Theft and Credit Fraud - How to prevent it, what to do if you're a victim

Having somebody steal your identity or fraudulently use your credit is a horrible experience. A friend of mine had his identity stolen a few years ago. I've never seen a person get so frustrated and depressed so quickly. After the initial anger and feeling that he was violated, the hard part began. He spent hours upon hours on the phone with credit bureaus, creditors and credit card companies trying to clean up the mess that was created. I'm writing this section of the site because I don't want anybody to have to go through what he went through.

Do yourself a favor and bookmark this page. Go back and read it every once in a while so that you don't forget anything in here. You'll find everything in here from simple protection tips to more complicated subjects like the benefits of credit monitoring services. Spread the word. If everybody gets educated about this crime, it will make it tougher for the criminals to pull off. Nothing pisses me of more than one of these jackasses getting away with thousands of dollars and then leaving the victim to clean up the mess.

Believe it or not, identity theft is not illegal in many states. If you become a victim, it will be up to you to prove that it happened and resolve everything yourself. Even where it is illegal, creditors that lose money due to fraud rarely prosecute the offenders. They just write it off as a loss and move on. It sucks but there's not much you can do about it except write your elected officials and ask for tougher laws.

There are two main things to be concerned about when it comes to your credit and personal information. The first one is "credit theft" or "credit fraud" and the second is "identity theft".

Credit theft (also called credit fraud) is a criminal making purchases on accounts that you already have. The criminal will steal one of your credit card numbers and use it to make purchases. Even though credit theft can be a pain, it is no where near as hard to deal with as Identity theft. Identity theft is when a criminal uses your personal information to open new accounts. In the case of identity theft, the criminal will obtain personal information about you and use that information to secure credit as if they were you. They will open credit card accounts, take out car loans and home equity loans in your name and LEAVE YOU WITH THE BILL.

This section will be split into two parts. In the first part, I'll discuss the ways that you can protect yourself from identity theft and credit fraud. These tips include signing up with a credit monitoring services. Credit monitoring services allow you to constantly keep an eye on your credit file. As you read this article you will learn why this is so important.

In the second section, I will provide a list of things to do if you have already become a victim. There are things that you can do yourself to resolve the situation or you can get help with products like Identity Restoration from MyIDfix.

Protect Yourself from Identity Theft and Credit Fraud
Obviously, nobody wants to become a victim of credit fraud or identity theft. It's one of those things that you probably don't think about on a regular basis but it's out there. There are several different ways that a thief can get the information to steal your identity.

DIGGING THROUGH THE TRASH - One of the easiest things that a thief can do to gather information about you is digging through your trash. Although this doesn't sound like the most pleasant thing to do, they know what kind of information can be found in the trash because people don't think about what they are throwing away. You can protect yourself from this disgusting act by doing a couple of simple things. First off all, never throw out anything that has your account numbers or personal information on it without shredding it. Paper shredders are relatively inexpensive. We recommend that you use a cross cut shredder, because a thief can relatively easily piece together the strips from the strip cut type of shredders. The cross cut shredders are a little more expensive but can save you from a horrible experience later. To make it even more difficult for the thief, mix your shredded paper in with other trash (the ickier the better). By mixing the trash up, it will make it very difficult for somebody to find matching pieces. Also, getting other stuff all over the shreds will further damage the print.

THE ACCOUNT UPDATE SCAM - This scam is usually carried out via email although it could also be done over the phone. Typically you will receive an email which will look like it's from someplace where you have an account such as your internet service provider. They will tell you they need to update your account information and ask you to send them things like your credit card number. NEVER SEND ANY KIND OF PERSONAL INFORMATION VIA EMAIL. It is very easy to make an email look like it came from somewhere "professional" like your internet service provider. I can send you an email right now that say's it's from "America Online" when I really sent it from scamemail@scamsareus.com. If you get a request like this via email or phone, call the company that supposedly sent it to you. If they gave you a phone number to call, make sure it matches the real phone number by looking up the real number on the company's web site.

