Credit Theft Protection

Credit theft is a crime in which someone uses your Social Security number for their own personal financial gain. The good news is that you take certain steps to protect yourself against credit theft as follows:

  • Sign up for Proactive Identity Theft Protection from TrustedID, LifeLock, Identity Guard, ProtectMyID or ID Patrol.
  • Check your credit report regularly by signing up for a Equifax Credit Report Monitoring Service to stay on top of your credit report from the three major credit bureaus  
  • Report the crime to your local police department. Get a copy of the police’s Identity Theft report to use when dealing with credit reporting agencies.
  • Close all credit and bank accounts after the theft with the time limitations. Plan on contacting debit card companies within 2 business days, and credit card companies within 60 days of the first statement affected by the theft.
  • Place fraud alerts on all your credit reports, so that the thief cannot open more accounts. Credit bureaus agencies will verify your identity by use of special codes or passwords that you will set up with them. Regularly check your credit reports for fraudulent activity taking place in your name.
  • Keep records of all the credit companies you contact by phone or mail. It may take repeated efforts to fix your credit so it helps to have the name of the person you wrote or spoke to.
  • File a complaint with the Federal Trade Commission. This agency assists victims of identity theft around the country, and it can even refer your case to other law enforcement agencies.
  • Order a statement of activity from the Social Security Administration. If income or benefits are listed that you have not received, you must contact Social Security Administration immediately. You’ll get a new Social Security card if the abuse has been significant.

Credit Consumer Scams

Here are the top five most popular credit fraud consumer scams that everyone needs to beware of and avoid falling victim to these scams.  

Credit repair. Credit-repair companies often run advertisements in newspapers, radio, TV, and the Internet, offering consumers assistance, for a price, to clean up their credit histories. The Federal Trade Commission (FTC) warns that most of the claims these credit repair companies make— like removing judgments, liens, and other unfavorable information from your credit records are bogus. Crdit repair firms cannot legally remove accurate negative information from a credit report and any legitimate help they can offer can be pursued by consumers themselves, at little or no cost by going direct to the three major credit bureaus (Equifax, Experian and TransUntion).

Advance-fee loans. These unethical advanced-fee loan lenders appeal to consumers who, based on their credit history, can’t get a loan from regular banks. These scammers falsely promise that for an advance payment, even consumers with bad credit histories can qualify to get a loan. Some of these lenders make money through the 900 numbers that charge consumers who call to find out about the loans. Others simply charge consumers a fee for a loan that is never delivered to the consumer.

Home equity. Deceitful financial home loan lenders target consumers who have good credit, but have a bad cash flow. They offer credit based not on income or the ability to repay, but on the equity of the home. Exploitative lenders may take advantage of the borrower by abusive practices such as “loan flipping” by repeatedly talking the borrower into refinancing the loan, which adds to the cost of the debt. If you don’t have enough income to make the monthly payments, you will probably lose your home, as many consumers do through these schemes.

Identity theft. The identity theft crime occurs when rip off artists steal credit card numbers, social security numbers, mother’s maiden names, or other personally-identifying information without one’s knowledge, to tap into the good credit histories of consumers. They then set up new credit accounts, charge purchases to existing accounts, or drain bank accounts. Frequently, consumers don’t know that their credit identities have been stolen until they get bills for credit card accounts that they never opened, see charges on their bills that they didn’t know anything about, get turned down for credit loans or discover that their bank accounts have been fraudulently accessed.

File segregation. This illegal scam is used by credit-repair companies to encourage consumers with unfavorable credit histories to obtain new taxpayer identification or employer identification numbers from the Internal Revenue Service under false pretenses and use them to hide their true credit identities from creditors. For a fee, the companies promise advice on how to go about segregating their credit files. File segregation is illegal and consumers who employ it are committing a felony and get fined or sentenced to jail time.

