Identity theft (or identity fraud) occurs when an imposter obtains and uses key pieces of personal information, such as name, address, Social Security number, credit card or bank account information, without permission, to impersonate another person for illegal financial gain or some other illicit benefit. If this happens to you, it can impact your finances as well as other aspects of your life. Therefore it is important for you to be aware of the measures that you can take, as needed, to help to protect yourself against such risks.
Place A Fraud Alert On Your Credit Files
If you are concerned that your personal or financial information has been compromised or misused, you can place a fraud alert on your credit files by contacting any one of the 3 national consumer reporting agencies listed below. A fraud alert is free, and will require a business to contact you if someone tries to open a new account in your name or before the business issues credit to someone using your name. A fraud alert will initially be displayed for 90 days (and may be extended up to 7 years if you file an identity theft report with the Federal Trade Commission (FTC)).
Once a fraud alert is placed, you will be entitled to request a free copy of your credit reports directly from the 3 national consumer reporting agencies. You also have the right to obtain free copies of your credit reports annually and independent of a fraud alert through annualcreditreport.com or by calling 877-322-8228.
Use A Security Freeze
If your personal information has been compromised or you notice suspicious activity on your credit reports or on other account statements, you may also want to place a security freeze (also known as a credit freeze) on your credit files. This has to be done individually with each of the 3 national consumer reporting agencies and by doing so, the national consumer reporting agencies will not release information about your credit without your authorization. This can also help to prevent an imposter from opening a new account in your name without your knowledge. Bear in mind that a security freeze may cause delays when you are opening a new account or new line of credit, and there may be a cost to place or remove it.
Review Your Credit Reports Carefully
When you receive your credit reports, read through them carefully and look out for any information that appears incorrect, unusual or out of the ordinary, such as:
– unfamiliar accounts or charges,
–inquiries from creditors that you did not initiate,
–claims made by creditors that you are not aware of, or
–any inaccuracies in your personal information, such as home address or Social Security number.
If you find any errors or wish to dispute any item, you should notify that consumer reporting agency and the information provider that is shown on your credit report. Even if you do not find any indications of fraud or misuse of your information, it would still be prudent to routinely review your credit reports.
Notify Relevant Authorities And Interested Parties
You should consider filing a police report if your personal information has been misused or if you find fraudulent activity in your credit report. Remember to keep a copy of the police report for your records, so that you can provide it to creditors when disputing any claims or debts resulting from identity theft.
You can also file an identity theft report with the Federal Trade Commission (FTC) at identitytheft.gov or by calling 877-IDTHEFT (877-438-4338). Your complaint will be added to the FTC’s Identity Theft Data Clearing house, where it will be accessible to law enforcement to facilitate investigations and prosecution of identity theft.
If you suspect that your Social Security number and other personal information have been compromised or used fraudulently, you may want to notify the Internal Revenue Service (IRS) at https://www.irs.gov/individuals/identityprotection or call them at 800-908-4490 to discuss potential protections for your next tax return, such as filing an Identity Theft Affidavit (Form 14039).
Lastly, you might want to inform your bank, financial institutions and other key contacts with whom you do business to alert them of your identity theft concerns so that they can take the appropriate precautions such as having security flags added to your accounts, changing your account numbers or closing inactive accounts or accounts that you believe have been tampered with or opened fraudulently.
Sign Up For Identity Theft Protection Products Or Services
There are different vendors who provide various types of identity theft protection products and/or services to the public, some of which offer features that extend beyond basic credit monitoring. Many of these vendors charge a fee for their products and services. These vendors can also provide identity theft related guidance. You may want to investigate what products and/or services are available in the market and decide what is appropriate for you, and the level of protection you need.
Be Vigilant And Aware
As criminals grow increasingly sophisticated and creative in how they commit identity theft, fraud and other related criminal activities, it is important for you to keep yourself up-to-date and informed about these matters. For example, the FTC, the 3 national consumer reporting agencies, and many states’ Attorney General or Department of Consumer Affairs provide useful information through their websites on how to prevent, respond to and/or mitigate risks associated with identity theft.
Laurie P. Barry, CFP®, Wealth Advisor, Vice President — Wealth Management
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