Dealing with stolen identity
Identity fraud can destroy your credit, as well as your peace of mind
NEW YORK (CNNfn) - Linda Foley didn't bat an eye when her new boss at a small San Diego-based publisher asked for her Social Security number and a copy of her driver's license.
She had been friendly with her prospective supervisor for several months and the required information seemed standard by any legal measure.
Five months later, she was stunned to find the employer had been issued two credit cards, applied for several others and racked up $400 in charges on a cell phone -- all under Foley's name. The credit card bills amounted to $1500 and included restaurant visits, video rentals and consultations with a personal chef.
"I wish I could live as well as she was living on my money," says Foley, who claims the experience left her credit -- as well as her peace of mind -- in ruins. "It has shaken me to the core. If I can't trust someone I knew, how can I trust anyone else?"
Foley's story is just one of a growing number involving identity theft. Trans Union Corp., one of the big three credit reporting agencies, estimates consumer inquiries related to identity fraud jumped 16-fold between 1992 and 1997.
While those figures are partly a result of improved customer outreach, law enforcement professionals generally agree that identity fraud is on the rise in the United States.
Making the hoist
There was not much Linda Foley could have done to protect herself from fraud, since her employer was legally required to gather her personal information for tax purposes.
But the vast majority of identity theft cases involve circumstances that are not necessarily beyond the average consumer's control.
Many swindlers still steal identities the old-fashioned way -- by lifting wallets and purses, though the crime has evolved in recent years.
Personal data is sometimes obtained fraudulently from credit reporting agencies when an impostor poses as an employee, loan officer or landlord.
"Shoulder surfing" is another common method, with criminals peeking over consumers' backs at ATM machines and phone booths to get personal identification numbers.
Stolen mail, both from postboxes and dumpsters, is also a common starting point for many would-be impostors. Newly-issued credit cards, bank and credit card statements, pre-approved credit offers and tax information often contain enough personal data to form a false identity.
Because many businesses, banks, mortgage companies, and restaurants do not shred these documents before throwing them out, they provide ample opportunity for identity theft.
Finally, workplace insiders with access to personnel files may use that information for their own gain or sell it to a crime ring. Staff members at lending institutions or real estate companies also sometimes misuse information they obtain from credit reporting agencies' databases in their offices.
Keeping thieves at bay
Most people don't find out they have been a victim of a stolen identity until they are turned down for a loan or credit card. A copy of their credit report explaining the denial may unveil weeks or months of fraud.
Because credit reports can reveal inaccuracies or fraudulent use of your accounts, ordering a copy at least once a year from each of the three major credit bureaus, Equifax, Experian and Trans Union, may be a good idea.
"Early detection is the best way to minimize the pain you will go through if you are a victim of this crime," said Beth Givens, director of the Privacy Rights Clearinghouse.
In addition, reducing access to any personal data is a smart preventative measure.
Don't carry extra credit cards, your Social Security card, birth certificate or passport in your wallet or purse unless absolutely necessary. Also have your name and address removed from the phone book and install a locked mailbox to minimize the chances of mail theft.
Ask credit reporting bureaus to take your name off their marketing lists. That should reduce the number of pre-approved offers of credit you receive in the mail.
And never throw credit card receipts into public trash containers.
--Don't leave sensitive outgoing mail in the mailbox for the carrier to pick up, since impostors may alter and cash checks. And don't have new checks sent to your home's mailbox.
--Never give out credit card numbers over the phone unless you have a trusted business relationship with the company and you have initiated the call.
--Create passwords and PINs that are not easily detected, such as the last four digits of your social security number, your birth date or mother's maiden name. Also shield your hand when using a bank ATM or making long distance calls with a card, in case a prospective impostor is looking on.
You may also want to consider buying a paper shredder to destroy any papers with personal information before they go out to the trash.
To facilitate the healing process if your information is stolen, keep a list or photocopy of all your credit cards, account numbers, expiration dates and telephone numbers of the customer service departments of your credit card companies and financial institutions in a secure place.
When it happens to you
If your identity is stolen, you will have to act quickly and assertively to minimize the damage and halt the thief's continued use of your identity.
Immediately contact the fraud departments of the big three credit reporting companies and inform them of the theft, so they can "flag" your accounts. A short victim statement explaining what happened and how you can be reached to verify future applications may also be helpful.
Report the crime to the police as soon as possible and get a copy of the police report. Many credit card companies and financial institutions will require the document to verify the crime.
Get new account numbers, passwords and replacement cards for all savings and checking accounts, credit cards, ATM and debit cards. Ask that old accounts be processed as "account closed at consumer's request" instead of "card lost or stolen," which might be interpreted negatively by credit bureaus in the future.
If checks have been stolen, file a report with Telecheck, the National Processing Company or Equifax.
When dealing with the authorities and financial institutions, be thorough. Consumer groups recommend keeping a log of all conversations, including dates, names and phone numbers, related to the crime, as well as time spent and expenses incurred. Confirm all phone conversations in writing and send correspondence by certified mail. Keep copies of all letters and documents.
Picking up the pieces
Federal law does not hold victims of credit and banking fraud accountable for charges brought on by criminals, but that is often little consolation to those who have had their identities stolen.
"They are usually off the hook financially," said Givens. "But what they are going to have to endure is far worse than having to pay the impostor's bills."
That may include a ruined credit report, harassment from collection agencies and hours of lost productivity, as victims are forced to contact credit card companies, banks and credit bureaus in an attempt to get their financial records back on track.
"It can take anywhere from six months to several years to regain financial health," Givens said. In the meantime, these people may have difficulties writing checks, obtaining loans, renting apartments or even landing new jobs, never mind the emotional damage.
For Linda Foley, an exceedingly healthy dose of skepticism now accompanies all of her personal and financial transactions.
She shreds documents containing personal data, is uncomfortable using credit cards or checks, and refuses to provide her social security number on preliminary job applications and insurance forms. She also has her credit checked regularly by a monitoring service.
Although Foley's impostor was caught, she served no jail time and -- like many victims -- Foley lives with "a continual feeling of paranoia" that she will lose her identity once again.
"If someone had stolen my purse or shot me, at least it would be over and done with," she said. "This is a violation that never goes away."
-- by staff writer Nicole Jacoby