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By Sills, January 15, 2010 2:58 PM

This article was originally published on CBS’ Money Watch website and was written by Barbara Bedway

Don't let it hapen to you!

By the time Lynda Rodriguez saw her BMW’s smashed front window and realized her purse was gone, thieves had already rung up $4,000 in charges not far from her Scottsdale, Ariz. home. Though Rodriguez, 47, acted quickly to shut down her credit card and bank accounts, her purse’s contents — including her pay stubs, checkbook, driver’s license, and medical ID as well as assorted credit cards — still held a potential bonanza for anyone intent on identity theft. That’s because personal information can be sold and traded among criminals for years after it’s stolen, making identity theft the crime that keeps on taking.

Rodriguez, who works in commercial real estate, learned that lesson last June, two years after the break in. That’s when she discovered the reason she hadn’t received her American Express bill: Someone had called AmEx to get the address changed and order a new card. The crook used the new card to charge $4,500 at the Bellagio in Las Vegas. In a Kafkaesque twist, Rodriguez says AmEx refused to provide her with the forwarding address the thieves used, claiming a “right to privacy” issue … for the thieves.

As Rodriguez found out, identity fraud is booming, due in part to the tough economic times. There were 9.9 million victims in 2008 (the most recent figures available), up 22 percent from 2007, according to estimates by Javelin Strategy & Research, a financial-services consulting firm. Javelin president James Van Dyke predicts the numbers will stay high “until more people are fully employed and economic pressures lessen.” Because identity thieves come out in droves during the holiday season, as MoneyWatch blogger Kathy Kristof points out, you may have recently been victimized without even realizing it yet.

What exactly should you do if your identity does get stolen? You may be surprised. In general, you’ll need to multitask at warp speed to minimize the damage to your accounts and to prevent new accounts from being opened in your name. As you contact authorities and financial institutions, keep a detailed log of each conversation. Then confirm what was said in writing by sending a copy of your notes by certified mail, return receipt requested. That way, if your contact leaves or fails to follow up, you’ll have a record.

Here’s a step-by-step guide to follow in case you do become an identity theft victim:

1. Put a Fraud Alert on Your Credit Reports

This is your very first step, even before you call the police, since credit bureaus are better able to shut down new attempts at fraud. Call the three major credit reporting firms (TransUnion, 800-680-7289; Experian, 888-397-3742; Equifax, 888-766-0008) and ask for the alert, requiring merchants to get your approval before granting new credit in your name. “You want to do anything you can to put up a barrier to new false credit being issued,” says Mari J. Frank, an attorney and author of the forthcoming The Complete Idiot’s Guide to Recovering from Identity Theft. Though in theory, you need to tell only one bureau to place an alert — that one is supposed to pass the word to the others — Frank recommends contacting all three to be sure the job gets done.

Fraud alerts normally can be renewed after they expire every 90 days, but once you’ve established you’re an ID theft victim, you can ask the bureaus for an extended alert lasting seven years.

2. Order Your Credit Reports

Once you get the fraud alert, you’re entitled to one free copy of your credit report from each credit bureau. Order these and scour the reports for unauthorized charges. Pay special attention to the “Inquiries” section, which lists businesses that obtained your report for the purposes of issuing you credit. “If you see a Kohl’s on there and you haven’t applied for an account, that’s an early indication someone used your name to open an account,” says Frank. If you spot charges you didn’t make, tell the credit bureaus and your credit issuers in writing and request the bureaus remove all the fraudulently-initiated inquiries.

3. Report the Crime

File a report with the fraud or economic crime unit of your police department. It helps convince lenders and credit bureaus to take you seriously. (You may be told to also contact law enforcement in the city where the fraud occurred.) Be persistent if you encounter resistance: Overburdened police departments may not want to take a crime report, because it requires an investigation. But “your local law officials have a duty to provide you with at least an informational report under most state laws,” says Frank.

If you have trouble getting a report, you may be able to obtain one from a state or federal law enforcement agency or the U.S. Postal Inspector, if the crime involved fraudulent use of the mail. The Federal Trade Commission has details.

