Nonprofit Credit Counseling and Debt Consolidation

The crime of identity theft is on the rise.  Recent surveys show there are currently 7-10 million victims per year, greatly exceeding earlier estimates.  Using a variety of methods, criminals steal Social Security numbers (SSN), driver's license numbers, credit card numbers, ATM cards, telephone calling cards, and other pieces of individuals' identities such as date of birth.  They use this information to impersonate their victims, spending as much money as they can in as short a time as possible before moving on to someone else's name and identifying information.

There are two types of identity theft.  "Account takeover" occurs when a thief acquires your existing credit account information and purchases products and services using either the actual credit card or simply the account number and expiration date.  Victims usually learn of account takeover when they receive their monthly account statement.  "Application fraud" is what some experts call "true name fraud."  The thief uses your SSN and other identifying information to open new accounts in your name.  Victims are not likely to learn of application fraud for some time, because the monthly account statements are mailed to an address used by the imposter.  Thieves have taken “Application fraud” a step further.  In some cases the thieves actually pay the minimum payments of these new accounts that they’ve opened in their victims names’.  After several months of making the minimum payments, they ask the credit card company to raise the limit on the account, giving themselves more opportunities to accumulate debt on the victims’ account. 

Generally, victims of credit and banking fraud are liable for no more than the first $50 of the loss. (15 USC sec. 1643) In many cases, the victim will not be required to pay any part of the loss.  Even though victims are usually not saddled with paying their imposters' bills, they are often left with a bad credit report and must spend months and even years regaining their financial health.  On average victims spend 600 hours of recovery and $1,400 in expenses.   In the meantime, they have difficulty getting credit, obtaining loans, renting apartments, and even getting hired. 

Stealing wallets used to be the best way identity thieves obtained SSNs, driver’s licenses, credit card numbers and other pieces of identification.  While still employed, identity thieves now use these and other more sophisticated means:

• "Dumpster diving" in trash bins for un-shredded credit card and loan applications and documents containing SSNs.
• Stealing mail from unlocked mailboxes to obtain newly issued credit cards, bank and credit card statements, pre-approved credit offers, investment reports, insurance statements, benefits documents, or tax information. Unfortunately, even locked mailboxes may not stop the most determined thief.
• Accessing your credit report fraudulently, for example, by posing as an employer, loan officer, or landlord.
• “Shoulder surfing" at ATM machines and phone booths in order to capture PIN numbers.
• Finding identifying information on Internet sources, via public records sites and fee-based information broker sites.

If you believe that you are a victim of ID theft, take these 4 steps:

1. Contact the fraud departments of any one of the three major credit bureaus to place a fraud alert on your credit file. The fraud alert requests creditors to contact you before opening any new accounts or making any changes to your existing accounts. As soon as the credit bureau confirms your fraud alert, the other two credit bureaus will be automatically notified to place fraud alerts, and all three credit reports will be sent to you free of charge.
2. Close the accounts that you know or believe have been tampered with or opened fraudulently. Use the ID theft Affidavit when disputing new unauthorized accounts.
3. File a police report. Get a copy of the report to submit to your creditors and others that may require proof of the crime.
4. File your complaint with the Federal Trade Commission. The FTC maintains a database of identity theft cases used by law enforcement agencies for investigations. Filing a complaint also helps us learn more about identity theft and the problems victims are having so that we can better assist you. To file a complaint or to learn more about the FTC’s Privacy Policy, visit www.consumer.gov/idtheft. If you don’t have access to the Internet, you can call the FTC’s Identity Theft Hotline: toll-free 1-877-IDTHEFT (438-4338); TDD: 202-326-2502; or write: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

The following steps will greatly reduce the chances of the frustrating and time-consuming consequences of identity theft:

• Order a copy of your credit report from each of the three major credit bureaus. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you’ve been sued, arrested or filed for bankruptcy. Make sure it’s accurate and includes only those activities you’ve authorized. By law, credit bureaus can charge you no more than $9 for a copy of your credit report. See “Credit Reports,” below, for details about removing fraudulent and inaccurate information from your credit report.

• Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers. When opening new accounts, you may find that many businesses still have a line on their applications for your mother’s maiden name. Use a password instead.

• Secure personal information in your home, especially if you have roommates, employ outside help or are having service work done in your home.

• Ask about information security procedures in your workplace. Find out who has access to your personal information and verify that records are kept in a secure location. Ask about the disposal procedures for those records as well.

• Order a copy of your credit report from each of the three major credit bureaus once a year. By checking your report on a regular basis you can catch mistakes and fraud before they wreak havoc on your personal finances. Don’t underestimate the importance of this step. One of the most common ways that consumers find out that they’re victims of identity theft is when they try to make a major purchase, like a house or a car. The deal can be lost or delayed while the credit report mess is straightened out. Knowing what’s in your credit report allows you to fix problems before they jeopardize a major financial transaction.

