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Identity Theft

September 19th, 2009    Subscribe To Our Feed

It was a bright, sunny day when Shelly decided she should check her credit report. It had been over a year, maybe even two, since she last checked. Her application for a new loan had been turned down recently and she was curious why.

After all, Shelly had a great credit record, a top-tier credit score, and she worked hard to maintain it. She made a habit of meeting her financial obligations plus she kept organized records. She never had a problem applying for credit or borrowing money before.

But when Shelly saw a frantic flurry of strange accounts and new purchases, she nearly fell to her knees. She had no idea what they were or where they came from. As it turned out, Shelly’s identity had been stolen a full ten months ago and she had no idea.

The scary truth is, most people don’t actively think about having their identity stolen. It’s only after catastrophe strikes that this debilitating scam makes itself known.

Consider some stats on identity theft from 2007 –

• There were 8.4 million victims amounting to a vulnerable victim every 4 seconds.

• Total identity fraud was $49.3 billion. That’s $160 for every United States citizen.

• The average take per victim was $5,720.

And with the ever increasing storage and transfer of electronic records, the threat is as great as ever. No doubt that’s what 145,000 customers of one data broker were made painfully aware of when it was revealed that a crime ring had obtained their sensitive information - Social Security numbers and credit reports.

Meanwhile, old-fashioned methods like stolen wallets, purses, and snail mail remain the most common ways thieves gain access to your information.

Why Bad People Love Identity Theft?

Identity theft is an instance of fraud or false pretense where someone has obtained your personal data, and then uses it to portray themselves as you, harming you in the process, usually in a financial sense, but sometimes through misidentification or property damage.

The irony is that the longer and better your credit rating and history, the more likely you’ll be a target and have your credit damaged. So, with very little effort, the criminal not only benefits from your years of hard work and financial discipline, they also jeopardize your financial future.

When ID theft occurs, it’s not unlike a burglar breaking into your home, rifling through your personal items. But a thief would much rather fill out a few forms to claim your ID than have to haul your 36” TV out the back door. It’s easy to see the criminal motivation to steal your personal data, instead.

To make matters worse, you are essentially considered guilty until you take a lot of action to prove yourself innocent. You’ll suffer the indignity of explaining your newly damaged credit to skeptical lenders for weeks or months until you get the crisis entirely solved and settled.

Creative Criminals Know No Bounds

So what are some schemes that an enterprising criminal might use when leveraging your good credit standing for ill-gotten gain and pleasure?

Normally, the perpetrator will open a new credit card in your name and max out the purchasing power and cash advance limit as soon as possible.

The thief may put it to more leisurely use by charging to a PO Box so you never see the bill. You’ll only be alerted by the sudden influx of harassing phone calls from a collection agency. Or you’ll find your interest rates suddenly surging because of the undetected red flags now polluting your credit report.

And it’s not always the usual buying binge and shopping spree. The thief might also commit all manner of crimes and then use your identification as their alias when they’re busted. They might even go so far as to rent a home in your name or rent a fancy car, never intending to return it.

If The Worse Has Come True, Here’s What You Do

If you’re like Shelly, having almost buckled at the knees, but now recovered and ready to put a halt to your evil twin’s good times, here’s some things you need to do immediately.

Contact the Fraud Victim Assistance Dept at any one of the major three credit bureaus and have a Fraud Alert placed on your credit reports.

Once you call, they must contact the other two, but is worthwhile to do it yourself and be certain. This will instruct all three creditors to take additional security steps to verify your identity before granting further credit, thus preventing more accounts from being opened.

When opening your fraud alert, you’ll have a choice of 90 days or 7 years. Keep in mind that 90 days may not be long enough to thwart a patient thief, and you can always have the alert removed before t he seven years has fully elapsed. Next, contact the local police and file a police report. You will need this police report should you choose the seven year Fraud Alert option. Make sure to obtain a copy for your records.

If your Social Security number has been compromised, be certain to contact the Social Security administration pronto. This particular piece of data is a key to the magic kingdom in terms of identity theft.

You’ll also be entitled to a free credit report which you should then review in detail to identify all questionable transactions. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.

Check that information, like your Social Security number, addresses, names, and employers are correct. Close the accounts that have been fraudulently tampered or opened and get written confirmation that accounts have been closed. For existing accounts, contact the billing department and tell them you need to generate a fraud dispute form. They should guide you from there.