4. Fill Out an Identity Theft Form

The Federal Trade Commission has developed an identity theft affidavitthat you can send businesses and creditors when a new account is opened in your name, to help document that a thief used your personal information to open the account. “It’s a kind of summary of what’s happened to you,” says Frank.

5. Notify Banks, Creditors, and Utilities

Ask to speak to someone in the security or fraud department to close all accounts a thief used. You can find the phone numbers on the back of your credit card and account statements. If you don’t have recent statements, Credit.com lists the ID theft contact info for many financial institutions.

Follow up by closing the accounts in writing, sending along copies of your police report, if you have one, and the FTC affidavit. The FTC and the Privacy Rights Clearinghouse have useful sample letters to help you document the fraud. Get new account numbers, PINs, and passwords for each account. If you have any recurring bills paid automatically out of your bank account, make sure you give merchants any new information they need.

6. Consider a Credit Freeze

If someone is still able to open fraudulent accounts more than a month after you’ve reported your identity theft, you may want to ask credit bureaus for a credit freeze. This drastic action prevents credit card issuers and lenders from looking at your credit report, which means they won’t grant new credit in your name while the freeze is in effect. (Because it can take several days to lift a freeze, you’ll need to plan ahead if you want to apply for a new card or loan once the freeze is in effect.) In most states, security freezes are available at no charge to identity theft victims. You can request a freeze online or in writing.

7. Keep Ordering Your Annual Credit Report

Since credit issuers aren’t always diligent about observing fraud alerts, you need to monitor your credit reports consistently to see if fraudulent accounts are opened in your name. You’re entitled to one free report each year from each of the three bureaus, in addition to the free reports you’re allowed when you place fraud alerts on your credit files. So a few months after getting your free credit reports from the fraud alert, order the free reports all consumers are entitled to receive through annualcreditreport.com; 877-322-8228. If you find a problem on the reports, contact the lender or credit issuer who provided the inaccurate data and make sure the firm has all the necessary documentation of the fraud.

Have you been hit by identity theft? Tell us your story, and what worked best for you, by signing in and adding a comment below.

BetterCredit101 recommends the following books on this topic: The Wall Street Journal. Complete Identity Theft Guidebook: How to Protect Yourself from the Most Pervasive Crime in America (Wall Street Journal Identity Theft Guidebook: How to Protect) and 50 Ways to Protect Your Identity and Your Credit: Everything You Need to Know About Identity Theft, Credit Cards, Credit Repair, and Credit Reports

Additional Resources:

myFICO is the ONLY place where you can get your FICO scores, the scores that lenders use, from all three credit bureaus.

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identity theft

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By Sills, December 30, 2009 8:32 PM

It starts with a sign – a sudden drop in your checking account balance. A call from a debt collector about a cell phone service plan or credit card you never signed up for.

The first sign that you’ve been a victim of identity fraud is always unsettling. But for many people, that first sign is just the beginning. Depending on the skills and determination of the thief, and the length of time it happens, the damage could be much greater. On average, victims of identity theft spend 500 hours and more than $3,000 repairing the damage.*

The mental and emotional stress can be significant as well. The creditors and debt collectors you have to deal with aren’t concerned with the fact that your identity was stolen, they are focused on getting their money back.

Dealing with identity theft is never easy. Knowing what to expect is the first step toward being prepared.

Damaged Credit

The most common effect of identity theft is damaged credit.The thief runs up numerous charges in your name, doesn’t pay the bill, and your credit suffers. When you apply for a credit card, a mortgage, a new apartment, etc. you have a major strike against you.

Cost to Repair Damage

Erasing fraudulent charges and correcting your credit record takes time – and money. The average victim spends 500 hours and $3,000 undoing the damage from identity theft.

Financial Loss

One of the most devastating effects of financial identity theft is when the money you’ve worked hard to save suddenly goes missing — the work of thieves who got your ATM card or checking account information. Bank policies vary as to how much they will replace, but for many victims, this money is gone forever.

Medical Benefits & Health Coverage

If someone seeks treatment with your health insurance information, the thief’s treatments could show up on your record, be taken out of your benefits, and even disqualify you from new health insurance. And most dangerous of all, if the thief’s medical history is confused with yours, your own medical care could be jeopardized.

