Has Your Identity Has Been Stolen

Identity Theft

Learn how you can know that you are safe from identity theft.

With data breaches at large retailers and the Equifax credit rating company, it’s easy to feel jittery about how secure your personal finances may be. The highly publicized instances gave hackers access to the personal data of millions of Americans. So how do you know if your information is being used without your knowledge?

Unfortunately, it may be years before it is apparent that your ID is compromised. And the longer it goes unnoticed, the longer the crooks have to misuse your name, Social Security Number and other personal information for their own purposes.

Look for these signs:

If you get strange bills or statements that you can’t immediately identify, it may be the first signs of identity theft. Always open your mail even if it looks unimportant. An unfamiliar service provider or credit account may be your first clue. What you first think is junk mail may be a bill for services or goods you have no knowledge of.

On the other hand, be aware if there are irregularities in the bills you ordinarily receive. It may be that a criminal has changed the address on the account to help him or her to establish other accounts. If your expected regular mail stops, it is a sign that a change of address request has been filed to facilitate the crook’s use of your identity.

Odd charges on credit card or banking accounts are a signal that your information is being used by someone else. Credit card companies try to alert customers to unusual activity, but they can’t catch all of it. The fraud may start out small as the thief tests to see if the card is active. Some of the scammers keep their charges small to prolong the time before they are discovered and steps taken to halt them.

If you are denied money by an ATM, turned down for a loan or advised that your health insurance is being denied because you are over the annual limit, take immediate steps. Even if you think you are talking with someone who has a legitimate concern in your financial matters, never share a PIN by phone. Caller ID numbers can be spoofed.

If creditors and collection agencies start calling about late or missed payments, don’t shrug the calls off as errors. Get on the chase at once.

If you were expecting a tax refund or if the IRS notifies you that you filed two tax returns, that is a red flag. The Department of Justice knows that thieves have stolen billions of dollars from the U.S. Treasury by filing bogus tax returns using stolen identities. Verify that a caller asking questions about your taxes is a bona fide representative of the IRS before divulging any information.
You can get a free copy of your credit report if you are suspicious of activities surrounding your finances. If the report shows accounts with which you are not familiar, it’s time to start down the long and winding road to resolution of the theft of your identity. You should routinely check your credit report even if you have no reason to think your information is being used by someone else.

Equifax Fallout Begins

Equifax

Equifax reported that 143 million Americans had their information, including Social Security numbers and other personal data, exposed in the hack.

People who froze their credit to minimize financial damage in the wake of the hack of credit reporter Equifax are now realizing what that means.

The problem is massive. Equifax reported that 143 million Americans had their information, including Social Security numbers and other personal data, exposed in the hack. The company’s CEO resigned in the wake of the credit disaster and Congress is discussing how another such disaster might be avoided.

The aftermath is becoming apparent as people who reacted by freezing their credit try to buy things such as the new iPhone that is in high demand or other big-ticket items.

It is possible to unfreeze your credit if you are anticipating a large purchase and then freezing it again afterward. But that may take time and your credit is vulnerable during the interim.

Experts advise that you let the major credit bureau know several hours or at most several days before you apply for financing. The three bureaus are TransUnion, Experian and Equifax. You will likely be charged $3 to $10 for each action at each of the three bureaus.

Sellers, such as Apple and other wireless carriers, often asked for a credit report before they approve the sale of a new phone. The costs and the hassle of unfreezing and refreezing your credit information may make the acquisition of a new super-phone – or any other costly item – more trouble than it is worth to the consumer.

Citizens Financial Group of Providence, R.I., which runs the Apple financing program, has already announced that it will not new or existing customers who have frozen their credit, at least temporarily. Sprint, Verizon, 4:58 PM-Mobile and AT&T also run credit checks with the three credit agencies. Their policies vary, but it is one of the indications that the Equifax hack will affect the buying practices of many Americans.

Building A Good Credit Score

Use card responsibly and pay each month's bill on time.

Use card responsibly and pay each month’s bill on time.

Building a good credit score doesn’t happen overnight. There are steps you can take to assure good credit from the outset and establish yourself on a positive note. They include:

Credit Reports

Check to see if you have a credit report. You could have established credit without being aware of it. For instance, if you have been authorized to use a family member’s credit, you might have a credit report. It is also possible that you have been a victim of identity theft, and that definitely needs to be cleared up before you start building credit in earnest. WalletHub is one site that offers credit reports and scores that are updated daily. If you find a report under your Social Security number, analyze it and if necessary, dispute errors, fraudulent accounts and negative records related to unauthorized use.

Get A Credit Card

Starting with a clean slate, open a starting credit card. It is usually pretty easy. There are some that don’t charge an annual fee or require you to incur debt as loans do. They report to the major credit bureaus on a monthly basis.

Three options for a starter card include student credit cards, general use cards for people with limited credit and secured credit cards. You have to have an active college or university email address to get a student credit card. A secured card offers the best opportunity to get guaranteed approval without the risk of overspending. The alternative to a starter card is a loan, usually for home, car, student use or other need that requires debt with interest.

Use Your Credit Card For 6 Months

Use the card responsibly for at least six months. That will generate a credit report and score. The score could range from bad to well above average, depending on what you did with the card and how well you paid. This first report is critical, because it puts you under the credit score microscope. Mistakes will be magnified beyond what they would be if you were a seasoned credit user.

Pay Bills On Time

Pay each month’s bill on time and keep your utilization of the card below 30 percent – 10 percent for the best result. Never use all the credit they extend to you. Setting up automatic payments from a deposit account is helpful in meeting these standards. Responsible handling of the initial card will help when you are ready to apply for a higher credit limit.