If you have a problem with any of the scams described here, contact your local consumer protection agency, state attorney general, or Better Business Bureau. Credit consumer scam victims lose a great deal of time, money and peace of mind. In addition, it can take years to repair damaged credit and your good reputation. Therefore, it is wise always remember that if something sounds too good to be true then it probably is a scam that you need to stay away from.

As always, we encourage consumers to also take a few simple preventative steps to protect yourself as much as possible against identity theft before it happens.

  • Keep an eye on your mail. Know when your account statements come; pay attention to your finances; obtain a copy of your Equifax 3-in-1 Credit Monitoring; and make sure you check for fraud regularly.

Credit Fraud and Identity Theft Protection During Tax Season

If you received an email or phone call from the Internal Revenue Service (IRS) telling you that your tax return was selected for an audit, would you provide your personal information? If you answered yes, chances are you would become a victim of credit fraud and identity theft.

Each year, millions of Americans spend hours preparing their taxes, hoping they do not owe money to Uncle Sam. But what many fail to realize is that the government is not the only one after their money—identity thieves take advantage of tax season to prey on unsuspecting victims.

Tax Time Scams to Steal Your Identity

Some of the biggest tax time scams are “phishing” schemes, designed to steal personal and financial information from victims via the Internet. Last year, the Treasury Inspector General for Tax Administration identified at least 20 fake Web sites pretending to be the official IRS Web site. According to the IRS, dozens of scams are reported each tax season.

In one common scam, an official-looking email informs you that you need to provide additional information for your tax return to be processed. The email directs you to a Web site that looks exactly like the IRS Web site. You are then told to fill out an online questionnaire, which asks for your Social Security and bank account numbers. One problem: while the graphics and pages look authentic, the site is a fake.

In 2006, even the commissioner of the New York State Department of Taxation and Finance was targeted by a phishing e-mail. Commissioner Andrew Eristoff says he received a fraudulent, tax-related email on his government computer. “It’s a reflection of how brazen these crooks have become,” says. “Here they are targeting a tax administrator with a tax refund scam.”

While phishing scams are increasingly popular due to the increased use of e-filing, many thieves use more traditional methods of stealing information, such as dumpster diving and stealing company records. Linda Foley, co-executive director of the Identity Theft Resource Center, understands all too well the danger of tax forms falling into the wrong hands. “A few years ago an employer used personal information taken directly from my tax forms to open credit cards and a cell phone account in my name,” says Foley.

Identity Theft: Top Complaint

Foley is one of more than 15 million identity theft victims in the United States. For seven years in a row, identity theft has been at the top of the list of complaints reported to the Federal Trade Commission (FTC), accounting for 36% of the 674,000 complaints the FTC received last year. Victims of identity theft suffer from a wide range of consequences, including:

  • having scammers open up credit accounts using their names
  • finding out that someone has been employed using their Social Security numbers
  • being turned down for insurance and loans due to damaged credit
  • being arrested for crimes they did not commit

In many cases, all a thief needs to steal your identity is your name and Social Security number. Therefore, tax documents are goldmines for identity thieves, as they contain valuable information, including your name, address, account information, and Social Security number.

Keep Your Identity Safe During Tax Season

To help prevent credit fraud and identity theft, we encourages you to exercise caution when handling tax-related documents and information. The following tips can help reduce your risk of credit fraud and identity theft during the tax season:

  • Always keep your tax paperwork in a safe and secure location. Shred any paperwork you no longer need before you dispose of it.
  • If you are filing your taxes online, be sure to use updated firewall, antivirus, and spyware software.
  • Monitor your mail closely during tax season. Make a list of everyone who pays you, including employers, banks and brokerages, and make sure you receive copies of what they send to the IRS.
  • Choose your tax professionals as carefully as you would a doctor or lawyer. Remember that a tax preparer has access to your Social Security Number, address, and other private information.
  • Be aware of IRS-related scams. If you receive an email asking for your personal or financial information, delete it or send it to the FTC at spam@uce.gov for investigation. The IRS will never email taxpayers about issues related to their accounts or ask for your Social Security number or financial details over the phone. If you have any doubt whether a contact from the IRS is authentic, call 1-800-829-1040 to confirm it.

