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ID Theft - Be Your Own Best Defense

by Mary Ann Campbell

Uncovering an organized identity-theft ring was the last thing Grace Varnell thought she would do when she returned to college to obtain a nursing degree. She took my personal finance course as an elective, and the smart, hard-working student followed all her assignments, including the one that called for her to obtain a free copy of her credit report.

After her credit report came in the mail, Grace started looking it over. She was shocked. There were numerous entries for credit card accounts Grace had not opened, as well as late-payment notations. It was definitely not Grace's nature to pay late.

Grace told her fellow workers about her discovery, and suggested they obtain free credit reports too. Within a few weeks, alarm rippled through Grace's place of employment. In addition to Grace's, the identities of numerous other employees had been stolen. The police were quickly notified.

How did Grace and her co-workers become victims? Night-time employees, who cleaned Grace's workplace, had gone through human resource files to obtain what is pure gold for ID thieves--names, addresses, dates of birth and Social Security numbers. Visits to the homes of fraud-ring members revealed merchandise purchased by opening new credit card accounts with stolen identities. The perpetrators were tried and convicted, but Grace and her co-workers had a lot of cleaning up to do. With lowered credit scores and compromised reputations, recovery was frustrating, expensive and time-consuming.

Credit report vigilance is key

The damage to Grace and her co-workers would have been far worse if they had not investigated their credit--a step that I recommend everyone take. You can stay alert by ordering a free credit report from Equifax, Experian and TransUnion each year through annualcreditreport.com. Obtaining one report from a different credit bureau every four months is the most inexpensive way to monitor credit year-round. To catch identity theft early, see if there are any new accounts listed. Fly into action if you uncover irregularities.

Or, as Grace says, "I've learned to stay alert, work harder at it, and I'm willing to go the extra step to prevent being a victim a second time."

Credit card companies want to help

If you've received a phone call from your credit card company questioning you about recent purchases or your pattern of charges, you're probably already aware that credit card issuers have beefed up their own fraud detection and prevention activities.

"We're all in this together,'' says Rod Griffin, Experian's public education director. "Credit fraud affects all business and it's important for everybody to fight it."

A key step every consumer can take is to place fraud or security alerts on their credit report. These free alerts tell lenders to take extra steps to verify identity because the consumer has been a victim of identity theft in the past or thinks they are an identity-theft target. Each alert stays on for 90 days, and such personal finance experts as MoneyTalk's Stacy Johnson recommend free services that remind you to reissue alerts when the old ones expire.

Freeze new business for extra protection

If you have an official police report identifying you as crime victim, a copy of a Federal Trade Commission filing or any other valid report of identity theft, you have the right to place an extended security alert that will stay on your record for seven years. In addition, you only have to contact one of the three credit bureaus to place this alert, and they will contact the other two. My student Grace took this extra step.

Beyond an alert, there is the option to stop all new business from being conducted. Called a credit freeze, this approach blocks your file from any new businesses unless you call to allow it. Credit card companies and other businesses that have a current relationship with you can access your file, but no one else.

"A freeze is not for everybody because it removes you from the credit marketplace," says Griffin. However, in today's electronic world, a freeze can be removed in minutes if there is no conflicting information in the file, Griffin acknowledges. Keep in mind, to place a freeze, it is necessary to know your state's processes and there is a good chance there is a security fee.

My student Grace learned a valuable life lesson in that college class, and she helped a lot of her co-workers in the process.

"The lessons I've learned I'm passing on to my children and will eventually to my grandchildren,'' she says. "I never give out my social (Security number) any more, even to the Red Cross."

 

 

Published 02/25/11 (Modified 07/09/14)


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