Identity Theft and How to Avoid It


What is "identity theft"?

"Identity theft" or ID theft is the common name given to the practice of pretending to be someone else without their consent, usually for illegal purposes.  The practice can range from unauthorized use of someone's credit card to completely assuming their identity, buying goods or obtaining credit in their name, and even giving the victim's name when arrested.  In spite of the fact that the Identity Theft & Assumption Deterrence Act of 1998 makes ID theft a federal crime, recent studies indicate that millions of people are victimized every year with damage in the billions of dollars.  Businesses suffer the greatest losses, but consumers also lose countless dollars and hours trying to clear up the mess.

Note to businesses:  the Texas Identity Theft Enforcement & Protection Act (2005) includes punishment for actions that expose others to risk.  For example, employees at a Radio Shack store near Corpus Christi got in trouble for dumping sensitive customer records in the trash in April 2007.

What you can do to avoid trouble:


If you are a victim:

If you find an unauthorized charge or otherwise suspect ID theft, contact the affected financial institution(s) immediately.  It's also a good idea to contact the three big credit reporting agencies and let them know you have been a target (see below).  Update:  the Fair and Accurate Credit Transactions Act (FACTA) of 2003 allows you to contact any one of the agencies, which must then contact the others for you.  The act also allows a 90-day alert or a seven-year alert to be put on your records.  If there is an alert on your records, financial institutions granting credit in your name must take reasonable steps to ensure that the credit is actually going to you and not to an imposter.  And, there is a procedure to get a FREE credit report once a year so you can make sure that no unauthorized accounts have been opened in your name (see below).


Important places to contact:

Credit reporting agencies.  If you are denied credit, the agency providing the credit report must give you a copy for free.  Otherwise you may have to pay a small fee.  However, the FACTA requires all credit reporting agencies to provide a free report once a year.  You can place a "fraud alert" on your record if you suspect your identity has been compromised, thereby requiring anyone granting credit in your name to first contact you personally.  The agencies are: Consumers Union's Guide to State Security Freeze Laws:  www.consumersunion.org/securityfreeze.htm  This site has details on state laws allowing consumers to have a "freeze" put on credit records, which prevent identity thieves from opening accounts in the consumer's name.

Federal Trade Commission ID Theft hotline:  877-438-4338 or www.consumer.gov/idtheft

Identity Theft Resource Center:  www.idtheftcenter.org


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Last updated January 16, 2008