What Is Identity Theft? How Can You Prevent It?
Identity theft can ruin your credit and recovery can be time consuming and expensive.
What Is Identity Theft?
Identity theft is when an unauthorized person uses your personal information to access your financial accounts, open new accounts, or commit a crime.
How do Thieves Steal Personal Information?
- Going through trash or recycling bins
- Stealing mail
- Stealing wallets and purses
- Phishing—emails or phone calls asking for your account or other private information
- Pharming—fake websites enticing you to provide your information
- Skimming—using a data storage device to capture your credit card or debit card number
- Hacking—illegally gaining access to a computer system
- Planting a computer virus or using spyware
How to Protect Yourself
Your personal information is as good as gold to an identity thief, including your:
- Social Security number
- Driver's license number
- Passwords and PINs
- Credit or debit cards and checking account information—your bank's routing number and your checking account number
What can you do to keep this information out of the hands of thieves?
Make sure to store documents containing personal information in a secure place. Shred any documents containing personal information before putting them in the trash.
Available Identity Theft Protection Services
There are services that promise to protect you from identity theft—for a price.
- Credit Monitoring is available from all three nationwide credit reporting agencies for about $15 a month, allowing you unlimited access to your credit report and notifying you of any suspicious activity. Free resources are available from Identity Theft Resource Center.
- Identity Theft Insurance, available from credit card and insurance companies, covers the cost of certified mail and long-distance calls you make to clean up your credit, but won't reimburse you for the money lost.
Take note that neither of these services actually prevent identity theft, but simply help out if it happens to you.
How to Detect Identity Theft
Even if you're very careful to protect yourself from identity theft, there's still a chance it could happen to you. How do you know if your identity has been stolen?
Some signs you've been a victim include:
- Being denied credit when you should qualify.
- Not receiving your usual bills and bank statements.
- Suspicious activity on your bank or credit card statements.
- Receiving calls from debt collectors on accounts you don't recognize.
- Receiving medical bills for services you didn't use.
- Being rejected by your health plan for a legitimate medical claim because the records show you've reached your benefits limit or your medical records show a condition you don't have.
- Being notified by the IRS that more than one tax return was filed in your name, or that you have income from an employer that you don't work for.
- Receiving notice that your information was compromised by a data breach at a company where you do business or have an account.
One of the best ways to make sure you haven't been a victim of identity theft is to monitor your credit report. Spread your three free credit reports from each of the major nationwide consumer reporting agencies out over the year. Request them at AnnualCreditReport.com.
What to do if it Happens to You
If you're a victim of identity theft, you should not be liable for charges and bills racked up by an identity thief, but only if you take the following steps:
Contact one of the nationwide credit reporting agencies and place a fraud alert on your credit report. That agency will notify the two other credit reporting agencies. It might be a good idea to follow up later with an extended fraud alert.
To help prevent further misuse of your identity, consider placing a security freeze on your credit reports.
How Great Lakes Keeps Your Information Safe
Want to know more? Watch these videos to find other ways you can detect and prevent identity theft.