Financial Education

Protect yourself against identity theft

Identity theft is America's fastest growing crime. According to studies by Gartner Research and Harris Interactive, approximately 7 million Americans found themselves victims from July 2002 to July 2003. And as more information about you circulates on the Internet, the more likely you are to fall prey to those who will use your information to ruin your credit.

Some statistics on identity theft show how devastating this crime can be:

  • The incidence of victimization increased 11-20% between 2001-2002, and 80% between 2002 -2003 (Harris Interactive)

  • An Identity Theft Resource Center (ITRC) study shows that victims now spend an average of 600 hours recovering from this crime, often over a period of years. Based on 600 hours times the indicated victim wages, this equals nearly $16,000 in lost potential or realized income.

  • The same study shows that the business community loses between $40,000 - $92,000 per name in fraudulent charges.

  • Victims spend an average of $1,400 in out-of-pocket expenses trying to solve the problem.

  • 98 million American adults have no idea what to do if identity theft strikes them - and no way of knowing when it's over.

These statistics show that identity theft not only ruins a person's credit rating, it also costs millions of dollars in lost wages, legal fees and other associated costs. For service members, it can lead to denial of security clearances and even a decline in operation readiness - the men and women in the Armed Forces should be focusing on the job at hand, rather than on financial worries.

There are some important things you can do, however, to protect yourself.

Avoid giving out your Social Security number.
Once used as a quick and easy way to assign unique identification numbers for health care, business transactions and even driver's licenses, Social Security numbers are the main weapon in the identity thieves arsenal. All a person needs in addition to this is a birth date, address and phone number, and they can ring up an enormous amount of debt in a short time.

There will be some legitimate needs for you to share this information, but only do it if you are sure the company is reputable, and only if you initiated the contact. For items such as driver's licenses or health care, ask if they can use another number instead.

Order a credit report at least once a year.
Knowing what is on your credit report can help you catch a problem early and stop the crime from spiraling out of control. The earlier you catch the problem, the easier it'll to correct it. Visit www.annualcreditreport.com to get your free copy.

Have your credit report reviewed by a Certified Credit Report Reviewer (CCRR).
In 2003, the new Fair and Accurate Credit Transactions Act (FACTA) was written to offer new protections against identity theft. A CCRR has passed a test on the new law and can guide you in clearing up inaccurate information. They can also give you helpful tips on how to protect yourself in the future.

Cancel unused accounts.
Cutting up a credit card or not using a bank account is not enough; you need to call the card issuer or financial institution and completely close the account. If an identity thief finds these accounts, half of their work has already been done. Also, be sure to ask for verification of closure in writing so you have documented proof.

If you are careful about sharing your personal information, take the time to review your credit report, and document your credit transactions thoroughly, you should be able to limit your risk. If you do find yourself a victim (or have already been one) then contact your nearest CCRR. They can tell you how to resolve the problem and how to restore your credit, thus giving you the peace of mind you need to perform your duties.

The statistics for the article come from www.identitytheft911.com and www.idtheftcenter.org.

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