Study Your Credit Report

When you have a sense of how your initial foray into credit card use went, continue to study your credit report regularly. By looking at all of the components of the report, you can gain a sense of how the system works and be prepared for long-term credit use. You can learn to adjust course if any element of your report seems out of sync.

A responsible journey into the world of credit can set you up for life in what is an important element in ongoing personal finance.

The Credit Elite Have Savvy Habits

Payment history most important factor used to determine overall score.

Payment history most important factor used to determine overall score.

Ever yearned to be part of the “Credit Elite,” those whose credit ratings are up the 800-850 range as determined by the rating agencies? That kind of credit almost assures that you will be approved for loans and likely enjoy lower interest rates.

Those in the 800-plus range know that it doesn’t happen by chance. They make particular credit habits part of their regular personal finance strategies. Here are some of their suggestions:

Pay On Time

Without exception, pay on time. The payment history is the single most important factor that the agencies use to determine your overall score, being some 35 percent of the total. If you miss a payment or make one late, it has a negative effect.

Keep Balances Low Or Paid Off

Keep a rein on credit card balances. The size of the balance relative to the card limit is a factor. The best credit is generated by using less than 10 percent of the allowable limit.

Low Number of Credit Cards

Limit your credit accounts. Applying often for new credit can affect your bottom line. That activity represents 10 percent of the credit agency’s total. If you make frequent inquiries about new cards, for instance, trying to find the best mix of perks, it could have a negative effect. Try to get the right mix into place, then stand pat. A mix of debt, including credit cards, auto loans, mortgages, student loans, etc., all deftly managed, will impress the rating companies.

Don’t Spend More Than You Make

Live within your means. Overextending yourself financially will come home to roost. Don’t use credit to overspend. A solid, long-term credit history will keep your score in the range you want. The older your accounts become without serious lapses, the more they count. Stability is a factor when you’re looking at the 800 rankings.

Staying on course is important. Consistency is key to a good credit score. A small lapse can have a reverse effect. Make good credit a habit and stay on course. Check your credit score periodically and monitor your progress toward the elite standing.

Be Wary of Fake Debt Scams

Be wary of bill collectors claiming you owe them money.

Be wary of bill collectors claiming you owe them money.

When a thief gets your credit card info and runs up a huge debt, who is responsible for paying? Some scammers are making an art out of trying to get the money from the card holder and there are steps you can take to protect yourself. The elderly are particularly vulnerable since they tend to be less savvy about electronic finance issues.

One unfortunate retirement-age woman found herself being dunned for $8,500 after someone named “David” used her credit information illegally. She received more than 60 calls over a three-week period, often late at night, as she was hassled to pay the debt. The harassment didn’t end until she hired a lawyer.

The Consumer Financial Protection Bureau (CFPB) reports that 8,700 similar complaints were filed with the agency over a 15-month period, half from elderly persons who reported unrelenting attempts to collect money they didn’t owe.

In the period from July 2013 to December 2014, the agency received overall 110,000 complaints regarding debt collection. The Federal Trade Commission lists such complaints as its most consistent industry problem.

The debt collectors report they are trying to collect some $756 billion in debt. It isn’t possible to estimate how much of that staggering total involves “false debt” claims. But based on complaints by those 62 and older, there are several identifiable tactics that collectors use to weasel money not owed from the elderly, according to an AARP magazine article. They include:

Common debt collector scams:

Threats to garnish Social Security or veterans’ benefits if the person doesn’t pay the claimed “debt.” CFPB experts say this is not possible. Garnishees from these government sources are only possible for delinquent state or federal debt such as unpaid taxes, student loans or government-backed mortgages. Alimony or child support payments also can be withheld from Social Security payments, but Supplemental Security Income benefits cannot be garnished due to any debt.

Pressure to pay medical bills that supposedly were generated by a late spouse. Widows are the frequent victims of this particular scam, which are purposely imposed on them when they are emotionally frail, just learning to cope with their loss. Or the scammers may make repeated attempts to collect debts that they falsely allege were owed by deceased family members.

Frequently repeated calls, offensive language and threats of public shame are among the scammers’ arsenal to intimidate so-called debtors into paying. The experts stress that persons being subjected to these annoying tactics should not respond under pressure simply to be rid of the annoyance. Verify the debt before even considering payment. Be aware that collectors cannot collect on debt that has expired under statute of limitations provisions. The period ranges from two to 10 years, depending on state laws.

There are instances of mistaken identity in which legitimate collectors simply have their information wrong. In some instances, they are able to collect from the wrong party because those being dunned are reluctant to provide identifying information over the phone for fear of identity theft. But if you think you may have wrongfully paid a debt under such circumstances, contact the CFPB and your state’s attorney general to report your concerns.

To protect yourself against fake collectors, follow these steps:

Ask for specific information about the alleged debt. If the collector fails to respond, you can assume it is a scam. Visit go.usa.gov/Fsge for information about bogus collectors.

Keep close tabs on your credit transactions. You are entitled to three annual free reports from the three major credit reporting firms. Visit AnnualCreditReport.com for information on obtaining these reports. Look for unrecognized debt in your name and report discrepancies immediately.

Visit go.usa.gov/FsY3 to get information about alleged debt. Dispute claims that are not correct. You can obtain sample letters from that address that you can use as patterns to report your disputes. Send the information by certified mail and with a “return receipt” to the collector and to the creditor. Copy to the CFPB, the Federal Trade Commission and your state attorney general.

If you are being dunned for alleged credit card debt, insist on written proof, such as statements detailing unpaid charges. If the collector claims medical debt, ask for documents detailing services, dates and names of providers. Cross-check with Medicare and private insurers.