With falsely fabricated accounts, file a dispute with the creditor or file a report with the police and provide an “Identity Theft Report,” to the company. If you are unable to file a police report, ask if the creditor accepts the Federal Trade Commission’s “ID Theft Affidavit”. Filing a report with the police and then providing creditors with an Identity Theft Report will provide you more comprehensive protection as it will require that they stop reporting the fraudulent information.

As you resolve your identity theft disputes, be certain to ask for letters stating that the disputed accounts have been closed and fraudulent debts discharged. These letters serve as backup evidence if in the future issues relating to this account reappear on your credit report or you are contacted again about the bogus charges.

Beyond that, you can apply a credit freeze. This allows you to block all access to your credit report and score preventing identity thieves from opening new accounts in your name.

However, because a credit freeze also prevents legitimate lenders from reviewing your credit report without your consent, it may provide more protection than you need. It’s most effective when you’re dealing with an aggressive individual, like an angry ex-spouse, who is trying to ruin your credit.

Start monitoring your credit report. All three credit bureaus offer credit-monitoring services. They’ll notify you when there has been a change in your credit file, such as a new account or credit inquiry.

File a complaint with the Federal Trade Commission online or by phone using the their Identity Theft Hotline. And be sure to use it if more trouble happens and you need to update your complaint due to additional information or problems.

Also, providing a printed copy of your complaint form for the police report will constitute an Identity Theft Report and entitle you to further protections. This protective umbrella can be used to permanently block fraudulent information from appearing on your credit report, ensure that debts do not reappear on your credit report, prevent a company from continuing to collect debts that result from identity theft and place an extended fraud alert on your credit report.

As you recover and begin to open new accounts, create personal identification numbers and passwords that are non-obvious or even just nonsense. It will prevent the thief from guessing standards like your mother’s maiden name or your birth city.

As you can see, there are procedures and tools in place to help you combat clever criminals from accessing your personal data and disrupting your financial and personal life.

You’re entitled to one free credit report per year, so go ahead and do what Shelly didn’t - until it was too late.

South African Financial Blacklist - What You Should Know

July 8th, 2009    Subscribe To Our Feed

If you live in South Africa, understanding what being blacklisted means to your financial standing is crucial. The following information serves to give you some information and help bring understanding, along with actions to enable you to be on top of your financial circumstances.

What Is A Blacklist?

A blacklist is a register of persons who have been ‘red-flagged’ as a credit liability and are therefore denied access to loaning money through banks and other financial institutions. In South Africa you may be credit blacklisted because of your failure to settle your debt. However, being blacklisted is not something one should be ashamed of. Many professionals find themselves on a credit blacklist. Teachers, credit controllers, and admin people are just some of the professionals that find themselves in this situation. Statistics indicate that one in four people in South Africa are credit blacklisted. This suggests that there are about five million people whose names currently appear on a credit blacklist in South Africa.

Causes Of Landing On The Blacklist

Many people don’t realize that they are experiencing debt/credit difficulty until it’s too late and they find out that they are blacklisted. Owing money can lead to being blacklisted by authorized lending institutions thus making it very difficult to acquire loans. A seemingly insignificant missed credit card payment from five years ago could hinder your ability to acquire a home loan or vehicle finance. The good news is that there are easy steps you can take to repair your your credit rating and consolidate your debt so that your name is removed from the blacklist.

Where To Start

First, checking your credit history is essential so that you know where you stand in the eyes of a financial institution. The credit report will indicate whether or not your creditors view you as a credit risk and how responsible you have been about consolidating your debt. I suggest applying for a credit report before applying for a loan so that you know your credit status before potential lenders check you out. There are several Website sources you can go to, to obtain a credit health report. For a nominal fee you can find out your credit history within an hour.

Know Your Debt

It is also important to identify and understand the type of debt you owe. There are various types of debt that a person living in South Africa can be in arrears for. Banks will investigate all these areas when considering whether or not you are viable for a loan - Personal loans, credit cards, vehicle finance, furniture accounts, in-store accounts, mortgages, and overdrafts.

Knowing your credit score and clearing up any errors or inaccuracies is vital to your financial state. Start now and take charge of your financial circumstance. Consult a professional debt counselor if necessary as they are trained to provide advice on debt solutions. Whatever way, start today to ensure a bright financial future.

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Credits: Make Money Online | Andreas Viklund