You are most likely aware of identity theft (ID theft) and have heard about identity theft insurance. However, were you aware that in 2010, 11 million Americans were the victims of ID theft? In our technologically advanced society, your identity can be easily stolen.
It can occur when you lose or have your purse or wallet stolen. It can happen when you throw out documents that contain personal identifying information, such date of birth, maiden name, social security numbers, driver’s license numbers, etc. When you no longer need them, shred all of these documents, including credit card solicitations, medical bills, old checks, or bank statements, etc.
When the thieves obtain your actual cards, they make purchases using either your actual credit card or simply your account number and expiration date.
If they don’t have your credit card, they can commit “application fraud”. Here the thief uses your social security number and other identifying information to open new accounts in your name. You won’t know about it because monthly account statements are mailed to an address used by the thief. They’ll keep opening new accounts until they default and appear on your credit report. At which point, you become aware of the theft.
Some ways identity thieves operate are:
- They’ll call your credit card company pretending to be you. They will change the mailing address on your account. They’ll then run up charges on your account, since your bills are being sent to the new address, it takes some time before the problem is noticed.
- They’ll open new credit card accounts, using your name, date of birth and Social Security number. They have obtained the information because they stole your wallet or purse, or your mail, including your bank and credit card statements and offers. Another method is to buy your personal information from “inside” sources, such as a store clerk or from information you share over the Internet. Workers, at restaurants that offer drive-up services can easily obtain your credit card or debit card number.
- Thieves can setup a phone or wireless service in your name and make telephone calls.
- They’ll open a bank account in your name and write bad checks.
- They’ll might even file for bankruptcy under your name to avoid paying debts they’ve incurred under your name, or to avoid eviction.
- They can use counterfeit checks or debit cards, and drain your bank account.
- They’ll even buy cars by taking out auto loans in your name.
Just because you’re you doesn’t mean you’re immune from ID theft. Anyone is a potential victim. In 2000, Tiger Woods testified that someone stole his Social Security number, applied for and received credit cards, and then ran up $17,000 worth of bills on the cards. The thief managed to buy several television sets and stereos before cops put an end to his shopping spree. The only reason he was caught was because he tried to buy a used luxury car. Someone actually thought, “Why would Woods, who earns multimillions from endorsements alone each year, buy a used car?”
Because of the Fair Credit Billing Act, you are personally liable for credit card fraud only up to $50. However, by the time you become aware of theft, you might be past-due on several of the accounts. It will be a time-consuming nightmare to try and straightened everything out. You could spend 10 to 15 weeks trying to clean everything up.
ID theft insurance is relatively inexpensive. AllclearID and Lifelock offer protection. AllclearID costs $14.95 per month and Lifelock has three plans, Standard plan $9.99/mo, Advantage $19.99/mo, and Ultimate $29.99/mo. You can go to their sites to obtain detailed information on their service.
To provide additional protection for yourself, make sure you obtain your credit report at least once a year. By law, you may obtain a free copy of your credit report annually. Go to https://www.annualcreditreport.com/index.action to order your report.
If you’re a victim of identity theft, you should immediately contact the fraud department of each of the three major credit bureaus
Don’t fall for a company that only offers credit report monitoring. You can do that yourself. They won’t help you if you become an ID theft victim. All they do is monitor your report.
You want a service with coverage that actually provides restoration services if your identity gets stolen. Their experts will spend the time it takes to clean up the mess so you won’t have to waste your time. You are paying them to take away the risk of cleaning up the chaos created by the thief. Their experts are there to deal with the banks and creditors who will come after you to collect bad debts that the thief has incurred and which you do not owe. Their employees are the experts. They know who to call and what to do a whole lot more than you. Get the insurance. Remember you are protecting yourself and your family. You are securing their future.