True Story of Identity Theft
After falling victim to identity theft for the second time in 5 years, it was clear that I needed a stronger defense against and better understanding of this particular crime. The experience has prompted me to revisit the topic of identity theft in this column.
As we all know from recent media reports, it is clear that identity thieves are increasing in number and skillset, attacking in a variety of ways. In the most recent incident, my identity was stolen and used to open numerous credit cards simultaneously online. In particular, the thieves opened an account through Barclays Bank, from whom we received a voicemail stating that “our credit line increase was approved”. There was no return number left, no name, and no other details in the voicemail message. After making calls to Barclays, I discovered that the thieves were able to successfully open the account online, and were immediately attempting to obtain a credit line increase. Because initial credit line maximums for new credit cards are relatively low, the thieves had decided they needed a larger amount in order to purchase the high value electronics they were after. Initial applications for credit can be done online. However, in order to obtain the credit line increase, the thieves needed to speak to Barclays over the phone and provide security information. They had set up a password with the fraudulent account when initially applying, but upon discovering the fraud, I quickly had it changed for fear of how quickly charges might accrue. It turned out to be a smart move, because just moments after I had changed it, the thieves (unaware of my password change) were attempting to use the account with their original phony password to make purchases. At the same time I was on the phone with Barclays finalizing the closure of this account, I received a phone call from a woman who could only have been the thief herself. She attempted to identify herself as a representative of Barclays, and attempted to get the security password from me, stating she needed it for her records. I switched between the 2 phone lines, confirming the real Barclays apart from this thief, and subsequently informed the thief that I was reporting her to the police and that she was to never call our number again.
Here is the information the thieves had: my name, my social security number, my date of birth, and my home phone number. That is all they needed to open a credit card account online in my name.
Actions I took following the second fraud incident; I immediately notified the Orange County Sheriff’s office and the 3 credit bureaus. The most important action I took was to put a 7-year victim consumer statement on my credit report. This is a self-worded, 100 word maximum statement that anyone can add to their report. A typical consumer statement would include directives such as: “please do not issue credit in my name without personally verifying and confirming with me by phone at this phone # (949) 555-1212.”Therefore, if I did not apply for credit, the creditor would then not process the application. The downside to this is that it makes the process for you to legitimately obtain credit more burdensome as you will need to take additional steps with the credit bureaus to confirm your identity.
Some key take-home points: These thieves were bold and seemed unafraid of consequences. They will strike hard and fast. As described in my experience, they went so far as to call me and pretend to be a legitimate representative of a major lender. From what Barclays and the other card companies told me, the potential purchases on the fraudulent account reached 5 figures. Fraud alerts and extended fraud alerts will not prevent the opening of accounts. It is the specifically worded consumer statement placed on your credit report that will prevent the opening of fraudulent accounts.
The United States Federal Trade Commission (FTC) estimates that each year, over 9 million Americans become victims of identity theft. At Apriem, we are planning on hosting a seminar to address this growing concern. We will keep you posted once we have an event scheduled.
What Is Identity Theft?
This crime can take many forms. According to the FTC, identity theft occurs “when someone uses your personal identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes.”
Once thieves have obtained enough information, they commit identity theft crime in various ways. They may open a credit card, withdraw money from your savings accounts, apply for a loan, or open communications/utility service such as cable or telephone service using your identity. You may not be aware of the theft for a long period of time, unless you review your credit report or credit card statement that reveals charges that you did not authorize. Perhaps most troubling, you may initially discover you are a victim of identity theft when you are contacted by a collection agency after the thieves have used your information to accrue hundreds, if not thousands of dollars in debt, and of course, have not repaid any of the outstanding debt.
How to Prevent Identity Theft?
One of the three national credit bureaus, Experian, has released a few tips to help protect your personal information.
1) Shred all documents that contain your personal information.
Invest in a cross-cut shredder for your home. Any non-essential paperwork that may contain your personal information should be shredded prior to disposal. For example, if you decide not to accept a pre-approved credit offer, shred it before you throw it away. That goes for any other document imprinted with your Social Security number, date of birth, driver’s license, phone number and any type of financial account or utility account number. Your trash can be a gold mine for thieves, so make sure this critical information is shredded before it leaves your house.
Tip: If you do not want to receive pre-approved credit offers, call 1-888-5-OPT-OUT (1-888-567-8688) to be removed from the lists of major credit bureau lists.
2) Do not give out critical information unless absolutely necessary.
Do not print your Social Security number, phone number, date of birth or credit card account number on your checks, and don’t give this information to a merchant who wants to write it on your check at the time of purchase. Do not be afraid to question whether or not a certain business or provider really needs your Social Security number.
3) Secure your mail.
Stealing mail is another way that identity thieves obtain your personal information. Consider buying a lockable mailbox if your current mailbox is unsecured. If your mail suddenly stops coming, call the post office immediately. Identity thieves have been known to divert a victim’s mail by filing a change of address form.
4) Monitor your credit.
Monitor your credit report on a regular basis. If you find a change of address you did not initiate or accounts you did not apply for, request a copy of your personal credit report. The credit report will include contact information for requesting an investigation of incorrect information. It’s also important to watch your monthly billing statements for errors. To review your credit report for free, you can visit www.annualcreditreport.com. Annual Credit Report.com is the official site dedicated to helping consumers obtain their free credit report. It is a central site that gives consumers the opportunity to request a free credit report from each of the 3 major nationwide credit reporting companies once every 12 months.
What To Do If Affected?
The Orange County Sheriff’s Economic Crimes Department advises the following:
– Contact your creditors to close any fraudulent accounts
– Change account passwords if the crime is internet related
– File a police report with local law enforcement
– Contact all three credit bureaus to place a 90-day fraud alert on your file. This will require creditors to contact you personally before issuing any form of credit.
Equifax: Call 800-270-3435, www.equifax.com, or write P.O. Box 740250, Atlanta, GA 30374
Experian: Call 888-397-3742, www.experian.com, or write P.O. Box 9556, Allen, TX 75013
TransUnion: Call 800-680-7289, www.transunion.com, or write P.O. Box 6790, Fullerton, CA 92634.
On The Horizon
In addition to our own credit history, research has shown that identity thieves are now targeting children. They have discovered ways to obtain social security numbers or personal information of a child. In these cases, thieves have a clean slate from which to work. Since children have a spotless record, parents see no reason to check their children’s credit history. The fraud is typically not discovered until victims graduate from high school and are old enough to apply for credit. By this point, the damage for the victim and the family can be devastating, resulting in lost and damaged credit, the inability to get a loan or land a decent job, even criminal prosecution.
We recommend that you add an additional layer of security to your Charles Schwab accounts. You can add a phone PIN to prevent fraud against your account. This will require an additional layer of authentication when you authorize changes to or a distribution of funds from your account. To do so, please call the Schwab Alliance group at 800-515-2157.
If you suspect identity theft on of your Charles Schwab accounts, please contact your Wealth Manager immediately.
Sources: Federal Trade Commission, Experian, Annual Credit Report.com, Orange County Sheriff’s Department
By LANDON YOSHIDA, CRPC®, Wealth Manager for Apriem Advisors in Irvine, California
Apriem Advisors
