What it is: Identity theft occurs when someone - Russian hackers, for instance - wrongfully obtains and uses someone's personal data and private identifying information, usually for economic gain. Have you received a bill that's not yours? Are you receiving calls from creditors? Are there small charges on your credit cards you don't recognize? These are warning signs, and you could be a victim of identity theft.
How it works: Using personal information such as Social Security number, bank account numbers, and calling numbers, a criminal can take over that individual's identity to conduct a wide range of crimes. Some examples include: false applications for loans and credit cards, fraudulent withdrawals from bank accounts and fraudulent use of telephone calling cards.
Why it matters: First, take steps to minimize your risk. Guard your Social Security number closely, and check your credit report for accuracy. If you think you have been victimized, take action and place a fraud alert on your credit report and close any accounts you don't recognize or that have been tampered with. A fraud alert is free and starts with a request to one of the three reporting agencies, Equifax, Transunion, and Experian, to put a fraud alert on your credit report. Once one of the agencies receives a request, they must tell the other two companies. The alert lasts 90 days, but you can renew it. Be aware of commercial credit monitoring services that charge fees to watch your credit reports and alert you to changes to the accounts listed on your credit report. Services usually alert you of changes to your accounts by email, text message or phone but could cost $15 a month or more.
A security freeze is free to identity theft victims who have a police report of identity theft. If you are not an identity theft victim, it will cost you $10 to place a freeze with each credit reporting agency. That's a total of $30 to freeze your credit information at each of the three major credit reporting agencies mentioned above. (Source: Iowa Attorney General)
Who should care: According to the U.S. Department of Justice's Bureau of Justice Statistics (BJS), "An estimated 16.6 million people, representing 7 percent of all persons age 16 or older in the United States, experienced at least one incident of identity theft in 2012. Financial losses due to personal identity theft totaled $24.7 billion, over $10 billion more than the losses attributed to all other property crimes measured in the National Crime Victimization Survey. About 14 percent of victims suffered an out-of-pocket financial loss due to the most recent incident of identity theft."
More information: For more information, visit the Consumer Financial Protection Bureau at tinyurl.com/q3mmj2w; or the Federal Trade Commission at www.identitytheft.gov, where the FTC has launched a one-stop resource for identity theft victims. The site provides streamlined checklists and sample letters to guide you through the recovery process; the Justice Department's Bureau of Justice Statistics at tinyurl.com/mdncmmw; the Iowa Attorney General at tinyurl.com/qal4acb; or Iowa State University Extension and Outreach at www.extension.iastate.edu/humansciences.
Ea$y Money? is a weekly guide to financial topics of importance for individuals and families at all stages of life. Mary M. Weinand is interim regional director and family resource management field specialist for Iowa State University Extension based in Henry County.