DIY ID Theft Protection
Do you want to be one of over eight million identity theft victims? No, but most of the services sold by "identity theft protection" companies you can get for free. Here's how.
Identity theft protection companies love touting advertising statistics like "8.4 million adults were victims of identity theft in 2007" and "the mean fraud amount per fraud victim was $5,720 in 2007" (PrivacyRights.org) because they're really scary. There's almost no reason to pay a monthly fee for something you can do yourself, most of the time at no cost. Here's what ID Theft Protection usually involves. Note: Several of these not only make it hard for other people to get new credit under your name, but also for you, so be sure to pick the ones that work best for your financial situation.
CHECK YOUR CREDIT HISTORY
The first step in prevention is to check whether you've unknowingly become a victim. By keeping close tabs on your report, you can identify signs of fraud as early as possible. Look for any lines of credit opened up in your name that you don't remember. If you spot them, dispute the credit item with the credit bureau and let them know it's identity theft. You'll need to do this with all three bureaus. You can get your free credit report from annualcreditreport.com. Because you only get one free one from each bureau per year, I like to check one report from a different bureau every four months. When you pay for identity theft protection, this checking is one of the "benefits" they tout... something you can do yourself, absolutely free.
FREEZE YOUR CREDIT
You can freeze your credit report, stopping most identity thieves immediately. With your credit history frozen, no one can access your credit history. If a responsible lender can't access your history, then they won't give the thief any credit. They could have all the information in the world but your credit is locked away. It's a pain to initiate, costs about $10 at each bureau (and you'll have to do each one separately), but is a very effective strategy if you've been having identity problems.
Each state deals with credit freezes differently. In some states there are fees, in others credit freezes are only available to consumers who have filed an ID theft related police report. Other states do not allow credit freezes at all. To find out what the laws are in your state, check out Consumer's Union for an up-to-date round up of credit freeze laws.
STOP THE UNSOLICITED CREDIT CARD MAILINGS
Save a few trees and your identity by signing up at OptOutPrescreen.com, that will stop most of those unsolicited pre-approved applications. Then call up all of your cards and ask to be removed from their marketing lists, which should stop all the rest. OptOutPrescreen.com stops mailings from companies you don't have an existing business relationship with, calling each card will stop mailings from companies you do have an existing business relationship with. By reducing those pre-approved offers, you reduce the risk some someone opens up your mailbox and steals one of them for their own nefarious purposes.
PUT FRAUD ALERTS ON YOUR CREDIT HISTORY
Call up each bureau and request that they put a fraud alert on your account. This lets any potential lender or creditor know that they should do some extra investigating when it comes to their request because fraud has occurred in the past. Lenders don't want to be party to identity theft anymore than you do so they will take the notice seriously. It's not a hard protection like freezing your credit, but it's better than nothing if you don't want to deal with the hassles of freezing and unfreezing your credit.
BUY A CROSS-SHREDDER
A cross-shredder is a paper shredder that cuts vertically and horizontally, turning sensitive mail into confetti. If you think a torn up credit card application wouldn't be accepted by any respectable credit card company, you'd be wrong. Red Tape Chronicles has a story about how Chase approved a torn up credit card application! You can pick up a cross-shredder at any office supply store and they're well worth the investment.
If you read identity theft protection company websites, you'd think they had some secret way of putting a force field around your credit - they don't. As for large dollar guarantees to protect your identity, many only cover failures on their part. If a thief gets through by some other means or doesn't fit their narrow interpretation of "theft," guess who else you have to fight? Yep, the ID theft company itself. With those steps, you can do for free what some identity theft companies will charge you a ridiculous $20 a month for. Save your money for all those "hot deals" at Circuit City.
Jim writes about personal finance at Blueprint for Financial Prosperity.
(Photo: Getty)
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Comments:
I forgot all about the OptOutPrescreen.com website. I'll be doing that on Monday.
@Matthew Harding: I did it by phone (888-5-OPT-OUT) awhile back, and it works like a charm. Calling the companies I actually have accounts with to stop the offers has been on my to-do list for awhile. Good article with some great reminders!
Remember that putting blocks or alerts on your credit can prevent you from signing up for on-the-spot credit offers such as store cards, which you may have a good reason to want to sign up for. You can sometimes get it approved with phone calls but only if you have all the right info on hand.
There's something wrong with the optout site at the moment:
"A condition exists that prevents us from being able to accept your request at this time. Please try our toll-free request number at (888) 567-8688.
Please visit this website again at a later time. Thank you."
@jenjen: On the other hand, when K-Mart offers you a free bottle of pop or package of candy to sign up ([consumerist.com]) you can take the freebies without taking the hard pull hit. ;-)
Is the "credit alert" something you can just add for the hell of it? Or does there need to be a legitimate alert? I'm all over that if you can just add it on. If it means a little extra scrutinizing and me having to provide a little more info, I'd be ok with that.
Shouldn't every story about the ID theft companies include the fact that thieves usually sign up for them right after stealing an ID?
No need for a shredder if you have a fireplace. Or a metal bucket and a sizable patch of exposed mineral soil. But with the fireplace you can let the junk mail heat your home.