OPENING THE MAILBOX - There is a lot of information about you that gets sent to your mailbox. There are also many vulnerable items that you put in your mailbox every day. One of the most vulnerable is the checks that you write. It is very easy for a thief to get a check and change the "pay to the order of" line and deposit it in an account that they set up. When mailing things that have personal information or checks, it is always a good idea to mail them in a sealed mailbox or drop them at the post office. For incoming mail, the safest thing to use is a locked mailbox or a P.O. box.

THE LITTLE THINGS - One of the keys to protecting yourself is to quickly identify signs that you may be becoming a victim. The faster you realize that something is wrong, the less pain you will have to go through to resolve the situation. You should always carefully look over your credit card statements and make sure that no unauthorized charges have appeared. Even if it's a charge as small as a tank of gas, it could be an indication that somebody has access to your account and may be ready to do more damage to your credit.

CRIMINALS WITH ACCESS - Even after following all these prevention tips, it is still possible that your identity will be compromised. There are people at companies that have legitimate access to your information. Unfortunately, sometimes somebody with access will get involved in drugs, develop gambling debts or just become greedy. These things could cause them to cross over into the criminal world. In order to get money to support their habit or greed, they may either use your information or sell your information to other members of the criminal underworld. In order to make sure that you limit damage from this unstoppable type of theft, you must check your credit file often. Several companies have come up with an easy way for you to monitor your credit file called credit monitoring services. These services provide you with access to your credit file throughout the year.

Although there is a yearly subscription charge for the services, it is well worth the ability to spot theft immediately. You'll get unlimited views of your credit report during the year. This feature will allow you to stay on top of your file. You'll see right away if somebody has opened an account using your name. You'll also be able to see bad marks on your credit report as soon as they appear so you can deal with them without delay. The small yearly fee for a credit monitoring services such as  the Equifax Credit Watch are more than worth it to prevent the damage that can be done if you don't know that your identity has been compromised.

Top Credit Monitoring Services
	Equifax Credit Watch - This monitoring service is available in two levels (Gold and Silver). Both of them share many features like: -Monthly "No Alerts" e-mails for peace of mind -Online disputes to save time -Email alerts of possible identity theft (Gold within 24 hours, silver within 7 days) -Identity theft insurance (Gold $20,000 no deductible, silver $2500 with $250 deductible) The Gold level includes additional features such as: -Unlimited access to your Equifax credit report -Victim assistance Click here to red more details about the Equifax Credit Watch Service
	TrueCredit lists your credit reports online instantly. Online 3-in-1 Credit Report from all 3 credit bureaus online instantly, no waiting. Credit Monitoring Service. Credit report with score, updates, identity theft alerts.

STEALING YOUR WALLET - Well, duh you may say but it's not that simple. What if the thief steals your wallet and takes out one of your 5000 credit cards and then returns the wallet to you pretending to be a good Samaritan. Didn't think about that one did you? Something you can do to prevent this is to only carry what you need in your wallet. Don't carry extra credit cards or your social security card. The less you have in your wallet, the less vulnerable you are to this nasty scam.

SECRET PASSWORD - Most creditors use your Mother's maiden name as your account password by default. Change this to a different word that is difficult to guess. It's not that hard for somebody to find out your Mother's maiden name, it's much harder for them to guess a password that you made up.

EBAY AND PAYPAL SCAMS - Another way they get your ID, is they hijack your eBay or PayPal ID and login information. There is currently a huge problem with ebayers getting emails that appear to be official email from eBay or PayPal, asking you to "click here" and re-enter your user id and password, or to email them your password for some maintenance issue, or some other bogus excuse. The bottom line is they all want your password. These emails are very powerful and convincing, they often have eBay and PayPal logos on them. The scammers even spoof the "sender’s" address so you think it really came from eBay. It’s important to remember that no legitimate company will ever ask you to email them your account information. You should always login to your accounts using a secure connection. Even if eBay does send you a message about your account, don’t use the links in the email. Use your bookmark for eBay in your browser, and log onto eBay the way you normally do. That is always your safest bet.

