Identity Theft and How to Avoid It


Quick Overview

Watch this video:  http://www.youtube.com/watch?v=DNvpW5PjuxM

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.  Similar laws may be in effect in other states. Businesses that collect or keep sensitive data should seek the advice of information system security professionals for how to ensure that the data are kept safe.

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 oneof 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. A "freeze" as described in the next paragraph is even better protection but has some down sides.  Note also that 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 temporary "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.  For even more protection (but more inconvenience, if you need to apply for credit), you can place a non-expiring credit "freeze" on your record.  Freezes must be placed separately with each credit reporting agency, and there is a small fee unless you can provide proof of being an ID theft victim.  There is also a small fee for each agency to remove or temporarily "thaw" your credit report so you can get credit in your own name.  The agencies are: Consumers Union's Guide to State Security Freeze Laws:  http://www.consumersunion.org/campaigns//learn_more/003484indiv.html .  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 consumer help:  877-382-4357; ID Theft hotline:  877-438-4338 or www.ftc.gov/bcp/edu/microsites/idtheft/

Identity Theft Resource Center:  www.idtheftcenter.org

Better Business Bureau (to check out a suspect business or file a complaint):  www.bbb.org


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Last updated January 28, 2012