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How to spot identity theft

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How to spot identity theft
The threat of becoming a victim of identity theft has never been greater. Data breaches are becoming more commonplace, and data thieves have an increasing amount of tools at their fingertips. So, spotting warning signs that you could be a victim is vital to avoiding having an already bad situation turn into something far worse.
"There are somewhere around a billion records that were compromised over the past decade," said Robert Siciliano, a security expert for the computer security firm McAfee Inc. "That's every American's information breached an average of three times."
About 10 million consumers fall victim to identity theft each year. Data breaches are but one way your personal information can get into the hands of those who want to take advantage of your credit score and history so they can open lines of credit and run up bills they'll never pay for. The results of their crimes will end up on your credit report.

How to spot the signs

Getting your free credit report -- available once a year for each of the three major credit reporting agencies through AnnualCreditReport.com -- is one way to spot a problem. But time is of the essence. The longer thieves pretend to be you, the more there is to unravel. Unless your timing is spot-on, using the credit report as the sole tool for spotting identity theft could allow the crime to go undetected for months.Identity theft experts say you should be alert for warning signs that could help tip you off that an identity thief has latched onto you. It's about making observations and adding them together. So, paying attention to your mail, your financial accounts and changes to the norm are key.

What are some of the red flags? Certain bills stop coming. You start to see charges for things you never purchased, or you get a bill for an account you never opened. You might even notice charges for medical services you didn't receive from providers you've never seen. It is possible that each could be an innocent mistake. But you need to check as soon as you notice one of these blips. Seeing a combination of those things, though, is a sure-fire warning that thieves not only have you in their sights, but that they've already attacked. Another big red flag, a sign that thieves have your credit card number, is a small charge to your credit card from a company you're not familiar with. That's a thief's way of testing that a stolen credit card number works.

In addition to what might (or might not) show up in your mail or in your accounts, Siciliano said you could stumble upon finding out you have been victimized by getting rejected for anything from a loan to a new mobile phone to even a job or an apartment. Why? Because your credit has already taken a hit thanks to the thieves. There have been plenty of examples, he said, of consumers receiving notices from the Internal Revenue Service that their taxes already have been filed (the thieves applied for a refund in your name but was sent to them) or even getting arrested because of crimes committed in your name.
Using one of the identity theft protection services can help spot potential warning signs, too, according to Siciliano. The services, which typically charge a monthly fee, are often available for free to customers of companies that suffered a data breach, but usually only for one year. Subscribing to such a service, however, is not a replacement for vigilance, the experts warned. It is simply another tool you can use to protect yourself. No one is immune.
"Identity theft can affect consumers from all walks of life," said John Breyault, vice president of telecommunications and fraud policy for the National Consumers League. "Identity thieves can quickly ruin your credit, interfere with insurance claims, and cause problems for you with the IRS, just to name a few headaches."
A bad credit report, by hurting your credit score, is going to prevent you from getting the best credit cards and the lowest mortgage rates. And it takes time to clear away the damage and have your true credit score, based only on your spending and payment history, restored.
Because so much is at stake, acting quickly on the warning signs is vital, says Paul Stephens, director of policy and advocacy at the California-based Privacy Rights Clearinghouse, an educational and consumer advocacy group.
"It's important to heed the warning signs of identity theft in order to begin the process of resolving any identity theft as soon as possible," he said. "This will help to minimize the damage."
Addressing it quickly means immediately contacting your credit card companies and the three major credit reporting agencies. You should also file a report with your local police department. You'll have to work to get each fraudulent mark on your credit off your report.
Additional information about spotting identity theft and undoing the damage is available from the Federal Trade Commission.
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