Criminal Record

If an identity thief gives your name and personal information when he or she is arrested, the crime goes on your record. Some victims of identity theft have even discovered they’re wanted in states they’ve never visited. The negative consequences range from legal fees or jail time to problems getting a job because of convictions on your record.

Social Security Benefits

If a thief gets your Social Security number, they can begin collecting your benefits or take a job using your name, leaving you liable for their taxes. Fixing this can take years of wrangling with government bureaucracy.

TrustedID has an effective proactive solution to identity theft prevention that has been recognized and praised by The Wall Street Journal, Newsweek, The Identity Theft Resource Center and The New York Times. Our subscribers enjoy our spyware protection for their computers, fraud flag placements, junk mail reduction, medical record, personal and financial data scanning, free annual credit reports and our $1,000,000 service warranty.

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By Sills, December 30, 2009 8:20 PM

Jewelry, electronics, your car – in the past, if a thief wanted to rob you they stole your valuable possessions. But in today’s information-based world, there’s something even more valuable that thieves can take from you: your identity.

Armed with personal information such as your Social Security number, credit card number, name, and address, an identity thief can drain your bank accounts and commit fraud in your name. It is possible that you won’t find out you are a victim until the thief is long gone.

More than 15 million people become victims of identity theft every year. An identity is stolen every two seconds in the United States – the fastest growing crime in the U.S. for the past four years.

How Identity Theft Happens

Your identity is one of your most valuable possessions. Your Social Security number, bank account numbers, and personal information are all a thief needs to commit identity theft.

How do thieves get your personal information? They use every trick in the book – and they’re constantly coming up with new ways.

Mailbox Raiding & Dumpster Diving

Mail from banks, institutions, and even new credit card offers contain valuable personal information which identity thieves can use to drain accounts and open new credit cards in your name. They get the information by stealing mail right out of your mailbox, or as in the case of dumpster diving, out of the trash after it has been thrown out.

Phishing

If you’ve ever received an email from a “bank” or other financial institution asking for account information, thieves could have been phishing for your identity. (The word is derived from “fishing,” because the emails are like bait.) Clicking on their link will send you to a site that looks the same as the actual institution, but actually belongs to the thief. When you enter your information, the thief has won.

Vishing

A combination of the words “voice” and “phishing,” vishing is like phishing, except the thieves use the phone instead of email. They may leave a message pretending to be your bank or some other company. When you call back, they’ll take your personal information.

Medical Benefits Fraud

Increasingly, thieves have started seeking treatment using another person’s name and medical insurance information. They can get it by stealing your wallet or hacking into a doctor’s or hospital’s computer system.

Spyware

Spyware is a malicious computer program that installs itself on your PC and then allows thieves to record your personal information – like a credit card number, password, or Social Security number.

Skimming

Skimming is a way for a thief to get your ATM or credit card information by installing their own card reader on an ATM machine. When you pass your card through the skimming device, it records your card information.

Corporate Data Breach

Trusted businesses, like your employer, your local bank, and other organizations have a great deal of your personal information stored on their computers. Thieves can gain access to this information by hacking into the network, by posing as a business partner, or after an employee loses a computer, disk or box of files.

Are you on Facebook and MySpace?

Social Networking Sites

Identity thieves are using social networking sites like Facebook and MySpace® to find out your personal information. They use the information they find on the site to pretend to be someone they’re not and coax other information out of you – like your Social Security number.

Child Identity Theft

Child identity theft works the same way as it does for adults: the thief acquires a child’s personal information, and then creates fraudulent accounts in their name. But because children usually don’t have financial accounts until they are older, no one may find out about the theft for many years, allowing the problems to be greatly compounded.

Senior Identity Theft

Seniors are particularly vulnerable to identity theft, because most have significant accumulated wealth, and are often unable to monitor their accounts carefully. Many are also less knowledgeable about technology, and more trusting of strangers and marketers, increasing their vulnerability.

Student Identity Theft

College students are another high-risk group. School registration days and frequent unsolicited offers for new credit cards provide many opportunities to share personal information and Social Security numbers. Combine that with frequent address changes and unforwarded mail and it’s a group ripe for picking by identity thieves.