The Growing Problem of ID Theft
Over the past year the national news has been filled with stories of the U.S. government and U.S. military compromising our personal data. It started with the Department of Defense exposing 38,000 employees personal information to potential identity theft. Then, a computer hacker obtained the personal information of an unknown number of military employees. On May 3, 2006, a Department of Veteran Affairs employee lost a computer containing the personal information of 26.5 million veterans and active servicemembers. In June (reported to the news on July 26) two military recruiting laptop computers were stolen containing the personal information of approximately 31,000 individuals. And most recently, on July 27 the Florida Transportation Department reported one of its laptop computers stolen with the names, birth dates and Social Security numbers of 132,955 Florida residents.
At one point in time, the Bush Administration requested the allocation of more than $160 million dollars to provide one year of free credit monitoring to the millions of veterans and servicemembers impacted by the stolen VA computer. That request was later cancelled upon location of the VA laptop and FBI?s determination that the stored information was not accessed or compromised. On August 10, 2006, the Department of Veteran Affairs reversed its position and has arranged for one year of free credit monitoring for impacted veterans and active servicemembers.
How identity theft occurs:
Information used in identity theft may be acquired through numerous methods: stealing records or information from a business or other institution (federal or state government entity); computer hacking; stealing mail and trash (bank and credit card statements, credit card offers, and tax information); or stealing a wallet or purse.
Once in possession of the information a thief will have the ability to: change account addresses; incur fraudulent charges in your name; open new accounts (credit card, bank, etc.) or loans in your name; liquidating an existing bank or brokerage account(s); or obtain picture identification in your name.
If you become a victim of identity theft the following steps should be immediately taken:
(1) file a police report; (2) contact your credit card company(s) and financial institution(s) and notify them of the theft; (3) place a fraud alert on your credit report; (4) notify all government agencies (drivers license, passport, military, etc.) that have issued you a license or other identification document; (5) file a complaint with the Federal Trade Commission; and (6) close all accounts that have been tampered with or fraudulently opened. A fraud alert should only be utilized if you suspect you have been or are about to be a victim of identity theft.
Protection of your credit report:
An initial fraud alert (90-day duration) should be utilized if you suspect you are the victim of a scam, may be an identity theft victim, or a stolen wallet. An extended alert (7-year duration) should be utilized if you are a confirmed identity theft victim and require an identity theft report to be provided to the police or consumer reporting company. Both types of alerts will require a business, before issuing to you any future credit, to verify your identity.
All communications with the credit reporting agency should include: a copy of an identity theft report; written explanation of the fraud; and proof of your identity (name, SSN, address, etc.). The consumer reporting company will then have four business days to block the fraudulent information, after accepting your identity theft report.
Free annual credit report:
The Fair & Accurate Credit Transactions Act, passed in 2003, requires each nationwide consumer reporting company to provide you, upon request, with a free copy of your credit report once every 12 months. Requesting the free annual report will provide you with an annual method to insure the accuracy of your personal information. Eligibility for the free reports was phased-in between December 1, 2004 (western states) and June 1, 2005 (southern states).
Methods to protect your identity:
Since no one can control the actions of third parties there may never be a 100 percent secure method to protect your identity from theft. However, the following are several steps that you should follow to protect yourself: (1) place secret passwords on your credit card, bank, and phone accounts; (2) secure personal information in your home; (3) utilize security procedures in your workplace, and other institutions that collect your personal information; (4) inquire about disposal procedures for personal records; (5) insist that your personal information not be shared with anyone (individual or entity) without your written permission; (6) do not divulge personal information over the telephone, internet or through the mail; (7) estroy and shred all personal information in your mail (charge receipts, credit applications, insurance forms, physician statements, checks and bank statements, expired charge cards and unsolicited credit offers); (8)deposit outgoing mail in a post office collection box; and (9)utilize and update virus and "spy ware" protection software and a firewall program.
Options for military personnel:
Members of the U.S. Military, stationed away from their usual duty station, should place an active-duty alert on their credit reports. The active-duty alert will protect their credit, during deployment, remain in effect for one year and can be extended as needed. It is important to understand that an active-duty alert will remove the servicemember from credit reporting companies' marketing list(s), for pre-screened credit card offers, for two years. In a servicemember's absence, a fiduciary (power of attorney holder) may place or remove an alert on their behalf.