@TechnoDestructo: Agreed. I shred my old bank/credit card statements, applications, etc and use it as fire starter.
@TechnoDestructo: That's a nice idea. I'll probably use that idea when I can't afford to pay the gas bill because those prices haven't come down like automobile gas prices have...
Don't EVER use that site with the catchy jingle on TV! F-R-E-E, that spells SCAM! (It's owned by one of the bureaus). I can only get my free reports once a year from that government site, but a better one is creditreport.com
A bucket of water is better. Pulped paper can't be put back together, but burned paper can still be read. :-)
Cheaper, too... And if you want to put lots of effort in, you can use the pulp to make paper again! :D
Any opinions on the Zander Insurance program? They seem unique in helping to clean up after the theft occurs, not just the worthless "monitoring" before-the-fact.
[www.zanderinsurance.com]
Disclaimer: Not affiliated or customer of Zander, but I am a Dave Ramsey fan (Dave endorses Zander).
A condition exists that prevents us from being able to accept your request at this time. Please try our toll-free request number at (888) 567-8688.
Please visit this website again at a later time. Thank you.
using latest Firefox stable in windows... any idea why this is happening?
A fraud alert can be placed for any reason or no reason at all. The credit bureaus want you to believe it can only be placed if you suspect fraud, but the lovely automated voice response lady doesn't ever ask for a reason.
More info here - [www.fightidentitytheft.com]
@bobbo33:
I bought the Zander Insurance two years ago but I (fortunately) haven't had to use it. I listen to Ramsey everyday and agree with most of what he says. 2500 miles a week in a semi me gives a lot of time to listen.
I froze my credit reports three years ago and since I haven't opened any new credit lines I haven't had to hassle with unfreezing them. I also bought the program at Equifax ($100/yr) where I can check my credit report an unlimited number of times. I check it at least once a month. And of course the free credit reports from the other agencies.
Along with the shredder I think I'm covered. But if it does happen the Zander insurance should take a lot of the hassle out of it. Or so I hope.
A cross shredder only helps for the mail you receive, if something gets misdirected along the way to you it doesn't help. Sign up for paperless anywhere you can to eliminate it at the source.
Enine has a good point. If the mail never becomes generated in the first place, you have nothing to fear.
For all of that spam you still receive, "strip" or "cross-cut" shredders are ineffective. The best way to ensure your documents are nigh unreproducible is to invest in a "micro-cut" shredder like this bad boy: [www.fellowes.com] * A micro-cut shredder literally turns paper into confetti**. This model will also make short work of CDs and credit cards. Both my parents and I have had these babies for over a year, and we couldn't be happier with their operation.
* At the time of our purchases, Buy.com had the cheapest price, with a discount if you're a first-time Google Checkout user.
** Not to be confused with so-called "confetti-cut" shredders. Most manufacturers define "confetti" as strips of at least a half an inch long.
@jenjen: Please tell me one of these "good reasons" why I may want to sign up for additional credit cards, because I'm having a little bit of trouble thinking of one.
I should, but I really like getting catalogs in the mail. Unfortunately, I can't ever afford to order anything out of them!
Freeze your credit. Freeze your credit. Freeze your credit.
When the horribly irresponsible Bank of America gave away $12,000 of my money on seven separate occasions to thieves with ONLY a fake driver's license in my name (they didn't check signature, they didn't require a bank card, they didn't require a pin any of those times), there was one small bright spot in the deal -- the fact that my late friend Cathy Seipp, one of the smartest people I knew about finances, advised me to freeze my credit in 2005. I listened, so when the thieves went to Target, and Kmart, and Wal-Mart, and Sears, and Target again in hopes of getting instant credit, they were shot down, and all I got were chilling letters in the mail from these retailers: "So sorry we couldn't grant you instant credit -- did you forget you have a credit freeze on?"
I also recommend putting a password on every credit account so only somebody who has it can call and get information and/or change your address. Before you're a victim.
Finally, I want to recommend attorney and ID theft victim and now ID theft expert Mari Frank's book, "From Victim To Victor." It has all the letters you/I need to send to credit bureaus, etc., to clean up the mess, written by a lawyer. They're on a CD or you can xerox them out of the book, fill in your name and details in the blank and mail them in.
Finally, let me just express my white-hot rage for Bank of America's spectacular laxness in their fiduciary duty to guard their customers' money and identity. I'm just one of many who've experienced this. I've blogged about it at advicegoddess.com, and Chris Hooley, of Arizona, another victim, Chris-Hooley.com, has as well. If you bank at B of A, I'd advise you to read about our experiences. Had I known the reality of their "multiple layers of security" (in my experience and in those who had the same or worse experiences -- like a guy in the midwest who was able to get money just by holding his driver's license in his hand, NEVER showing it to the teller or having his signature checked or his bankcard and password demanded), I never would've banked there. I'm now at a small community bank with great service. My banker knows me, and not because I have big bucks. He knows his customers -- and likes it that way. When I called recently to say I might use the ATM in Paris, the guy on the 800 number knew my banker and had nice things to say about him (everybody does). Imagine that from some big anonymous we-don't-give-a-shit-about-protecting-your identity bank.
