More Ammunition to Protect Yourself from Identity Theft

According to the Federal Trade Commission, identity theft costs its victims more than $25 billion in losses each year. The average loss per victim is $4,543, according to Javelin Group. But identity theft victims don’t typically discover the theft until 12 months after it occurs.

There is no question identity theft is a growing problem, aided in part by the “internet age” with practically every financial transaction accessible online.

So how can we protect ourselves from these cyber bandits? Should we throw the computers out the window and go back to mailing checks and filling out applications in person? Of course not. But we can take every precaution to avoid being victims of identity theft. Just like locking our car doors and our houses, we need to do everything we can to protect ourselves against electronic theft.
There are many web sites and articles which address how to protect your identity from theft. There are even companies now that will take needed preventive action for you. There are some basic steps we can all take that will help.
1) Buy a shredder and use it. Shred everything that has any personal information on it such as your name, address, account number, and social security number before throwing papers with identifying information into the trash. This printed information is what a thief needs to assume your identity.

2) Never give your social security number to anyone except when applying for credit. There was a scam this tax season in which prospective victims received e-mails appearing to be from the IRS asking for social security numbers to confirm eligibility in order to receive the recently approved federal stimulus package rebate. The IRS knows your social security number already. This scam was quickly thwarted by the media getting the word out to the general public.

3) Monitor your credit report. Trans Union, Equifax, and Experian allow consumers to obtain free credit reports annually. Check your reports and make sure all accounts listed are yours and check that the amounts shown are correct. By the way, going to Freecreditreport.com actually will cost you $14.95 per month to belong to their Triple Advantage Program. They have a catchy jingle, but it is not free. Actual free credit reports come from annualcreditreport.com.

4) Freeze your credit. No, this doesn’t mean actually putting your credit cards in the freezer to hide them from your spouse or teenagers. Credit freezing means preventing anyone from pulling your credit bureau without your permission.
Historically, any person or company with a credit reporting agency account could pull a credit report on anyone if they had their name, address, and social security number. Haven’t you ever wondered how and why you get so many pre-approved credit card solicitations in the mail?

The credit card companies pull your credit report, make sure you pay your existing cards on time (or on-time-enough enough for their standards) and then they magically pre-approve you and offer to send you their card. This is nothing more than a harmless nuisance that is resolved by shredding the portion of their letter that contains your personal information.

Unfortunately whatever legitimate law-abiding citizens and companies can do can also be done by criminals. One of the ways a person’s identity gets stolen is by the criminal obtaining a credit report on their victim, then contacting the credit card companies listed on the report and telling them the person has moved and lost the credit card.

If this is a successful address change for the criminal (in the victim’s name) the credit card company mails a new card to the criminal’s specified address. The problem is, it has your name on it and when the bill is unpaid the credit becomes damaged. Damage to credit history is much more than a nuisance and it could take years to recover from false reports of slow payment.

In the 2008 session of the Georgia General Assembly the House and Senate passed HB 130, otherwise known as the Credit Freeze Bill, which would go into effect no later than August 1, 2008. As of this writing, this bill awaits the governor’s signature.

Freezing your credit can help prevent identity theft by not allowing anyone to pull your credit report without your permission. There are a few exceptions such as your bank, your existing creditors, a court order, etc. Bbut for the most part, your report can’t be accessed unless you say so.

What happens if you need to apply for credit? You thaw your credit. Once you freeze your credit, you can thaw it either permanently or temporarily. During the freezing process you will be issued a login and password that will allow you to thaw your credit within 15 minutes if needed. That way when you are browsing your local car lot or electronics store and see something you have to have, but can’t afford, in spite of my advice in “Staying Out of Financial Trouble in Troubled Times:”: Johns Creek Post, March 28, 2008, you have the ability to thaw your credit faster than a pound of frozen hamburger.

How much does it cost? HB 130 limits the fee to $3 per act. In other words, $3 to freeze, $3 to thaw, either temporarily or permanently, and $5 to replace a login or password. These fees are assessed per credit agency, so to cover all three agencies will cost you $9 per act. People over 65 years and older over, or documented victims of identity theft, will not be charged the freeze or thaw fees.

What if the new legislation isn’t signed i to law by the Governor? All three credit reporting agencies currently allow consumers to freeze their credit reports for $10 per freeze or thaw per credit agency. Georgia HB 130 limits those fees to $3. If the Gov. Perdue does not sign this Bill, Georgia consumers will still be able to freeze their credit reports at the higher $10 fee.

One of the best things about HB 130 is that it has raised consumer awareness, how Georgians can protect themselves from identity theft, and limits the fees credit reporting agencies can charge