Identity Theft: What to do When it Happens to You

For some time there has been a variety of news reports concerning one of the fastest growing crimes of the decade, identity theft.

In August 2006, the federal government reported that sensitive personal data including social security numbers for over 38,000 veterans was compromised when a computer disappeared at the Veterans Administration. Similar incidents have been reported by other government agencies, including 1,137 computers missing at the Commerce Department.

That’s not all. These disclosures about lost computers may be the result of a request initiated by Congress asking all federal agencies to account for missing computers. In Bexar County, an ex-employee of the county’s Information Services department was indicted on charges of trying to sell other county employees’ personal information. Private companies have also made the news with regard to compromised customer information. According to Mark Jewell from the Associated Press, the trend on personal data breaches kept growing during 2007, with many private organizations such as TJX Cos., Dai Nippon Printing Co., a check authorizing subsidiary of Fidelity National Information Services, TD Ameritrade Holding Corp. and the online job site Monster Worldwide Inc., reporting major data breaches.

Many of these organizations have voluntarily notified their customers of security breaches, although several states, including Texas, have now passed laws requiring such disclosure. In addition, legislation titled the Data Accountability and Trust Act is being considered by the federal government. This act also has data security and notification requirements, so many more consumers may soon be receiving similar notifications when their personal data has been accessed.

Identity theft involves obtaining personal data of another person, usually with the intention of committing fraud. The perpetrator may want to steal your financial assets or he may simply want to disguise his own identity for future frauds. An imposter can establish new credit accounts or access credit using existing accounts. With the right personal information an imposter may access all of your current bank accounts.

First and foremost, we should attempt to safeguard our personal information to the extent possible. These precautions are fairly well known and include steps such as safeguarding your personal identification codes, shredding documents that contain information about your accounts, and monitoring your monthly bills and statements. Unfortunately, there is nothing you can do to prevent security lapses by a company or organization with which you do business.

But what should you do if you are notified that your personal information has been compromised?

The first step is to obtain a free copy of your credit report and review it for any discrepancies.

The Fair and Accurate Credit Transactions Act (FACTA) enables you to obtain one free credit report per year from each of the three major credit bureaus. The three credit bureaus are, Equifax, Experian and TransUnion. Most advisors recommend that you order your free credit reports by phone rather than utilizing the online system. The telephone number to call is (877) 322-8228.

Review the credit reports and also carefully review all of your credit card and bank statements for several months. If your investigations indicate suspicious activity then it is important to act quickly. Organizations such as Privacy Rights Clearinghouse (www.privacyrights.org) provide a number of useful guidelines.

Notify creditors and credit agencies that you are a potential victim of identity theft; this will begin the process of establishing a fraud alert. When you notify one of the major three credits bureaus, they will notify the other two for you.

The effect of a fraud alert is that your file will be flagged and creditors will have to call you before extending credit on your behalf. The initial alert will be in effect for 90 days, but as soon as you receive notice from the credit bureaus about your rights as a victim, you can request a free copy of your credit report (in addition to the one enabled by FACTA) and an extension of the fraud alert for seven years (there are additional requirements for the extension request).

After the initial notification, it is important to follow up on your credit reports to make sure new accounts are not being opened by the imposter. Under Texas law you also have the right to initiate a “security freeze” which is stronger than a fraud alert because it prevents anyone from accessing your credit report without your permission.

Finally if a crime has been committed report the crime to your local law enforcement agency and make sure to get a copy of the report. You may need to show it to your creditors when trying to correct any fraudulent charges. Also report the crime to the Federal Trade Commission, their hotline is 877 438-4338.

Keeping good records will work on your behalf, keep a log of all conversations, confirm conversations in writing and send correspondence using certified mail with return receipt requested. Finally, do not pay a bill that is a result of fraud. Your credit should not be affected and you should not be legally processed as a result of being a victim of identity theft crime.

By Efrain Adames, SRSU-Rio Grande College