How to beat identity theft before it happens
By Lynn N. Duke
NYT Regional Newspapers
Sometimes there’s a warning – news reports of hackers breaking into a firm’s online files and stealing consumers’ passwords; or it could be an inside job that breached a bank’s security system and let loose thousand of customers’ sensitive credit information.
More often, however, the alarms don’t go off until the bill collectors start calling or you’ve been turned down for a loan or even a job. Even getting arrested is a possibility, if someone has been living with your name – and destroying your credit in the process.
“Everybody’s at risk, even newborns,” said Robert Siciliano, CEO of IDTheftSecurity.com, which provides online readers with advice and tips to help safeguard their identity. “Anyone with a Social Security number is a potential victim.”
Identity theft led all consumer complaints last year, according to the Federal Trade Commission. Of the 686,000 consumer complaints logged in 2005, 255,000 (37 percent) were for identity theft, a 19 percent increase compared to 2003. Among identity theft cases, credit card fraud accounted for more than one-quarter of the complaints. The FTC estimates that identity theft cost industry and consumers more than $52 billion in 2004; not including time spent trying to undo the damage.
Technology is the double-edged sword of security. When used properly, it allows millions of people to travel and transact business in a secure environment. But the flip side means that same technology in the hands of the wrong people with the right information can wreak havoc.
“We live in an information age and your personal information is very valuable to thieves,” said Eric Gertler, author of “Prying Eyes.” “You have to be very proactive in safeguarding your credit and your personal information. You’d be amazed at how many people give out information to strangers over the phone or online.”
But there are things you can do to safeguard not just your money, but also your good name.
As of 2005, everyone in the United States is entitled to one free credit report annually from each of the three largest credit-reporting agencies (Equifax, experian<sic> and TransUnion).
Ideally, consumers should pull a report from one of the three agencies every four months so they can stay on top of their credit report throughout the year. Review the report to make sure that accounts that you’ve closed are actually closed and keep a close eye out for new credit applications. Report any discrepancies immediately and in writing. But don’t go checking your credit every week or every month. Too many inquiries can damage your credit rating.
In some states, consumers can freeze their credit. With a credit freeze, only the person who has the pin number can unlock the credit, keeping unwanted snoops out of your file. But it also curbs your access to instant credit, and while many consumers may not care, retailers do.
Sandy Adams, a member of the Florida House of Representatives, is sponsoring legislation that would give residents of that state a right to freeze their credit. Now only 12 states allow credit freezes, including California, New Jersey and North Carolina – and considering similar measures are 27 other states, including Louisiana, which offers the option only to victims of identity theft.
Adams said she’s been heavily lobbied by the retail and credit industries, who see the bill as a crimp in their cash flow. But she’s optimistic that bill will pass.
“Criminals will always be criminals, but if you have more ways to protect yourself is what this bill is all about,” Adams said. “It’s one more tool in the consumer’s tool box. I don’t see how you vote against something like that.”
Besides monitoring your credit report, use a shredder religiously to dispose of any documents that include private information: bank statements, credit card statements and offers, insurance documents and medical records are among the most common. Also be very careful about doing business online and make sure your computer has a firewall, Gertler said.
Part of what makes identity theft so easy, according to Siciliano, is the lack of uniformity among identification systems in the U.S. According to him, there are 200 drivers license formats, 49 versions of Social Security cards and more than 14,000 variations of a birth certificate – all of them legal. This makes it a lot easier to slip in a fake than if there were one standard across the board. In some states, social security numbers are also used as driver’s license numbers and they are also commonly used as student ID numbers.