• Don’t give out personal information on the phone, through the mail or over the Internet unless you’ve initiated the contact or are sure you know who you’re dealing with. Identity thieves may pose as representatives of banks, Internet service providers (ISPs) and even government agencies to get you to reveal your SSN, mother’s maiden name, account numbers and other identifying information. Before you share any personal information, confirm that you are dealing with a legitimate organization. You can check the organization’s Web site as many companies post scam alerts when their name is used improperly, or you can call customer service using the number listed on your account statement or in the telephone book.

• Guard your mail and trash from theft.  Deposit outgoing mail in post office collection boxes or at your local post office, rather than in an unsecured mailbox. Promptly remove mail from your mailbox. If you’re planning to be away from home and can’t pick up your mail, call the U.S. Postal Service at 1-800-275-8777 to request a vacation hold. The Postal Service will hold your mail at your local post office until you can pick it up or are home to receive it.  To thwart an identity thief who may pick through your trash or recycling bins to capture your personal information, tear or shred your charge receipts, copies of credit applications, insurance forms, physician statements, checks and bank statements, expired charge cards that you’re discarding, and credit offers you get in the mail.  Pay attention to your billing cycles. Follow up with creditors if your bills don’t arrive on time. A missing credit card bill could mean an identity thief has taken over your account and changed your billing address to cover his tracks.

• Your Social Security Number. Don’t carry your SSN card; leave it in a secure place. Give your SSN only when absolutely necessary. Ask to use other types of identifiers when possible. If your state uses your SSN as your driver’s license number, ask to substitute another number.

The Doors and Windows Are Locked, but . . .

You may be careful about locking your doors and windows, and keeping your personal papers in a secure place. But, depending on what you use your personal computer for, an identity thief may not need to set foot in your house to steal your personal information. SSNs, financial records, tax returns, birth dates, and bank account numbers may be stored in your computer — a goldmine to an identity thief. The following tips can help you keep your computer and your personal information safe.

1. Update your virus protection software regularly, or when a new virus alert is announced. Computer viruses can have a variety of damaging effects, including introducing program code that causes your computer to send out files or other stored information. Be on the alert for security repairs and patches that you can download from your operating system’s Web site.
2. Do not download files sent to you by strangers or click on hyperlinks from people you don’t know. Opening a file could expose your system to a computer virus or a program that could hijack your modem.
3. Use a firewall program, especially if you use a high-speed Internet connection like cable, DSL or T-1, which leaves your computer connected to the Internet 24 hours a day. The firewall program will allow you to stop uninvited guests from accessing your computer. Without it, hackers can take over your computer and access your personal information stored on it or use it to commit other crimes.
4. Use a secure browser — software that encrypts or scrambles information you send over the Internet — to guard the security of your online transactions. Be sure your browser has the most up-to-date encryption capabilities by using the latest version available from the manufacturer. You also can download some browsers for free over the Internet. When submitting information, look for the “lock” icon on the browser’s status bar to be sure your information is secure during transmission.
5. Try not to store financial information on your laptop unless absolutely necessary. If you do, use a strong password — a combination of letters (upper and lowers case), numbers and symbols. Don’t use an automatic log-in feature that saves your user name and password so you don’t have to enter them each time you log-in or enter a site. And always log off when you’re finished. That way, if your laptop gets stolen, it’s harder for the thief to access your personal information.
6. Before you dispose of a computer, delete personal information. Deleting files using the keyboard or mouse commands may not be enough because the files may stay on the computer’s hard drive, where they may be easily retrieved. Use a “wipe” utility program to overwrite the entire hard drive. It makes the files unrecoverable. For more information, see Clearing Information From Your Computer’s Hard Drive (www.hq.nasa.gov/office/oig/hq/harddrive.pdf) from the National Aeronautics and Space Administration (NASA).
7. Look for Web site privacy policies. They answer questions about maintaining accuracy, access, security, and control of personal information collected by the site, as well as how information will be used, and whether it will be provided to third parties. If you don’t see a privacy policy, consider surfing elsewhere.

For more information, see Site-Seeing on the Internet: A Traveler’s Guide to Cyberspace from the FTC at www.ftc.gov.

Credit Bureaus Pre-Screened Credit Offers - If you receive pre-screened credit card offers in the mail (namely, those based upon your credit data), but don’t tear them up after you decide you don’t want to accept the offer, identity thieves could retrieve the offers for their own use without your knowledge.

To opt out of receiving pre-screened credit card offers, call: 1-888-5-OPTOUT (1-888-567- 8688). The three major credit bureaus use the same toll-free number to let consumers choose to not receive pre-screened credit offers.

It may seem inconvenient to implement all of these suggestions, just remember, average victims spend 300+ hours and $1,000 in out-of-pocket expenses to clear their names. (Privacy Rights Clearinghouse and FTC 05/02) 

Disclaimer: The information outlined in this flier may not be suitable for every individual, and are not guaranteed or warranted to produce any particular results. No warranty is made with respect to the accuracy or completeness of the information contained herein, and DebtWave Credit Counseling specifically disclaim any responsibility for any liability, loss or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this flier.