s you read this, some thief is using the name, address, birth date, and Social Security number of a completely unknowing person to illegally obtain credit cards, checking accounts, and more. The crook also might use the victim's identity to apply for employment, an auto loan, or a driver's license. He or she even might commit a serious crime using that person's name. And worse, that person might be you.

Trans Union, one of the nation's three major credit reporting companies, estimates that an average 2,000 people call its credit fraud hot line every day. That's up from a total of 1,200 fraud calls during the hot line's first year in 1992. And consumer advocacy groups, such as the Privacy Rights Clearinghouse in San Diego, are receiving an increasing number of requests for assistance from victims of a crime that most law enforcement officials call "identity theft."

For victims, the nightmare might begin when someone steals a wallet or check. Or when someone pilfers financial or other records with identifying information from a trash can. Or it might occur when the perpetrator legally obtains credit bureau records while working for a credit grantor (a financial institution, auto dealer, insurance company).

Some victims become aware of the crime within days. Others are left completely in the dark for months—even years. One day you could be turned down for a job, a loan, or a mortgage because of an extensive history of bad debt that you never incurred. The lengthy process victims endure to untangle the web of fraud is draining both financially and psychologically.

Identity theft ultimately affects more than just the victim. As David Medine, a Federal Trade Commission (FTC) official, recently told a Senate subcommittee: "To the extent identity theft leads to higher interest rates, fees, and costs for customers of financial institutions, all consumers are harmed."

The following frequently asked questions include valuable tips and resources to help you prevent identity theft, as well as to detect and remedy fraudulent activity that could stain your credit record.
     It may be years
     before you learn
     that your credit
     has been wrecked
     by identity theft.

There is an
astounding amount
of public records
readily available
on the Internet.
Who are the most likely victims of identity theft?
It's been widely reported that identity thieves most commonly target high-income, creditworthy people. While that might be true in the case of organized crime rings, the fact is that anyone is a potential victim. "This is a crime of opportunity," says Beth Givens, director of the Privacy Rights Clearinghouse. According to Givens, the people calling her organization's help-line run the gamut from young to elderly, rich to poor, creditworthy to credit-risky.

What information do crooks need to assume your identity?
Believe it or not, thieves need only your Social Security number, name, and address to wreck your good credit. Using easily accessible public records, they can learn your place of employment, date of birth, and mother's maiden name. With any or all of that information, they can open a credit card account and immediately charge up to the limit—with no intention of paying, of course. You're left with the headache of convincing merchants, collection agencies, credit card companies, and credit bureaus that you didn't make the purchases.

How do thieves obtain a victim's identifying information?
Some do it the old-fashioned way: They steal a purse or lift a wallet. Others are far sneakier. They pilfer official-looking mail from mailboxes, or they use change-of-address cards from the U.S. Postal Service to divert your mail to another address—typically a vacant building. They "dumpster dive" for trash with revealing information, including preapproved credit card offers, canceled checks, and health records. If they're employed in the right place, they access information from personnel files or credit bureau reports. They collect data from public records, an astounding amount of which is readily available on the Internet from fee-based electronic reference services such as Informus, Infotel, Knowx, and LEXIS-NEXIS.

How do you protect yourself from identity thieves?
• Reveal your Social Security number only when absolutely necessary. Last year, the Social Security Administration reported a three-fold increase in fraudulent use of those numbers. You may be able to use a substitute number on a driver's license and in other public documents, such as insurance cards, Medicare cards, employee files, and student records.

• Never reveal any identifying information over the telephone or Internet, unless you know the person or business on the other end is reputable. If unfamiliar callers requesting information represent themselves as employees of a familiar organization (credit union, credit card issuer, insurance company, government agency), hang up immediately and call that business for verification.

• Contact the U.S. Postal Service if you suddenly stop receiving mail.

• Never write your credit card account number on a check.

• Tear or shred all preapproved credit and insurance applications, canceled checks, and records with identifying information. When you cut up a credit card, toss half in the trash one week and the other half the next week.

• Ensure that the major credit reporting companies do not sell your name to third-party credit grantors and insurance companies. Experian, Equifax, and Trans Union all provide forms to do this.

• Notify your state department of motor vehicles that you do not want it to sell your name and other personal data to third-party vendors.

• Contact the Direct Marketing Association to have your name removed from direct-mail and telemarketing lists.

     Recent federal and
     state legislation
     now recognize
     the rights of
     identity theft victims.

How can you find out whether someone has stolen your identity?
• Keep comprehensive financial records and faithfully reconcile all of your account statements every month.

• Order copies of your credit bureau report once a year from each of the three major consumer reporting agencies. Reports are available for $8 in most states; residents of Colorado, Maryland, Massachusetts, New Jersey, and Vermont are entitled to one free credit report annually. In addition, under the Fair Credit Reporting Act, anyone who has been denied credit, employment, or insurance because of a credit report is entitled to a free copy within 60 days of receiving the denial notice.

What should you do if you uncover an identity fraud?
• Notify the creditors that issued fraudulently obtained cards and/or creditors of existing accounts that may have fraudulent charges. If the fraud involved bad checks, contact the check verification companies that the affected merchants use.

• Supply financial institutions and creditors with written statements and supporting documentation. By law, you're not required to provide a notarized affidavit although many creditors may ask for one.

• File a report with your local law enforcement officials.

• Contact the fraud units at the three credit reporting companies and have your report flagged for identity theft. Have the companies add a victim's statement to your report. Find out how long they post a fraud alert, and whether you can file for an extension.

• Notify the Social Security Administration about fraudulent use of your Social Security number.

How does the legal system address identity theft?
Until recently, there's been a shameful lack of attention to identity theft. In most cases, law enforcement officials treat the defrauded business as the victim, not the individual whose identity was stolen. With passage of the Identity Theft and Assumption Deterrence Act of 1998, victims finally have a federal law that gives them the right to file police reports and recoup damages. The law also requires tougher sentencing for perpetrators. A handful of states also have passed laws that make identity theft a crime. In addition, the FTC has helped draft guidelines that electronic reference services may use to ensure consumer privacy. At least 14 companies, including LEXIS-NEXIS, have agreed to self-regulate their industry.

Consumer advocates, however, are skeptical that victims will gain easy recourse under the new laws. Local police often are unaware of victims' rights, according to Givens, even in states with identity theft statutes. Most victims find they have to be persistent and assertive in clearing their names. It's up to all consumers to protect their good names and credit by remaining constantly vigilant.

Where can I get more information?
Web sites with information about identity theft, recent legislation, and privacy rights include the Privacy Rights Clearinghouse, the U.S. Public Interest Research Group, the FTC, and the Social Security Administration. Useful key words include "identity theft," "identity fraud," "credit reporting," "credit repair," "credit card fraud," and "consumer protection."

©1999 Credit Union National Association Inc.