It may seem like scammers are everywhere during tax time. However, if you exercise precaution when dealing with tax documents, you can help protect your identity.

Credit Fraud in Social Networking sites

Social networking sites like MySpace.com and Facebook.com encourage members to meet new people, share pictures and information, and interact with others in online communities. However, while social networking sites present many opportunities for members to connect with others on both a personal and business level, they also expose users to people who may have bad intentions, including identity thieves and other cybercriminals.

Bernadette Auert, a 34-year-old administrative assistant, says that she would never open links from spam e-mails or respond to offers in pop-up windows. She uses smart passwords and takes every precaution to protect her financial information when shopping and banking online. But, like millions of other social networking users, she admits that she lets her guard down when she logs into MySpace.com.

Most people exercise great caution when it comes to revealing personal information in a public place or when surfing online, but don’t think twice before posting all kinds of intimate information on social networking sites. Research conducted by the National Cyber Security Alliance (NCSA) reveals that a whopping 74 percent of social networking users divulge personal information, such as their e-mail address, name and birthday.

Not only do they reveal this potentially harmful information, but they also engage in other risky behaviors, such as downloading files and responding to unsolicited emails from fellow members. NCSA research shows that 83 percent download unknown files from other people’s profiles-an action that could lead to identity theft, computer spyware, viruses and other risks.

Unfortunately, cybercriminals are counting on this lack of caution, as they target the millions of users that frequent social networking sites. Because people reveal personal information on these sites, it is easy for cybercriminals to look at user profiles and use the information they find to customize their attacks. These targeted phishing attacks are known as “spear phishing”, and social networking sites present unprecedented opportunities for these scams. For example, a spear phisher may pose as one of your social networking contacts or friends to create phony messages designed to trick you into revealing more personal data, such as your credit card or phone number.

Auert experienced such an attack when a phisher, posing as one of her friends, sent her a link to a photo. Without hesitation, she clicked on the link and was directed to a site that asked for her logon information and email address. Fortunately, she noticed that the address bar did not read “MySpace.com” and closed it immediately. If she had provided this information, the phisher could have gained access to all kinds of information from her MySpace.com account.

According to Ron Texeria, executive director of NCSA, social networking users need to understand that sharing personal data may make them targets for online attacks. If a malicious person obtains your social security number, name and birthday, he or she may have enough information to hack into your financial records and compromise your personal information. Using information that you offer about your home, hobbies, interests, and friends, a cybercriminal could impersonate a trusted friend or convince you that they have the authority to request personal or financial data.

Fortunately, you can minimize their risks of becoming a credit fraud victim by understanding the potential dangers of these sites. We suggests following a few simple rules when socializing online to protect yourself against credit fraud:

  • Beware of scammers. Criminals scan social networking sites to find potential victims for customized scams, from phony lotteries to illegitimate business opportunities to fake high school reunions. Consider restricting access to your page to a select group of people and setting your profile to private to prevent uninvited members from viewing your personal information.
  • Exercise caution when clicking on links or downloading files. Scam artists often post links to infected ad banners in their profiles. Avoid opening links or downloads from strangers, and never enter your password or account number unless you’ve verified the site’s authenticity. When in doubt, always call the site owner to confirm.
  • Protect your personal information. Identity thieves can easily find enough photos and personal information on social networking sites to steal your identity. Avoid posting your full name, financial data, social security number, street address, birth date, and phone number.

Social networking sites provide great opportunities for people to meet and share experiences. But with this freedom comes a level of risk and the need to exercise caution. By using your best judgment and following our safety tips, you’ll enjoy the benefits of social networking and avoid the costly risks.