Identity theft is a growing criminal activity, affecting thousands of
Americans each year. How serious is this crime? It topped the list of
consumer complaints in 2002 according to the Federal Trade Commission. The
FBI estimates between 500,000 and 700,000 Americans are victims of identity
theft each year.

 
Identity theft involves a criminal using your personal information, such as
your name, Social Security number, credit card numbers, driver’s license or
telephone number, without your permission. Thieves obtain your information
from a variety of sources: a stolen wallet, your mail, your trash, the trash
of a business and even from your home. Thieves commonly use this information
to open new accounts for credit cards and cell phones. Unbeknownst to
victims, the thieves run up large bills and leave them unpaid. The victim is
left with large debts and a damaged credit report. Some thieves have even
gone so far as to obtain mortgages and create counterfeit checks.

 
Once you’ve been a victim of identity theft, the consequences can be
far-reaching. Victims of identity theft may spend a significant amount of
time trying to repair the damage. As a victim, you would need to close
affected accounts, correct credit reports, open new accounts and possibly
even obtain a new Social Security number.

 
A common result of identity theft is a damaged credit report. This can
dramatically affect your ability to obtain a loan and may even play a factor
in being hired for a new job. Banks may refuse to offer you a loan, or may
give you a loan with a less desirable rate or terms. Employers are able to
pull your credit report during the interview process and may use a negative
credit report as basis for not hiring you.

 
What Can You Do?

 
There are several steps you can take to help protect yourself from identity
theft:

  • Place documents with personal information in a safe,
    out of sight location, especially if you have people doing work in your home
    or if you have a roommate.

  • Consider investing in a paper shredder. All those
    offers for credit cards and home equity loans are easy ways for thieves to
    open accounts in your name.

  • If your mailbox does not have a lock on it, consider
    mailing bills or any correspondence that contains account information from a
    post office.

  • Don’t carry more personal information than is
    necessary. If you can, only keep one credit card in your wallet and avoid
    carrying your Social Security card.

  • Review your credit report on an annual basis. You
    should obtain your credit report from all three of the major credit
    reporting bureaus. In some states, you are entitled to a free copy of your
    report each year.

  • Do not include your Social Security number on your
    checks or share your number with anyone who does not need to have it.

You’re a Victim – Now What?

 
If you’ve discovered that you are a victim of identity theft, you should
immediately contact the police. You need to file a police report in order
for the authorities to begin their investigation. Plus, you will use
information from this report to help close accounts and clear up your credit
report.

 
After you’ve reported the theft to the police, the next step is to contact
the three major credit reporting bureaus, your credit card companies and
banks. With each of the credit bureaus, ask to have fraud alerts placed on
your accounts. You can even ask that they mark your record as not able to
open new accounts without contacting you directly. Make sure you document
all conversations and ask for a copy of your credit report. You are entitled
to a free copy of your report in instances of identity theft. This will help
you to find fraudulent activity.

 
If you have affected credit cards or bank accounts, contact the credit card
company or bank immediately. Have the accounts closed and labeled “closed at
customer’s request.” You can be assigned new account numbers with the same
company. If you have other accounts that were not compromised, you may want
to have a hold placed on them to assure that no future damage is done.

 
Useful contacts:
Credit Bureaus:
Equifax
www.equifax.com
(800) 525-6285 – To report fraud
(800) 685-1111 – To order credit report

 
Experian
www.experian.com
(888) EXPERIAN (397-3742)

 
TransUnion
www.transunion.com
(800) 680-7289 – To report fraud
(800) 916-8800 – To order credit report

 
The Federal Trade Commission (FTC) ID Theft Data Clearinghouse
www.ftc.gov
(877) IDTHEFT (483-4338)

 


 
C. David Petrucci, CFP®, is an Associate Vice-President-Investments and
Wealth Management Specialist with Legg Mason Wood Walker, Inc., a
diversified securities brokerage and financial services firm that is a
member of the New York Stock Exchange, Inc. and SIPC.
800.634.0072

cdpetrucci@leggmason.com
www.davidpetrucci.com

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