If your eBay user ID is your email address, go change it immediately. The scammers have robots that search eBay looking for email addresses to spam and scam. If they find your user ID, and it’s an email address, YOU are next on the list, and I don’t mean a buddy list either!

If you answer those emails, you now give them the red carpet right into your accounts. Then they hijack your user ID, using your good feedback to rip off other buyers with fake auctions, or fake escrows. Then you become the patsy, because all the victims will blame you and ruin your positive feedback. If they have your Pay Pal ID, they can drain your bank account.

MORE TIPS - There are some more things that you can do to protect yourself. Although it's not as prevalent for a thief to exploit these holes, it can't hurt to be vigilant.

-Make sure that nobody is looking over your shoulder at an ATM machine. Keeping your PIN secret is one of the most important things you can do.

-Memorize all of your account PINS and passwords and your social security number. If you do need to write them down, make sure to hide them very well. Don't keep them in your computer because they might be vulnerable to a hacker.

-See if your bank will let you pick up new checks at the bank instead of having them mailed to you. Even though it's hard not to notice that you're missing hundreds of checks or that somebody opened the package, it couldn't hurt once every few years to spend an extra few minutes picking them up to prevent a theft.

-If you are using DSL or a cable modem, make sure that you are using a hardware or software firewall to protect yourself from hackers.

-Be careful when using wireless networks. Make sure that you put as much security in place as possible so somebody can't drive by and pick off your information.

Remember that it's your responsibility to handle everything if you become a victim of identity theft and prove that your identity was stolen. You should do everything possible to prevent it including signing up for the credit monitoring services. You'll have to pay every year for services offered by companies like Equifax and TrueCredit, but trust me, it will be more than worth it the one time it saves you from having your credit compromised.

What to Do if You're a Victim of Identity Theft

If you are a victim of credit fraud or have had your identity stolen you must act quickly. It is most likely going to take weeks to resolve all of your problems. In fact, on average it takes a person around 200 hours worth of work to fix the problems created by identity theft. It's going to be a frustrating and horrible experience.

One important thing to know is that although you are the victim, you may not be treated so nicely by the people you have to deal with. They are going to make you prove everything. So be organized. Keep all of your records.

The first thing to do once you have realized that you have become a victim of identity theft is to contact the fraud departments of ALL THREE credit bureaus. Let them know that your identity has been stolen and ask that a "fraud alert" be placed on your account. What the fraud alert does is it notifies potential creditors to contact you by phone before extending credit. This action will make it very hard for the thief to do any more damage. At this time, you may also request a copy of your credit report from each bureau. Credit reports are free for victims of identity theft. Here is the information that you need to contact the bureaus:

Once you have contacted the credit bureaus, the next step is to start to deal with the fraudulently opened accounts. You need to contact the security departments of each of the creditors or financial institutions which have opened a fraudulent account in your name. Ask them to close the accounts immediately. Also, the FTC recommends that for any new accounts that you open, have a password put on them and do not use your mother's maiden name.

Once you have contacted the credit bureaus, creditors and financial institutions, you MUST FILE A POLICE REPORT. File the report with the police department in the jurisdiction where the identity theft took place. You should request a copy of the report so that you can use it as evidence later on if you need it. Some creditors or banks may want proof that you filed a police report. You should also file a report with the Federal Trade Commission (FTC) which can be done by calling 1-877-ID-THEFT, mailing to Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, DC 20580 or following this link: https://rn.ftc.gov/pls/dod/widtpubl$.startup?Z_ORG_CODE=PU03.

What to Do if You're a Victim of Credit Theft (Credit Fraud)
You will most likely find out that you were a victim of credit fraud when you review your credit card statement and find unauthorized charges. As soon as you notice the unauthorized charge, call your credit card company to dispute the charge. Also you should have your account number changed IMMEDIATELY so that the thief can't use your card anymore.

Some Useful Links

Federal Trade Commission (www.ftc.gov)