Avoid this Identity Theft Nightmare
2019 was a pretty eventful year for Jessica Roy.
She stole a Tesla. She got into a car accident — a BMW, that time. She got a new iPhone. She opened two new checking accounts and went on a bad-check-writing spree for as much as $13,000 at a time. She attempted to open dozens of new credit cards. She even wrote a check for someone’s bail, which they skipped.
On paper, Jessica Roy had a wild year. In reality, that year and what followed have been a nightmare. What happened to Jessica Roy? She was a victim of identity theft.
Identity Theft is a Nightmare
The Federal Trade Commission (FTC) estimates that it can take approximately six months and 200 hours of work to recover from identity theft. This estimation is based on the amount of work needed to follow the necessary steps to ensure the victim is not responsible for the debt incurred.
What is Identity Theft?
Identity theft occurs when someone steals your personal information. This information can be used to open credit accounts in your name or receive benefits such as employment, insurance, or housing. Identity theft can have serious consequences for you and your family. It can negatively affect your credit, get you sued for debts that are not yours, result in incorrect and potentially health-threatening information being added to your medical records, and may even get you arrested.
The Best Way to Prevent Identity Theft
The most effective way to reduce the chances of identity fraud is by contacting the three major credit bureaus online and freezing your credit. By freezing your credit, you will prevent anyone from getting a credit card, securing a mortgage, renting an apartment, etc., in your name because the three major credit bureaus won’t give out your credit rating without you first unfreezing your credit. It’s easy to do online, it’s free, and it’s permanent. As long as you don’t lose your PIN, you can unfreeze your credit anytime with a simple phone call.
What is a Credit Freeze?
A credit freeze keeps the sensitive data in your credit files from being accessed without your specific consent. It protects you from fraudulent credit applications, even if a criminal has key information such as your birthdate and Social Security number. When someone applies for credit using your personal information, a lender or card issuer typically checks your credit before making a decision. If your credit is frozen, the potential creditor cannot see the data required to approve the application.
Placing a credit freeze is free for you and your children, as is lifting it when applying for new credit, and it won't harm your credit.
How to Freeze Your Credit
To freeze your credit, contact each of the three major credit bureaus individually:
Equifax: Call 800-349-9960 or go online. Check out the step-by-step Equifax credit freeze guide.
Experian: Go online to initiate, or for information call 888‑397‑3742. Here’s a detailed walk-through on getting an Experian credit freeze.
TransUnion: Call 888-909-8872 or go online. Read the TransUnion credit freeze guide.
Once a credit freeze is in place, it secures your credit file until you lift the freeze. You can unfreeze credit temporarily when you want to apply for new credit. It is essential that you remember your PIN for each of the three major credit bureaus.
Freeze Your Credit Before It’s Too Late
Amy Krebs was a victim of identity theft.
"I went to Equifax, Experian, and TransUnion, and you’re supposed to answer four security questions, which should be easy if it’s you: Which of these four addresses have you lived at? Which of these employers have you worked for?
I couldn’t get to two of my reports because the woman who stole my identity had infiltrated my credit history to the point that her information overrode mine.
I can’t even tell you what that felt like — like someone had taken over my life. I finally got into the third credit report by guessing questions.”
How to Unfreeze Your Credit
Go to the credit bureau website and use the account you created to freeze your credit to unfreeze your credit. You may also be able to unfreeze your credit by phone if you can provide certain verifying information. Unfreezing typically takes effect within minutes.
Reasons to Unfreeze Your Credit
While it's a good idea to keep your credit frozen all the time, there are some circumstances where you might need to thaw your credit temporarily. Primarily, you'll need to unfreeze your credit if you're applying for a new line of credit. Whether you're in the market for a new car, mortgage, rental apartment, or cell phone, your credit will be pulled by the lender to assess your ability to pay.
What About Tax Return Identity Theft?
“If a thief files a fraudulent tax return using your tax information and steals your refund, you’ll have to wait an average of 675 days to get the money rightfully owed to you,” according to the Taxpayer Advocate Service, a group within the Internal Revenue Service that works on behalf of taxpayers.
How Can I Prevent My Tax Return from Being Stolen?
The IRS recommends applying for an "identity protection pin" (IP PIN), a six-digit number that blocks someone from filing a tax return using your Social Security number. If the return doesn’t have the filer’s pin number on it, the IRS won’t accept it. Originally, the pins were reserved for victims of identity theft, but anyone can now request one as a preventive step. Once you have a number, the IRS issues you a new one each year. The downside is that you can’t file your taxes until you receive this new PIN every year.
What Did I Do?
I knew that if someone stole my identity, I would spend years trying to fix it. Company after company has had data breaches, and I know my personal information is being sold on the dark web. I have had a credit freeze for many years. I also put a credit freeze for my mother and children. It’s especially important to protect the elderly and children from identity theft. It’s simple, it’s free, it’s permanent. Do it today.
Sources:
NY Times Tax Refund Identity Theft
LA Times Identity Theft Nightmare
Forbes Someone has taken over my life
NOT FINANCIAL ADVICE
The information contained in this article is for informational purposes only and shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be. I do not accept any fees or commissions from anyone or any financial institution.
I’d love any feedback on these articles.
