ID thefts prompt warning on credit
By Sandra Block
Horror movie fans know that the creepiest threats are the ones you can't see.
That's why identity theft is so frightening. Many people don't know they've been victimized until their credit report is so damaged that they're rejected for a credit card, car loan or home mortgage.
It can take months, even years, to repair.
Last week, federal authorities charged three men with using stolen passwords to filch credit reports and steal from thousands of consumers.
While identity theft is one of the fastest-growing crimes in the United States including Hawai'i, according to state and local officials last week this case is particularly scary, says Beth Givens, director of the Privacy Rights Clearinghouse.
"The credit report is the mother lode of information," she says. Along with information about existing credit card accounts, it provides an individual's date of birth and Social Security number, which can be used to open fraudulent accounts, she says.
If you think you're among the victims, or worry about identity theft in general, don't panic. Under the federal Truth in Lending Act, you usually can't be held liable for more than $50 in unauthorized charges per credit card. Many financial institutions won't hold you liable for any fraudulent charges.
That doesn't mean identity theft is a victimless crime. Many people spend months, even years, trying to clean up their credit reports. In some cases, individuals have been arrested after a thief committed a crime in their name.
How to minimize the damage:
Request copies of your credit report from all three credit bureaus. Look for unauthorized charges and fraudulent accounts opened
in your name. Even a misspelled name or wrong address could be a sign of trouble, says Betsy Broder, an assistant director at the Federal Trade Commission.
Scrutinize the "inquiries" section of your report, Givens says. A spate of inquiries may indicate that a thief is trying to open accounts in your name, she says.
Even if the thief fails to open an account, a jump in inquiries may hurt your credit score, which lenders use to gauge your ability to repay loans.
Depending on your state, you'll pay $8 to $9 per credit report. Givens recommends checking your reports with all three credit bureaus every six months.
You should also examine your monthly credit card bills for unauthorized charges, Givens says.
If you suspect identity theft, contact the credit bureaus' fraud departments. All three have toll-free numbers for fraud victims. Ask them to place a fraud alert on your account, which flags creditors that someone may try to open fraudulent accounts in your name. Also, ask the bureaus to include a statement asking creditors to contact you before opening accounts or changing existing accounts. Include a phone number where you can be reached.
Most fraud alerts expire in three to six months; that may not be long enough to protect you, Givens says. She recommends sending a letter to the credit bureaus requesting that the alerts remain on your account for seven years, the maximum most allow. You can always cancel the fraud alert before then.
Fraud alerts aren't foolproof: Not all creditors pay attention to them. But they'll make it harder for thieves to open accounts in your name.
Close all unauthorized accounts or accounts that have been tampered with. The FTC provides an identity theft affidavit on its Web site (www.consumer.gov/idtheft) that you can use.
File a report with your local police or in the community where the identity theft occurred. Get a copy of the police report. You may need this to demonstrate to credit- card companies and other lenders that you've been victimized.
Keep good records. One of the most unsettling aspects of identity theft is that it can haunt you for years after the crime occurred. Documenting your case will provide your best defense.