers to fight back.

    As in 1984, and as illustrated in my own story above, once step outside the “acceptable conduct” as determined by the credit reporting agencies/financial industry, they have the power to label you a “trouble maker” for simply filing too many inquiries. It doesn’t matter when they are at fault. God forbid pursuing your rights, because in their opinion they NEVER make a mistake. Due diligence on the part of the consumer is reprimanded, they request “additional information” of course at the consumer’s time and expense. And if the consumer continues to complain and has the financial resources and ability to do so, the complaints become labeled as frivolous and irrelevant.

    I eerily remember the slogans of newspeak “War is Peace”, “Freedom is Slavery”, and “Ignorance is Strength”.

    That is the financial industries status quo from the lenders, to the bill collectors, to the credit reporting agency.


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