Let me begin by sharing a scenario with you. Jared has made the decision to purchase his first home. He has excellent credit so he has no concerns with obtaining a loan for his house. Jared applies for the loan only to be rejected by the bank. He’s a little confused so he pulls his credit report for review. Upon review, Jared notices numerous credit inquiries and credit cards that he never had. He has been a victim of identity theft and Jared is facing a lot of time and effort to restore his credit.
Or another example that I’ve been seeing a lot on our Common IRS Questions page – you go to submit your tax return and see your tax refund is delayed. You call to find out why, and learn that someone else filed a tax return with your name and SSN on it already. Now you have to wait over 9 weeks to get it resolved with the IRS and deal with the headache of having your identity stolen.
Or in my case, I ordered a box of checks and they never arrived. I started seeing checks being written at retail stores. I had to call my bank, cancel my checking account and get it changed, and then file a police report. It took months to get the transactions disputed and it was a real headache.
Identity Theft Is Sadly Common
Identity theft is one of the worst things that can happen to a person and yet it is becoming more and more common. With the advancement of technology these days, it’s really not hard for someone to obtain all of your personal information and make it their own. Not to mention, we sometimes do careless things that may make it easier for someone to assume our identity. Understand that anyone can purchase ID Card Printers and make an ID that is your name with their picture. Your identity is then effectively stolen.
Furthermore, you can have your identity stolen at the gas station, at a store, and online. Remember hacked emails from the election? If that was you, they’d be using your email to access your bank accounts.
Steps To Prevent Identity Theft
There are steps that can be taken to decrease your likelihood of becoming a victim. The best thing that you can do so that you don’t become a victim is to keep track of your credit. I recommend using Credit Karma – it’s free, and it will alert you to new credit activity.
Also, check your credit report at least once a year. You can check your credit report for free annually at AnnualCreditReport.com. This is a much more detailed look at your credit history than what Credit Karma provides.
It is best not to wait until you want to apply for credit before you take a look at your credit report. Another good tip is to make sure you shred any mail that has your personal information before you throw it away. Usually trash is a breeding ground for thieves.
Sometimes we make it too easy for a thief to steal our identity. We do things that most people really wouldn’t think twice about. One culprit is none other than “social network sites”. When you fill out the information in the section labeled “Info, About Me, etc” it contains key information for a thief to use. Information such as Birthplace (or Hometown), Date of Birth, High school attended, etc., are items typically asked for security questions. Keep that in mind the next time you log on to your social network page.
Finally, when doing any type of online banking (or even social media), use two factor authentication. This is where you can get a text message with a verification code to login to a secure website. The benefit of this is it requires you (or your phone at least) to be present to access your information. If someone does steal your email and maybe guesses your password, they still can’t access your information.
What To Do If You Are A Victim
The one thing that you need to know if you ever become a victim is to take action immediately. Contact any and every company that looks unfamiliar to you on your credit report. You have many rights as an identity theft victim and it is your job to become familiar with them. It is important to research as much as possible about options that are available to you.
It is also important to file a police report. This report will be useful as you petition all of the fraudulent charges or other things the identity thief may have done.
Unfortunately, becoming an identity victim can happen even if you do everything right; however taking the necessary precautions can significantly decrease your chances. The important thing is to be aware, keep up with information on your credit report. Don’t be so quick to volunteer personal information about yourself. A little precaution can go a long way.
Pointers to Avoid Identity Theft
- Keep track of your credit (check your credit report periodically)
- Don’t volunteer personal information on social network sites
- Shred any mail that has personal information before you throw it away
- Be Aware (it’s not being paranoid, but just staying informed)
Readers, have you ever been the victim of identity theft? What other steps do you take to prevent becoming a victim?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.