To protect yourself from becoming a victim:- Don't carry a checkbook. Pay by cash or credit card.
- Don't carry your Social Security card with you or use your Social Security number as your driver's license number.
- Buy a paper shredder. Shred any documents listing your social security number and other financial information such as your bank account numbers and credit card numbers. This is the number one way of preventing identity theft.
If someone is using your identity and cashing your checks or credit cards, you should: Report the situation immediately to your bank or credit card company. You may not have monetary liability because forgery and/or fraud is involved, but you will want the companies to be aware of the problem, as this is something that could affect your credit. In addition, follow these instructions to fully protect yourself:
a) Contact all three credit bureaus and issue a fraud alert. Check your credit report six months later and look for items you don't recognize.
b) Provide a copy of your driver's license to each agency's fraud unit in order to register an affidavit.
c) Contact the proper authorities in writing, via certified receipt request.
d) Inform your local police department, Social Security Administration and all creditors with whom you have accounts.
Credit bureaus:
Equifax: 800-525-6285
Experian: 888-397-3742
Transunion: 800-680-7289
SSA Fraud Hotline: 800-269-0271
If a thief steals your identity and begins racking up debt:A) Contact the fraud units of the three credit reporting agencies. Request that your account be flagged and add a victim's statement saying, "MY ID has been used to fraudulently apply for credit. Call me at this number to verify all applications." Find out how long the fraud alert will be posted and how to extend it if you need to. Check your credit report and look for items you don't recognize.
B) Contact your credit card companies and financial institutions to report the fraud. Get new cards, have old accounts colsed with a memo stating, "account closed at customer's request." Follow up in writing.
C) Call the police and get the crime on record, then get a copy of the police report. Keep a log of all conversations including date, name, phone number, and the information provided.
D) Notify the Federal Trade Commission, which keeps a database of identity thefts. Phone: (888) FTC-HELP; Address: FTC, CRC-40, Washington D.C. 20580.
E) Notify you bank and if necessary, cancel checking and savings accounts and get new account numbers. Request a password that may be used in every transaction. Get a new ATM card, account number and password. Don't use your SS # or birthdate as a password.
F) Don't pay any bill or part of a bill resulting from identity theft.
Experian and TransUnion now allow residents of all 50 states to freeze their credit online. With Experian, it takes about 90 seconds. With TransUnion, 3 minutes. Want to find out how to do it?
Follow the bolded links on Clark's guide! So what's going on with Equifax? Currently, only residents of 4 states -- Georgia, Iowa, New Jersey and Wyoming -- can freeze their credit online. Those are the 4 states that are required by law to allow their residents the online option. But by Nov. 1, Equifax expects to make the online option available to residents of all other states too.
Please note that while a credit freeze can help shut down economic ID theft, it will
not help eliminate criminal identity theft. That's where crooks use a fake ID with your information.
In order to tackle criminal identity theft, local law enforcement will have to move to electronic fingerprinting and/or iris reading to make sure a suspect is who he or she claims to be.
Little by little, we are getting the tools we need to stop ID theft. It's only been more than a decade coming! Clark recalls that it all started with a couple named the Foleys in San Diego who founded the
ID Theft Resource Center after it happened to them.
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Clark was recently disturbed to learn that your personal info can float out in cyberspace long after you think it has been removed. This is because of caching issues.
Search engines send spiders out across the web to find info that's stored on servers all over the world. Then they present that info to you during a web search.
But the spiders only crawl certain parts of the web every few days or weeks. So info can be stored or "cached" in cyberspace even after it's gone from the original server. In most cases, there will be a lag before it disappears completely.
When it comes to browser security, Clark uses a free tool available at
Finjan.com. It prevents him from going to mistyped addresses where danger may lurk, and it goes beyond just looking at URLs to look at the actual code on a page.
Meanwhile, here's one low-tech suggestion to beat keyloggers. A keylogger is a program that gets secretly installed on your computer when you visit bogus websites. It can be used to track every keystroke you make and steal valuable passwords.
This trick involves typing passwords out of order or adding extra characters that you goes back and erases before logging on. Say for example your password is "jane." Instead of typing "j-a-n-e," try typing something like "j-a-x-n-x-e." Then go back and manually erase the extra characters (the x's)
using your mouse, not the keyboard, and you just may trick someone who may be remotely monitoring your keystrokes!
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Syndicated financial writer Kathleen Pender has calculated that 65 million Americans are paying for credit monitoring or fraud alert services right now. That's about 1 in 4 adults!
These "services" can cost you from $6 to $15 per month. They're marketed very effectively on radio, TV and the Internet and try to play on your fear.
But the real problem is that fraud alerts are routinely ignored. And with credit monitoring, you'll only learn after the fact if unauthorized lines of credit are opened in your name.
In reality, there's only one effective way to prevent criminals from using your credit to make purchases. It's called a credit freeze and
Clark has prepared a guide to help you navigate the process of applying for one.
With a credit freeze, you shut down a criminal's ability to do anything with your info -- even if it should be compromised. That's because you get a secret code
that only you know. The one-time cost of a credit freeze varies by state from free to $10 per credit bureau. Compare that to a monthly fee for monitoring or reporting! Should you have to apply for new credit, you'll need to "thaw" your records. Again, the cost will be from zero to $10 per bureau.
Many talk-show hosts are currently doing spots for one popular credit monitoring/fraud alert service called LifeLock. While this is a legitimate company, Clark wants to emphasize that you shouldn't waste your money.
