IDENTITY THEFT: UNDERSTANDING THE CRIME AND ITS IMPACT
Definition: Identity theft is the act of using someone else’s personal or financial information without authorization to commit fraudulent activities. This can include unauthorized transactions, purchases, and other deceptive actions.
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How Identity Theft Occurs:
Thieves employ various methods to obtain personal data:
- Rummaging Through Trash Bins: Some sift through discarded documents, such as bank statements and credit card bills.
- Digital Techniques: Identity thieves increasingly use computer technology:
- Scanning Stolen or Discarded Computers: They search hard drives for sensitive information.
- Hacking Computer Networks: They infiltrate organizational systems.
- Accessing Public Records: They mine computer-based records.
- Malware Attacks: They infect computers with information-gathering malware.
- Social Networking and Deceptive Emails: They exploit online platforms.
Once armed with this information, identity thieves can severely damage a person’s credit, finances, and reputation.
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Types of Identity Theft:
- Financial Identity Theft
- Medical Identity Theft
- Synthetic Identity Theft
- Child Identity Theft
- Tax Identity Theft
- Criminal Identity Theft
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Indicators of Identity Theft:
It’s challenging to detect identity theft, especially if you don’t regularly review financial statements.
Look out for these signs:
- Unauthorized Bills: If you notice charges for items you didn’t purchase on your credit card statement, online account, or via invoices by email or U.S. mail, it could be a sign of identity theft.
- Debt Collector Calls: Receiving calls from debt collectors regarding accounts you didn’t open is another red flag.
- Denied Loan Applications: Even if you believe your credit is in good standing, having loan applications denied unexpectedly may indicate identity theft.
- Bounced Checks: Unexpectedly bouncing checks can be a consequence of someone misusing your identity.
- Arrest Warrants: If you find yourself facing an arrest warrant for something you didn’t do, it’s crucial to investigate further.
- Unexplained Medical Charges: Receiving medical bills or EOBs for services you didn’t receive can signal identity theft.
- Utilities Being Shut Off: Unexpected utility shut-offs, despite timely payments, should raise suspicion.
- Inability to Sign into Accounts: If you suddenly can’t access your accounts, someone might have tampered with your credentials.
- Inexplicable Hard Inquiries on Your Credit Report: Unexplained inquiries on your credit report could be a sign of fraudulent activity.
- New Credit Cards in Your Name: Receiving credit cards, you didn’t apply for is a serious concern.
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Potential Victims of Identity Theft:
While anyone can fall victim, children and aging adults are particularly vulnerable.
- Children often lack awareness and may not recognize identity theft until adulthood.
- Adults seeking medical care frequently share personal information, making them targets.
- Caregivers or family members handling their finances may not always inform them or check their accounts regularly.
If you suspect identity theft, immediately visit IdentityTheft.gov, a website administered by the Federal Trade Commission (FTC). It provides guidance on recovering your identity and addressing any damage you may have experienced. Stay vigilant!
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What to Do If Someone Has Stolen Your Identity:
- Report to the Federal Trade Commission (FTC): Visit IdentityTheft.gov or call 1-877-438-4338 to report the theft. Provide necessary details about the incident.
- Freeze Your Credit Reports: Contact credit bureaus (Equifax, Experian, and TransUnion) to freeze your credit. This prevents new accounts from being opened in your name.
- File a Police Report: Report the identity theft to your local police department. Obtain an official report for documentation.
- Secure Sensitive Accounts: Change login credentials (passwords) for all sensitive accounts - Online banking, email, social media, etc. Consider enabling two-factor authentication for added security.
- Replace Credit and Debit Cards: Close your existing credit and debit cards. Request new ones to prevent unauthorized use.
- Review Your Credit Reports: Regularly check your credit reports for discrepancies. Dispute any false accounts with credit agencies.
Remember, identity theft can have serious consequences. Monitor your financial statements and take swift action if you suspect fraud. Seek government resources to help restore your credit standing.
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Credit Freezes and Fraud Alerts, which can help protect you from identity theft:
Credit Freezes:
- Who Can Place One: Anyone, even if their identity hasn’t been stolen, can freeze their credit report.
- What It Does: A credit freeze restricts access to your credit report. While the freeze is in place, neither you nor others can open new credit accounts. You can temporarily lift the freeze when applying for new credit. Essential activities like job applications, apartment rentals, and insurance remain unaffected.
- Duration: A credit freeze remains in effect until you remove it.
- Cost: It’s free to place a credit freeze.
- How to Place: Contact each of the three credit bureaus: Equifax, Experian, and TransUnion.
Fraud Alerts:
- Who Can Place One: Anyone suspecting fraud can add a fraud alert to their credit report.
- What It Does: A fraud alert makes it harder for someone to open a new credit account in your name. Businesses must verify your identity before issuing new credit. Placing a fraud alert allows you to obtain a free credit report from each of the three bureaus.
- Duration: A fraud alert lasts for one year, with the option to renew.
- Cost: It’s free to place a fraud alert.
- How to Place: Contact any one of the three credit bureaus (Equifax, Experian, or TransUnion). You don’t need to contact all three; the bureau you notify will inform the others.
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Benefits of Freezing Credit:
- Prevents Unauthorized Accounts: Unauthorized individuals cannot open new accounts.
- Requires PIN or Password: Unfreezing credit requires a secure PIN or password.
- No Impact on Existing Accounts: Existing accounts remain unaffected.
- Cost-Effective: Credit bureaus do not charge fees for credit freezes.
Remember to take proactive steps to safeguard your personal information! 🛡️
To Freeze your credit, use the following links:
Equifax - Link to Freeze Credit
Transunion - Link to Freeze Credit
Experian - Link to Freeze Credit
Originally published by Investopedia.com and FTC Consumer Advice.
https://www.investopedia.com/terms/i/identitytheft.asp
https://consumer.ftc.gov/articles/what-know-about-credit-freezes-fraud-alerts
