Identity Theft
Imagine applying for a credit card or a loan, and being denied because of poor credit. You think it must be a mistake. You are meticulous about paying your debt on time and you are positive that your credit rating is perfect. You request a copy of your credit report and find, to your astonishment, dozens of unknown and delinquent credit cards and loans issued under your name and referencing your Social Insurance Number.
Identity theft, or the stealing of personal information to commit financial fraud, is one of the fastest growing white-collar crimes in the country. According to the RCMP, there were 20,000 new cases reported in 2002. The Council of Better Business Bureaus in Canada estimates identity theft costs $2.5 billion a year to consumers, banks, credit card firms, stores and other businesses. What is Identity Theft?
In effect, your identity is stolen by a thief to obtain credit from different types of institutions. Typically, all the thief needs is your name, phone number, address, Social Insurance Number, and date of birth. Posing as you, a person can apply for instant credit, in person or through the mail, using a false driver’s license with their own picture. They often provide another address claiming they have moved.
The thief can use many techniques to obtain your valuable personal information. These techniques include:
- Mail Theft – The thief steals your personal information by stealing mail from your mailbox. The required personal information is contained within bank statements, credit card statements, Notices of Assessment from Canada Customs and Revenue Agency (CCRA) and driver’s license renewals.
- Change of Address – The thief files a fictitious change of address card at your local post office station and diverts your mail to another address thus obtaining the necessary documents.
- Dumpster Diving – The thief will rummage through garbage bins for credit card receipts, bank statements and other documents containing your personal information.
- Inside Job – The thief may have relationships with employees of credit card companies, financial institutions, governmental agencies or other agencies that would have access to your personal information. The thief would collude with the insider to perpetrate the scam.
- Wallet/Purse Theft – The thief may obtain your personal information from a stolen wallet or purse.
- Solicitation – The thief calls under pretense, such as a government official taking a census or your financial institution updating their files, and solicits your personal information directly from you.
You may never be able to prevent identity theft; however, there are many techniques you can use to reduce the chances of becoming a victim.
o Order a copy of your credit report annually to review all credit thoroughly. Any unfamiliar items on your credit report should be investigated by contacting both the creditor and the credit-reporting agencies (Equifax and Experian).
o Close all dormant bank and credit card accounts.
o Keep track of monthly statements that you should receive from your legitimate creditors. Late statements from your creditors may seem like a reason to celebrate, but further investigation may indicate that someone has changed the billing address on your statement without your knowledge or approval.
o Never give your credit card number or other personal information over the phone or internet unless you are certain that the person or business is legitimate. If necessary, call the person back before divulging key information to ensure that the person and organization are legitimate.
o Take your name off of promotional databases.
o Use complex passwords to protect your accounts. Never use your mother’s maiden name as a password as this information can be easily obtained from public records (e.g. birth certificate).
o Review your credit card statements and phone bills carefully for unauthorized use.
o Consider having an unlisted phone number or listing your number under your first initial as opposed to your complete name.
o Shred documents that contain your personal information including pre-approved credit offers.
o Never carry your Social Insurance Number in your wallet or purse and never give out your Social Insurance Number except for limited purposes (CCRA, your employer, legitimate financial institutions).
The above listed techniques may not guarantee the safeguarding of your personal information and credit, but it will make it difficult for a thief to readily access your information.
Victims of Identity Theft
It is quite disconcerting to be a victim of identity theft. It is a daunting and time-consuming task to restore your name and credit rating.
The following are the minimum steps that should be taken if you have become a victim:
Contact the fraud units of major credit reporting agencies, such as Equifax and Experian, and inform them that you have been a victim of identity theft. They will send you the latest copy of your credit report and have you fill out a corrections form flagging unauthorized credit issued in your name. A credit watch will be put on your account. Therefore, you will be contacted immediately if someone is performing a credit check or trying to open new credit using your Social Insurance Number.
Contact the police and file a formal report. This is important to prove to creditors that you did not authorize certain credit issued under your name and Social Insurance Number.
Report the identity theft to all your legitimate creditors and put them on notice that someone has stolen or attempted to steal your identity, and that someone may try to open new accounts or services using your identification. This includes calling your financial institutions, telephone, electrical and gas companies. Arrange for new accounts, credit cards, debit cards and instant teller cards and cancel all of your old accounts and cards. You should also ensure that key information has not been changed in your legitimate creditors’ databases. Finally, it is imperative that you set up new complex passwords with your creditors to ensure that only you can access and make changes to your accounts. The passwords should not be your mother’s maiden name, your birth date or middle name, but rather a word or phrase that only you know. It is prudent to memorize your passwords and do not carry them in your wallet or purse.
Notify the passport office and other key governmental agencies, such as your local post office and CCRA, of the theft.
Do not pay any or part of an invoice or bill that has resulted from identity theft. This may indicate that you are no longer disputing the credit or charge.
Be aware of how vulnerable your personal information is to theft. It is always wise to use your common sense when giving out your personal information.