Our senior producer Kim froze her credit with all 3 bureaus. She used the info contained in Clark's guide and found the whole process only took her about an hour. It's all been very painless so far; she didn't even need to thaw her credit when she opened a new checking account or switched her auto insurance.
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RIP-OFF ALERT: Clark recently spoke about protecting yourself online against cyber-criminals. Now technology columnist Walt Mossberg has compiled
a handy list that reinforces the message. Below are some excerpts:
• Never click on a link in an e-mail that appears to be from your bank, credit union or brokerage. Call the company if you are in doubt.
• Don't click on links in an e-mail offering free goods or services.
• Never download free software from unknown websites.
• Don't download video drivers from sites other than Microsoft, Adobe or Apple.
Clark also wants to add that you should be using a browser like Firefox, which is safer than Internet Explorer. Please note that it's OK to download new security patches from Firefox.
People have been asking Clark about that website he recently discussed that blocks suspect sites from loading in your browser. It's
HauteSecure.com.
Finally, Mossberg also recommends a free service from McAfee called
Site Advisor that alerts you when a web address could be dangerous.
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If you've ever seen or heard a LifeLock ad, you know that CEO Todd Davis proudly announces his Social Security number – essentially challenging thieves to steal his identity.
Clark is often asked about whether or not Davis' company offers a legitimate service. First off, yes, LifeLock is a legitimate company. However, Clark doesn't believe they're very effective at protecting your identity. Now the CEO is being sued in Maryland, New Jersey and West Virginia by customers who say his service doesn't work.
LifeLock's business model is based on repeatedly putting fraud alerts on your credit files. These alerts are meant to raise a flag to potential creditors so they carefully verify an applicant's identity. Too often, however, the alerts are ignored and credit is extended anyway to thieves using your name.
The truth is there's no perfect way to prevent ID theft. In the event of a theft, the banks and credit-card companies know it's cheaper to deal with write-offs
after the fact than to institute industry-wide practices to end the threat before it begins.
So what's the best available solution? Do a credit freeze. This will shut a criminal down cold when it comes to applying for credit in your name. They can still take a card from your wallet and charge it up, though. But that's the least harmful crime in this arena.
Credit freezes are not a panacea and can be somewhat of hassle to establish. That's why Clark has compiled his
credit freeze guide to help you through the process. When you do want to use credit again, "thawing" your records can take from a few minutes to a few days, depending on your state of residence.
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The latest Internet Security Threat Report shows that the value of stolen info has declined as the crime of ID theft spikes. Who knew that supply and demand even drove prices in the criminal underworld?!
A stolen credit card number now nets a measly 40 cents! That sum used to be at least several dollars higher. Your bank account number now goes for about $10. And get this -- your entire identity (credit card number, Social Security number, name, address and date of birth) now goes for just $2! Stolen info is that prevalent; in just the first 90 days of 2008, more than 8 million people had their data breached.
Business owners face an added burden when it comes to certain kinds of ID theft. Under the Uniform Commercial Code, they may be held partly or totally responsible if their own credit card or business checking account number is used for phony charges. Consumers would be protected under the same circumstances, but not so with businesses. So it's imperative to keep your check book locked up at the office if you're a business owner.
For consumers, be sure to monitor your credit card statements closely. You have 60 days to dispute any fraudulent charges. And consider
freezing your credit. It's the best preventative medicine you can take.
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Both sides of the aisle are advocating the idea of a gas tax holiday this summer. Yet Clark thinks this is one of the craziest economic ideas he's heard recently. We're all hurting as we watch the dollars fly and the gallons crawl at the pump. But the gas tax holiday is a recipe for financial disaster. It would increase demand and ultimately drive up prices.
Brazil is one country that's made some smart decisions in the energy realm. The South American nation was even more dependent on foreign oil than we were during the last energy crisis in 1979. So they embarked on a program of energy independence using sugar. Our Brazilian allies now provide for 100% of their energy needs and can export additional sugar as well.
Sugar produces a fuel that's more efficient than the corn-based ethanol we use. So why aren't we getting Brazil's exports? Domestic sugar producers have gotten Congress to put up trade barriers to keep it out of the marketplace. Meanwhile, our farmers have turned to growing their corn crop for fuel use, not for food. That, of course, further drives up the price of food!
We continue to use foreign oil from those who want to destroy us, instead of using sugar from our allies in Brazil. It makes no sense to Clark.
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The latest figures show that ID theft continues to grow at an alarming pace. The feds report that 8.5 million people had their identity stolen last year. But other private industry reports put that number between 12-15 million last year. ID theft can range from a minor aggravation to a full-on tragedy. In the latter category, Clark has heard numerous stories over the years of ID theft taking place within families. There are instances where a father will steal the ID of a son, or a mother of a daughter.
So what can you do about ID theft? Try freezing your credit file. Credit freezes are now available in all 50 states from all 3 credit-reporting bureaus. See
our credit freeze guide if you're having trouble navigating the often-confusing application process. Credit freezes shut down ID thieves cold. A "perk" is that you also shut down
your ability to make an impulse purchase with a new line of credit! You'll pay a nominal fee to do a credit freeze or thaw. But the cost will be nothing compared to the hassle you could have if you leave yourself unprotected. A cautionary tale comes to us from Britain, where the government recently lost the data files of 25 million people in one fell swoop. Now criminals have all the info they need to wreak havoc. The British prime minister is understandably facing a firestorm of protest.
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