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Consumers should protect themselves over holidays

Consumers should protect themselves over holidays

Posted: Wednesday, November 26, 2008 9:03 pm

  Holiday shoppers can reduce the chance of becoming an identity (ID) theft victim this year by taking some simple preventative measures, according to the Insurance Information Institute (I.I.I.).

“The hustle and bustle of the holidays creates the perfect opportunity for thieves bent on stealing your credit cards or other financial information,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “Shoppers are tired, stores are crowded and it’s easy to become less guarded about personal information such as personal checks, drivers licenses, social security numbers and credit cards.”

Thieves take information from identifying documents and use them to impersonate a victim, steal from bank accounts, establish phony insurance policies or open unauthorized credit card accounts.

Use of stolen non-credit card numbers is the most common form of identity theft, the federal government has found. The Federal Trade Commission (FTC) reported that 3.7 percent of all American adults became victims of ID theft in 2005. That percentage translated into 8.3 million adults, with 3.3 million of them experiencing misuse of non-credit card information, followed closely by those who had their existing credit card accounts used improperly (3.2 million) and the balance (1.8 million) finding that new accounts were opened or other frauds committed through the use of their wrongly obtained personal identifying information.

Some ID theft schemes, rather than relying on the theft of identifying data or a credit card, employ electronic means, including online scams like “phishing” — when thieves use e-mail inquiries purporting to be from financial or other online organizations to obtain sensitive account information. Others employ more old-fashioned methods, such as “dumpster diving” — rooting around in people’s garbage to collect financial information. Moreover, the advent of “no-swipe” credit cards, which transmit account and user information through a radio frequency, also makes it possible for identity thieves to use an electronic device to capture the information.

ID theft victims are often left with lower credit scores and spend months getting their credit records corrected. They frequently have difficulty getting credit, obtaining loans and, in some cases, finding employment.

“Consumers should carefully monitor their bank balances and credit card bills to make sure that they actually made all of the transactions attributed to them,” said Salvatore. In fact, more than half of all ID theft victims discovered that their identity was stolen by monitoring their bank and credit card accounts, the FTC said.

To protect your identity this holiday season, the I.I.I. has the following tips:

• Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card or passport unless absolutely necessary.

• Guard your credit card when making purchases. Shield your hand when using ATM machines or making long distance phone calls with phone cards.

• Always take credit card or ATM receipts. Do not throw receipts into public trash containers, leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.

• Proceed with caution when shopping online. Make sure that you are buying from a reputable retailer with a secure network.

• Monitor your accounts. Do not rely on your credit card company or bank to alert you of suspicious activity. Carefully monitor your bank and credit card statements to make sure all transactions are accurate. If you suspect a problem, contact your credit card company or bank immediately.

• Order a copy of your credit report from each of the three major credit bureaus. A law that took effect in 2004 entitles you to one free credit report per year. Make sure it is accurate and includes only those activities you have authorized. The three major credit bureaus are Equifax, TransUnion and Experian.

• Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, any part of your social security number or phone number, or any series of consecutive numbers.

• Do not give out personal information. Whether on the phone, through the mail or over the Internet, do not give out personal information unless you’ve initiated the contact or you are sure you know who you’re dealing with and that they have a secure line.

• Shred, shred, shred. Tear or shred any documents that contain personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

In order to make it more difficult for identity thieves to open accounts in your name, you can also contact the fraud department of any one of the three credit reporting agencies to place a fraud alert on your credit report — by law, the agency you contact is required to contact the other two agencies. The fraud alert tells creditors to contact you before opening any new accounts or making any changes to your existing accounts.

Some insurance companies include identity theft coverage as part of their homeowners policy, selling it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy. This coverage provides the customer with reimbursement for the expenses associated with the identity and credit restoration process including phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer). They may also include the added services of a fraud specialist to assist and guide victims through the process of restoring and protecting their identity. Contact your insurance agent or company representative to find out what kind of coverage is available.

If you have any questions regarding insurance, contact your insurance company or representative. For more information about identity theft and insurance, go to the I.I.I. Web site. In addition, the National Insurance Crime Bureau (NICB) is dedicated to combating insurance fraud and theft, including identity theft. If you suspect fraud or theft, you can call NICB’s toll-free hotline to provide an anonymous tip that could make you eligible for a reward. The number is 1.800.TEL.NICB (1.800.835.6422).

For more information about avoiding and dealing with identity theft, consumers can also go to the FTC Identity Theft Web site.
Published in The Messenger 11.26.08

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