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So You’ve Heard About The TJX Computer Hacker…Identity Theft Can Happen To Anyone

  

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Identity theft affects 1 in every 23 American consumers, costing each victim an estimated 600 hours and thousands of dollars trying to recover.* Chances are you or someone you know has been affected by identity theft. If not, you know one now because I have been victimized two times in the last 10 years.

Fortunately, neither took more than a few hours to work out and each time my credit card company was there for me. The first time my credit card number had been taken, I had paid for gas at a convenience store/gas station. My credit card company called me because they realized that I did not typically charge phone calls to foreign countries. The card was cancelled and the charges were reversed which was relatively easy since it was caught early. The second time was two years ago. One day I received a pound of coffee delivered by UPS.  At first, I was not thinking identity theft and did not dwell on it since life was busy.  Within a week I received another package which finally prompted my investigation. It took more than a few hours communicating with the coffee company and my credit card company to work it out. The scary part was that I have no idea how the card number was taken.

Both of these instances were relatively minor. While I believe that most identity thefts are of this nature, they did bring to mind the possibilities which could be much more painful to deal with. In addition, I recently learned from a friend that their son had his identity stolen. The person who stole it got a license in his name and purchased a car by taking out a car loan. He learned of it when he got a letter from the bank notifying him that the car was going to be repossessed.

I think most would agree that the risk is real, so what can be done?  Start with prevention. This list has some good ideas which we should all keep in mind.

Tips for Avoiding Identity Theft**

• Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card or passport unless absolutely necessary.
• Guard your credit card when making purchases. Shield your hand when using ATM machines or making long distance phone calls with phone cards. Don't fall prey to "shoulder surfers" who may be nearby.
• Always take credit card or ATM receipts. Don't throw them into public trash containers, leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.
• Don't give out personal information. Whether on the phone, through the mail or over the Internet, don't give out any personal information unless you have initiated the contact or are sure you know who you are dealing with and that they have a secure line.
• Proceed with caution when shopping online. Make sure that you are buying from a reputable retailer with a secure network ( Website should read https (s = secure))
• Do not fall for online or email scams. Be wary if you receive email solicitations for personal information. In online scams like "phishing," thieves use email inquiries purporting to be from financial or other online organizations in order to obtain sensitive account information.
• Monitor your accounts. Don't rely on your credit card company or bank to alert you of suspicious activity. Carefully monitor your bank and credit card statements to make sure all transactions are accurate. If you suspect a problem, contact your credit card company or bank immediately.
• Order a copy of your credit report from each of the three major credit bureaus. A new law that took effect December 1, 2004, entitles you to one free credit report per year. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you've been sued, arrested or filed for bankruptcy. Make sure it's accurate and includes only those activities you've authorized.
• Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother's maiden name, your birth date, any part of your Social Security number or phone number, or any series of consecutive numbers. If you suspect a problem with your credit card, change your password.
• Shred any documents containing personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

So you do what you can to be smart and careful, but we know that something could slip through the cracks or that a new scheme could be developed. This is why identity theft insurance may make sense. Did you know that most homeowner's insurance companies now offer a rider which includes coverage for identity theft for less than $3 per month? In most cases, these policies would give you access to an identity fraud specialist who can guide you through the process.  These riders will typically pay the expenses that you will incur to solve the problem but they generally do not pay for the money that you lose as a result of the scheme. Expenses that are covered can include:

• Cost for notarizing fraud affidavits
• Lost wages to take time off from work to meet with or talk to, law enforcement agencies, credit agencies and or legal counsel, or to complete fraud affidavits or due to incarceration arising from someone else committing a crime in the insured's name.
• Attorney's fees to defend lawsuits from merchants or their collection agencies or to remove criminal or civil judgments wrongly entered against you.

Feel free to contact us, if you have any questions.

* 2005 Identity Fraud Survey Report, released by the Better Business Bureau and Javelin Strategy & Research

** Insurance Information Institute