Identity Theft: Will the Real John Doe Please Stand Up

By Neale S. Godfrey

MONEY TRIVIA
Question: What were some of the metals used to mint the first U.S. coins in 1792?

Answer: Metal was scarce. The colonists donated old nails, spikes, metal from ship wrecks, etc. George Washington donated a copper tea kettle and two pair of tongs.

I just heard an all too familiar story from a 20 year old college student, Jim. He was applying for his first credit card and was turned down because he had too many already. It's not what you think. In this case he really had none…so he thought. I advised him to immediately contact one of the three main credit bureaus to get to the bottom of this.

What happened? Jim was a victim of identity theft. Someone "stole" his identity and not only applied for and received three credit cards in his name, but also a cell phone and was about to lease a car. The fake "Jim" had used the real Jim's good credit, opened a post office box in another state and started getting and using the credit cards. Before being caught, the fake Jim had purchased items to the tune of $23,000.

There are clever crooks.

Jim is not alone; according to the FTC (Federal Trade Commission) last year there were over 500,000 other Americans who reported they fell victim to identity theft. With more than 1.3 billion credit and charge cards in circulation in the US, it's not a surprise that thieves see this as fertile ground. According to the Secret Service, card losses amount to billions of dollars each year.

Identity theft is something that you must discuss with your children, especially when they start buying on–line, using credit cards or open bank accounts. Explain that identity theft is when someone uses your personal information to get a credit card or bank account or even a mortgage. The bad guys virtually "steal" and use your name.

The 10–Step Program: Help you child (and you) to Protect Yourself from Identity Theft.

These are suggestions from the FTC (Federal Trade Commission):

Carry credit cards separately from your wallet or purse. If your purse or wallet is stolen, hopefully the cards are not in it.
Watch the sales clerk during the card transaction and ask for your card to be returned quickly.
Destroy the carbons and save all of your receipts and always compare them with your statement at the end of the month.
Keep a record of all your credit card account numbers, and the phone numbers of each company in a safe place.
Tear up or shred bills and receipts with personal information before throwing them away.
Review your credit reports each year to make sure nothing strange pops up and information is correct.
Use a locked mailbox or put a slot in your door for mail delivery.
Be careful when you give out your social security or driver's license number.
Never give out personal or account information over the phone unless you initiated the inquiry.
Contact the customer service line if you are going to give out credit information on the phone. This way you can check to see that the call is legitimate.

They've gone "phishing."

How do the con artists get the information they need? The most overt way is to steal credit cards. That's why your children need to know how to carry them in a safe place and must be cautious when giving out their numbers. There is another ploy called "phishing." That's when, for instance you received a phone call or email from a person pretending to represent a company. That supposed credible person would then ask you to divulge personal and financial information to resolve an alleged problem with your account. If you're not wary, this could sound fairly routine. The good con artist often gets the information directly from the victim.

Another way is that you could be contacted by phone or email and told that someone has tried to use your credit card and that your correct account number needs to be verified. In the case of email, they can go so far as to direct the unsuspecting to a phony Web site that looks like the legitimate company's site and asked to enter confidential information.

Step Away From the Computer.

Now that I've freaked you out, the comforting news is that the good guys are on the case. It's okay in most cases to give your credit card number or bank account numbers on line. The caveat is that the company be legitimate and uses encryption technology. That means they scramble information into a code that only the correct user will be able to decode.

You must make sure that you and your children use and update anti–virus and anti–spyware software regularly. You can set up your software to automatically install updates. Tell your children not to click on links from people or companies they don't know or download unexpected files or attachments (even from friends).

Would you like Spam, anyone?

Your children need to read Web site privacy policies to know if their information will be protected. They should check "opt–out" boxes when they are making online purchases. They also need to delete unwanted email without opening it if it comes from an unknown source.

The goal is to keep your personal information personal. You can install a firewall if you use a high–speed cable or DSL Service. You can also create a password that uses upper and lower case letters, numbers and symbols. There are also programs that wipe out all of your personal information from the hard drive of your computer before you discard it. Also, I know it saves time, but don't have your child use an automatic login feature that saves your user name and password.

US–Cert — No, it's not a new breath mint – it's a partnership between the U.S. Department of Homeland Security and the private sector. They pass along cyber–security alerts about new viruses and security tips. You can sign up for this free service at www.us–cert.gov/cas.

Let's look at your kids and your cards.

Children account for a lot of the online purchasing population. And most of the cards they use are the ones you, as parents give them to use. Therefore, if identity theft is going to occur, it's probably your identity at risk. This is why it's so important for your children to be aware of this threat. It is real.

Although legitimate businesses are beefing up security and trying to stay one step ahead of the identity thieves, the best protection is to keep the theft from happening in the first place. However, if you or your child does fall prey to identity theft, it's important to take action fast. The first step is to call the financial company that issued your card. Also notify any of the three major credit bureaus. The good news is that they will contact the other two to place fraud alerts on your credit report and send the report to you at no cost.

Credit Bureaus
Equifax:1–822–525–6285
Experian:1–888–397–3742
Transunion : 1–800–680–7289

You can also contact the appropriate Federal Trade Commission toll–free number.
Consumer Fraud: 1–877–382–4357
Identity Theft: 1–877–438–4338

Okay, I've left you hanging. What happened to poor Jim who had his identity stolen? There was a happy ending, but it was a real hassle — lots of phone calls, letters, emails etc. He did call one of the credit bureaus and they alerted the others. His bank also had a victim's assistance program and they advised him as well. His bank provided free identity theft reimbursement insurance which covers certain expenses he incurred. He proved that the credit cards were not his and he didn't have to pay them. The cell phone company also did not hold him responsible for the $2,500 in charges. How did this happen to Jim? He's not exactly sure. He did have a virus on his computer about two months ago, so the experts feel that's how the identity theft took place. By the way, he did finally get his new credit card… after three months of sorting this all out.

Neale S. Godfrey is a former bank president and an acknowledged expert on family finance. Her 14 books include a #1 New York Times Best Seller, Money Doesn't Grow On Trees and her latest book, Money Still Doesn't Grow On Trees: A Parent's Guide To Raising Financially Responsible Teens and Young Adults. She has authored an educational program called The One and Only Common Sense/Cents Series which corporations are donating into their local community schools and after–school programs. Neale has appeared on TV on The Oprah Winfrey Show, Good Morning America, The Today Show, CNBC, NBC, CNNfn. She frequently delivers lectures on "How to Raise Financially Responsible Children." For more corporate marketing programs, products, and books go to Neale's Web site www.childrensfinancialnetwork.com or call 908–879–8898.

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