By Andrew Housser
Every year, identity thieves misuse the personal information of more than 11 million Americans. This makes identity theft one of the fastest-growing crimes in the country. Identity theft occurs when someone uses your personal information to open a new credit card or other financial account for themselves. These unauthorized users also might attempt to use an existing account to make purchases.
You might discover your personal information has been compromised via a phone call from your credit card company. Card issuers monitor accounts for suspicious activity, such as large purchases or suspicious patterns, or repeated smaller purchases from one retailer. Or you may find out if a lender has denied you credit because your credit score is low – even though you always pay bills on time. Often, victims of identity theft have a low credit score because an imposter has racked up unpaid charges under their names.
Today's commonly used technology -- from computers and smartphones to social network sites -- makes all of us more vulnerable to identity theft. Still, you can take steps to better protect yourself.
Safeguard personal information. An identity thief is not always a stranger. About 13 percent of the time, a family member, friend or acquaintance misuses information. To be safe, keep important paper documents that contain your identification locked in a filing cabinet. Use passwords for your computer, phone and debit card that contain a mix of letters, numbers and symbols. Ideally, change these passwords every 60 to 90 days.
Pay attention to your credit. By law, you can request one free copy of your credit report from each of the three nationwide consumer reporting companies every 12 months. Review these reports carefully to ensure your personal information is correct and that nothing looks out of place (such as delinquent accounts that are not yours). Request credit reports at Annual Credit Report.
Monitor your accounts. Check your bank and credit accounts at least once a week. Immediately alert your bank or credit card company to any suspicious activity. They can close the account to prevent additional fraudulent charges and start the process of refunding your money. Another way identity thieves access your information is by stealing your mail. To thwart this activity, drop mail off in a postal mailbox instead of leaving it in your home's box for pick-up. Switch to online bank and credit card statements to keep sensitive information out of your mailbox. If possible, pick up new check orders at your bank instead of having them delivered to your home.
Be smart on social sites. Don't publish personal identifying information on social media sites. Data such as your birthday, mother's maiden name or pet's name often are the answers to security questions posed by creditors. Once you make them public, thieves can use them to access your accounts.
Shred documents. Always shred documents containing sensitive information like receipts, bank statements and bills. Never just toss them in the trash. Also shred offers you receive in the mail for new credit card accounts or credit card account access checks.
Take action fast. Contact one of the three credit reporting companies immediately if you believe your personal information has been compromised. They must report your alert to the other credit reporting companies. All three companies can issue a fraud alert on your account. This alert lasts 90 days and makes it harder for thieves to open other accounts in your name. At the same time, request free copies of your credit report from all three organizations.
If you find unauthorized accounts, send a notification letter via certified mail to the creditor and the credit bureau. Clearly identify each item that you are disputing (you can enclose a copy of your report with the items in question circled). Explain why a correction is warranted. You can find a sample dispute letter on the Federal Trade Commission (FTC) website. Lastly, submit a complaint form to the FTC. Print a copy of the report, called an Identity Theft Affidavit, and take it to a police station. You will need it to help you file an identity theft report. This report makes it easier to get fraudulent information removed from your credit report and stops a company from collecting on debts that occurred as a result of identity theft.
The Federal Trade Commission estimates it takes six months and 200 hours of work to recover from identity theft. Most of this effort involves placing phone calls and writing letters to creditors, and working with credit bureaus and law enforcement agencies. Fortunately, it is possible to save yourself from this headache most of the time by making sure to take the necessary precautions to protect personal information.
Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.