Does anyone know how to freeze your credit in Canada?
does using annualcreditreport.com affect your credit score, because you are pulling a report on your credit?
I agree there are a lot of identity theft protection companies who offer things that can be done for free. Sometimes identity theft is unavoidable no matter how cautious you are with your personal information. One of the better identity theft protection companies available today is SOLUS. Their website actually informs you of all the things that are free for consumers to do on their own. But they offer their members true protection including 24/7 credit monitoring with unlimited access to your credit report and credit score. They send you an email alert anytime anything changes on your credit report. They offer their members expense reimbursement for any out of pocket expenses related with an identity theft. They provide legal and emotional care. Best of all if you ever become a victim they do all the restoration on your behalf. Their website is http://www.solusid.com
I'm the recent victim of ID theft. Some AH/SOB stole my credit card # and charged more than two grand in Arizona, but I live in California.And I had my credit card with me in my wallet all these time. Now I have deal with all the phone calls and leg works. When I contacted my credit Union( Community America Credit Union) and wanted to know what should I do now ? The fraud specialist from my credit union advised me that there is nothing for me to do since I did not loose any money ????? Then I visited different websites and found out lots of information which my bank does not know. I reported to FTC, Credit agencies and local police station. I also had to freeze my credit for 90 days.If the police find that person I'll advice them to put a stick of match in that person's ASS !!
@mdmadph: Because if you can get a 10% discount on whatever you're buying that day and you were buying a few thousand dollars worth of furniture and/or appliances it might be worth it?
STOP THE UNSOLICITED CREDIT CARD MAILINGS
Those I've stopped using the described method. My current credit cards continue to send me "checks" (transfer a balance or just deposit!) despite several phone calls telling them to stop.
In Canada, my CIBC Credit Card gives me free reports any time my credit rating is checked, changed, etc...
@einstoch: Gotta love Frank the Bunny! He's come from the future to tell you to protect your credit.
I'm curious about the amount of identity theft that is done online vs. stolen mail/recycling. Does anyone have any figures for this? My suspicion is a far greater proportion of it is online and in large batches from compromised web retailers, but I'm not sure. I've purchased from so many places online I figure the best thing I can do is to carefully monitor my accounts.
Optoutprescreen totally works! I wish I'd done it sooner!
@YorkAnaxagoras: I am not sure about a freeze but you can call the three credit reporting companies and ask them to put a fraud alert on your report. I imagine you could also ask for a freeze.
@Lemmor: No, it's considered a "soft" pull by the credit bureaus and has no effect on your credit score.
When a potential creditor pulls your report - theoretically at your behest - that is a "hard" pull and can influence your score.
I just burn my statements. What better fun that to pretend to be an arsonist over your statements?
I use my credit card account statements as starter kindle for my fire place.
But my comment leans toward the comment in regards to free, "Annual Credit Report". We legally get one free look a year, what about the other 395 days identity thieves have a chance to steal our identity.
I like Canada's idea. Free credit reports all the time...What a concept.
@QuiteSpunky:
Thanks to high-profile news stories and Hollywood movies, many people imagine cleaver electronic tactics and slick intelligent hackers using sophisticated scripts and algorithms to hack into your corporate databases and online accounts.
Yet, according to the Identity Theft Survey 2008 by Javelin Research (leader in ID theft research), online methods of stealing sensitive information is actually quite rare. Most (79%) of identity theft stems from traditional low-tech methods including purse/wallet snatching, mail theft, shoulder surfing and dumpster diving.
Learn more about this here:
[www.mailboss.net]
www.mailboss.net/how-do-thieves-steal-your-identity/
This article is a really great resource for DIY Identity Theft Protection. We did a similar article here: [www.mailboss.net]
This article REALLY misses one MAJOR POINT. It recommends investing in a cross-cut paper shredder to turn sensitive mail into confetti. The only problem is a shredder is no good by itself. Stay with me for a second:
What good is it to shred the sensitive information you receive in your mail if it is not protected at the source? Are you really getting all of your sensitive mail? Would you know if you didn't? How long would it take you to figure this out?
Mail theft is a crime of epidemic proportions, and a leading cause of identity theft. Traditional methods (mail theft, dumpster diving, stolen wallets, etc.) make up 79% of tactics used in identity theft, according to the 2008 Identity Fraud Report by Javelin Research. Without a secure locking mailbox, your mail is vulnerable to anyone walking by to simply walk by open it up and remove pre-approved credit card offers, bills with account numbers, checks, and more.
A security locking mailbox is the first step in identity theft prevention. Consumers should know that not all locking mailboxes provide true security (for more info see www.mailboss.net/other-locking-mailboxes-part-i/)
With a secure locking mailbox and a paper shredder, you significantly reduce your risk of becoming the next victim of identity theft. Investing in a security locking mailbox and a paper shredder, as well as following the steps provided above in this article, are fundamental elements to a comprehensive approach to identity theft prevention.
pic: donnie darko anyone?