3.1.g1 © family economics & financial education – revised october 2004 – consumer...

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© Family Economics & Financial Education – Revised October 2004 – Consumer Protection Unit – Identity TheftFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

Protecting Your Credit Identity

Identity Theft

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IDENTITY THEFT occurs when someone wrongfully acquires and uses a consumer’s personal identification, credit, or account information.

Identity Theft

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Identity Theft• Consumers spent 26 billion dollars

online.

• The dollar loss suffered because of identity theft from consumers was 343 million in 2002.

• The number of identity theft complaints filed in 2002 was 380,000 almost double from the 204,000 complaints in 2001.

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• Name• Address and Telephone Number• Social Security number• Driver’s license number• Bank account numbers• Credit card numbers• Passwords• Bills

Personal Identification Information Includes

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• Wallet/Purse Loss or Theft - Information is taken from a lost or stolen wallet/purse (most common method).

• Mail and Phones - Information is taken from mailboxes, a change of address form is completed, or personal information is solicited by phone.

• “Dumpster Diving” - Personal information is discarded carelessly either at home or by businesses and thieves remove it from the trash.

• “Insider Access” - Dishonest employees steal the information and either sell it or use it.

• Internet - Personal data taken off the Internet• Credit Reports – A credit report containing personal

information may be obtained fraudulently. Check credit report annually.

Ways Identity Thieves Acquire Information

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• To apply for a new driver’s license• To open new bank accounts• To apply for credit cards or store

credit accounts• To obtain cash with bank cards• To get a job• To rent an apartment• To make retail purchases

How Information Can Be Used

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Credit Reports

How Theft Occurs:• Thief fraudulently orders a credit

report. – Credit Reports – include all the accounts a

person has, social security number, & personal information.

Prevention:• Check credit report once per year.• Don’t leave reports lying around.

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Mail

How Theft Occurs:• Thief steals mail to learn account

numbers and personal information.Prevention:• Deposit outgoing mail in post office

collection boxes not unsecured mailboxes.

• Promptly remove mail from mailboxes.• If on vacation, put a hold on mail.

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Wallets and Pocketbooks

How Theft Occurs:• Thief steals a wallet or pocketbook

containing a wealth of personal information.

Prevention:• Don’t leave it in plain site.• Don’t hang from chair at public place.• Use a purse which closes securely.• Carry only what is absolutely needed.

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Bills

How Theft Occurs:• A thief may steal bills containing

consumer’s name, address, phone number, bank or credit account numbers, or social security.

• May use information to open new accounts.

Prevention:• Don’t leave statements lying around.• Pay attention to billing cycles and follow

up if bill does not arrive on time.

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Passwords

How Theft Occurs:• If a thief has access to passwords,

he/she can access accounts, send messages, and sell or purchase items.

Prevention:• Don’t give password to anyone.• Don’t write passwords down where

others may find them.• Create unique passwords using a

combination of numbers and letters.

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Work Records

How Theft Occurs:• A thief who has access to work

records may have a person’s personal information, social security numbers, or bank information.

Prevention:• Ensure personal records are locked

securely with limited access by employees.

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Pre-Approved Credit Cards

How Theft Occurs:• A thief may activate credit cards

using pre-approved credit card offers and have the statements sent to a different address.

Prevention:• Shred any credit card offers

received and not used.• Cut up any pre-approved credit

cards not used.

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Bank Account Information

How Theft Occurs:• If a thief has a person’s bank

account and routing number, he/she may create fake checks, withdraw money, or access savings accounts.

Prevention:• Don’t leave statements lying around.• Use passwords.• Don’t have checks mailed home.

Pick them up at the bank.

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Social Security Number

How Theft Occurs:• A social security number is the key to a

person’s identity. It opens new accounts, obtain driver’s license, file bankruptcy, etc.

Prevention:• Never give our social security number.• Ask for alternate number on driver’s

license, insurance cards, and other materials.

• Do not carry social security card unless necessary.

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ATM, Credit, and Debit CardsHow Theft Occurs:• A thief may withdraw money with

both an ATM card and PIN number.• Credit and debit cards are easy to

use because most stores do not compare cards with another form of identification.

– Can easily be used to purchase merchandise over the phone or internet.

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ATM, Credit and Debit Cards

Prevention:• Don’t leave cards lying around.• Carry only those which will be used.• Use debit cards which require a PIN

number.– Do not write PIN number down in same

place debit card is kept.• Carry cards in separate holder from

wallet.• Sign back of cards stating “Please see

I.D.”

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ATM, Credit and Debit Cards

Prevention cont.:• Have a list of all cards and account

numbers.• Don’t give out account number unless

making a purchase.• Keep track of all receipts.• Destroy papers with card numbers on

them.• Check statements for unauthorized

charges.

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Identity Theft

What to Do if

Identity Theft

Happens

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Immediate Steps

1. Act immediately!2. Keep a detailed record of correspondence and

phone records.3. Contact the three major credit bureaus and

request a “fraud alert.” Equifax, Experian, Trans Union

1. Follow with a letter sent by certified mail.

4. Close all accounts which have been tampered with or opened fraudulently.

5. File a police report.6. File a complaint with the Federal Trade

Commission.

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Credit Card Liability

• Truth in Lending Act limits liability for unauthorized charges to $50.00 per card.– A letter must be received within 60

days of the first bill containing the error.

– The dispute must be resolved within 90 days of the creditor receiving the letter.

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ATM & Debit Cards, Electronic Transfers

• The Electronic Funds Transfer Act provides protection.

• The amount a person is liable depends upon how quickly the loss is reported.– Within two days is a maximum of $50.00.– Within sixty days is a maximum of $500.00.– After sixty days a person may be liable for

everything.

• To report a loss call the financial institution and follow up in writing.

• Get new bank numbers, personal identification numbers, and passwords.

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Check Liability

Checks• Contact the financial institution and

stop payment.• Notify the check verification service.• Most states hold the financial

institution responsible for losses of a forged check.

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STAY ALERTBE CAREFULBE SMART

Identity Theft

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