Safeguard Yourself from Identity Theft

Identity theft is when someone otherthan yourself uses your personal information—Social Security number, creditcards, driver's license, etc—for illegalpurposes without your permission.Recently, the Federal Trade Commission(FTC) ranked identity theft at the top of itslist of consumer complaints.

Widespread Fraud

In January, the FTC announced thatmore than 214,000 consumers were hit byidentity theft crimes last year, an increaseof more than 30% from the previous year.Among the crimes were credit card, phoneor utility, bank, employment-related, governmentdocument, and loan fraud.

If your credit card is stolen, you shouldimmediately cancel the card and notify theissuer. Unfortunately, that may not be theend of the story. The thief could use thatcard to acquire other credit cards, loans,driver's licenses, etc. In one recent scam,thieves used the names of deceased peopleto obtain loans.

Once someone has used your name andidentity, it's likely that you'll have to spendtime, money, and effort to clear yourname. In some cases, you will have toprove in court that you are not the criminal,but the victim. Until you clear yourname, it may be difficult, if not impossible,for you to be approved for loans, insurancecoverage, and mortgages.

The FTC offers the following tips if youthink someone has stolen your identity:

• Place a fraud alert on your credit fileby contacting the three major creditbureaus, Equifax, Experian, and Trans-Union. You will then be contacted beforeany new accounts are opened.
• Close any accounts that you believehave been used by the thief. Dispute anyunauthorized accounts, saying that youhave alerted the fraud department.
• File a police report and obtain a copy.You can use this report in the future as youclear up your records.
• File a complaint with the FTC. Whilefiling a complaint may not help you specifically,the FTC has a database of identity theft cases that are investigated by lawenforcement agencies.

Unprotected Information

Most importantly, you need to be alertso that you don't become a victim. Thatmeans not giving out any personal information.There's no reason for you to writedown your phone number on checks whenyou're buying something. When youreceive credit card solicitations at home,tear them up so someone doesn't retrievethem from your garbage. Review yourbank statements and credit card bills.Immediately dispute any charges thatwere made by someone else. Rememberto help your family out as well. If you haveelderly parents, make sure they're not givingout their personal information.

Scammers are constantly coming upwith new ways to steal your identity. InFlorida, thieves are inserting a sensor intocredit card receptacles in gasoline pumpsthat will copy all of your credit card information.Be on the lookout for this activityto spread to your state.

Stewart H. Welch III, CFP®, AEP,founder of the Welch Group, hasbeen rated one of the nation's topfinancial advisors by Money andWorth. He welcomes questionsor comments from readers at800-709-7100 or www.welchgroup.com. Reprintedwith permission from the BirminghamPost Herald.