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Identity Theft: Tips for Reducing Risk of Fraud
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by Jodi L. Tuttle, Esq., General Counsel and Director of Legal Affairs, INDIANA ASSOCIATION OF REALTORS®, INC.
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What does identify theft have to do with buying, selling, or owning a home? In addition to severely damaging credit records, individuals may have difficulty securing loans including home loans, often have equity stripped from their homes, and in some cases may ultimately lose their homes. According to the U.S. Federal Trade Commission, identity theft is one of the fastes growing white-collar crimes in the nation. It can adversely affect your credit records. Basically, it occurs when a person intentionally appropriates personal information (i.e. name, address, income, social security number, credit card numbers, etc.) without another person's knowledge in order to commit fraud or theft.
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- How Personal Information is Appropriated
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Identity thieves often steal wallets, purses, mail, bank statements, credit card receipts and statements and tax and financial information. Some thieves actually divert a person's mail to another location by completing a change of address form. For other thieves, it may be as simple as picking through trash bins and dumpsters in order to obtain personal information. Some may use telephone scams, frequently with elderly persons, in order to get individuals to give out their personal information. Many people store personal information and use "automatic login" features on laptop computers, and thieves are able to access such information by simply stealing the laptop. Some individuals are not prudent in how they share information on the Internet and become easy targets for identity theft.
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- How Personal Information is Used
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Many thieves open new accounts using personal information including credit card accounts, bank accounts and new telephone and cell phone service. After such new accounts are established, identity thieves are able to run up charges, write bad checks, drain bank and other accounts and take out various loans for large items without ever paying for them. Unfortunately, the appropriation and abuse of a person's personal information can cost several months and hundreds of dollars in clearing up and repairing damaged credit records not to mention the resulting mental anquish that certainly accompanies identity theft.
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- Tips for Reducing Identity Theft
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At least once per year, a person should check their credit reports and spouse's, if applicable, with each of the three national consumer credit reporting agencies at www.equifax.com, www.experian.com,and www.transunion.com . The goal is to catch credit mistakes before they impede any important transaction like a home purchase. You should shred or destroy all disposable legal and financial documents, including but not limited to, old tax documents, cancelled checks, preapproved credit card offers and bank and credit card statements. A person should be cautious where he/she is placing outgoing mail and faxes, receiving bank ordered checks and debit cards, and receiving new credit cards. A person should never give out his/her social security number unless absolutely necessary. For example, you may be able to substitute a driver's license number. Only carry the one credit or debit card youneed when out in public in lieu of carrying several cards at all times. You are wise to place unusual passwords rather than common information such as a birth date or mother's maiden name on all accounts, cards and computers. Last, the old saying "one person's trash is another person's treasure" is especially true with identity theft, and you should continually watch how you are disposing of personal information.
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Managing your personal information prudently and wisely greatly reduces your risk of fraud. Taking time to educate yourself about identity theft before it occurs is well worth the time and effort. At the very least, file a report with local law enforcement in order to "prove" to creditors and other interested persons that a crime actually took place, contact all applicable financial institutions and creditors in order to immediately close pertinent accounts, and report the identity theft to each of the above three national consumer credit reporting agencies. For more detailed information, you can visit www.ftc.gov or call toll-free 1-877-ID-THEFT.
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