Securing Your Financial Identity
It is estimated that 4.25% of American adults are subject to identity theft every year (Source: Money, July 2005). Approximately half involve credit card fraud, where a thief steals a credit card number and charges items to it. While an inconvenience, this does not have a lasting impact on a person’s financial identity, and the person does not have to pay the fraudulent charges. The more significant worry, which occurs in 25% of identity thefts, is when another individual obtains sufficient information to borrow money or open accounts in your name. According to a Federal Trade Commission survey, victims spend an average of 60 hours and $1,200 to clear their names.
To help protect your identity, follow these tips:
• Protect your Social Security number. This is the primary information needed to steal your identity, so only give it out in situations where it is absolutely required, such as on tax forms, employment records, and for banking, stock, and property transactions. Request a personal identification number for phone access to financial information. Don’t print your Social Security number on your checks.
• Check your credit report annually. As of September 1, 2005, all consumers are entitled to one free credit report per year. You can request it at annualcreditreport.com or by calling 877-322-8228. After that, you can get a report from one of the three major rating agencies, Equifax, Experian, and TransUnion, every four months. Review your credit reports carefully for errors. It is not uncommon to find information on people with similar names or other family members in your credit file. If you find errors, report them immediately in writing. The credit bureau must then investigate the items and resolve those that can not be verified. If the matter is not resolved to your satisfaction, you can submit a “statement of dispute” explaining your position, which must be included in your report. To obtain your credit report from all three rating agencies go to ManagingMoney.com Loans & Credit Center.
• Carefully share information online. Make sure you are dealing with a reputable company before giving personal information. Also review the site’s privacy policy, which should tell you how the information will be used and whether the site sells this information to third parties. Leave information blank, especially Social Security numbers, if you are uncomfortable providing the information. Provide sensitive information only from secure web pages. Looking at the web address will let you know if the page is secure — a secure connection will begin with https:// rather than http://.
• Shred financial information when discarding. When discarding old tax returns, bank statements, brokerage statements, or any information with account numbers or identifying information, make sure to shred them.
• Remove yourself from mailing lists. Preapproved credit card offers are an easy way for thieves to get credit cards quickly. Credit bureaus often sell lists to companies making these offers. You can call the credit agencies and request that your name be removed from these lists.
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