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Detecting Identity Theft

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Identity theft has been on the rise over the past few years.  We see it in a lot of different ways.  From my perspective, I see it when I try to file a tax return for one of my clients and the IRS responds by saying that the return (a fraudulent one) has already been filed. We also hear about it a lot in the news.  It has even been the title of a recent holiday movie starring Jason Bateman and Melissa McCarthy.

In our June newsletter, I discussed what do do regarding IRS identity theft.  In this follow up article, I discuss how to detect it.

The best way to monitor this is to check your banks statements and credit card statements monthly and your credit reports annually.  Actively monitoring these items will alert you to unauthorized charges and accounts opened fraudulently in your name.

Your credit report reflects information about your bills, loans, repayment history, available credit and outstanding debts.  Whenever you apply for a loan or complete a credit application (i.e. for new credit cards and purchasing a car), lenders use your credit report to approve you.

You can request a free copy of your credit reports once a year from each of the three major credit bureaus – Experian, TransUnion and Equifax.  It is important to obtain credit reports from all three agencies because information may not appear on all of them or may be reported differently.

What do you do after you receive your reports?  Here is what you need to know about reviewing them and what to do if you find a mistake.

Credit reports are divided into four major sections, each with a tale to tell

Identifying Information  This section contains exactly what you would expect – your name, address (current and previous), telephone number, social security number, birth date, employer (current and previous), and if applicable, your spouse’s name.

Credit History – reflects payment history with your lenders (banks, credit cards, mortgages, etc.).  This should be reviewed carefully because actions by identity theft will become apparent. Each of these entries will include the name of the creditor, account number, type of credit, date opened, last activity (date of last payment or charge), high credit (the credit limit or original loan amount), terms (the number of installments or monthly payment amounts), and the past due balance and status (open closed, inactive) of the debt as of the date of the report.

Public Records – reflects your history of meeting financial obligations and will include bankruptcies, judgements, tax liens. etc.  Make sure these belong to you and not someone who used your personal information!

Inquiry Section – lists all businesses that have received your credit report in the last 24 months.  If you do not recognize one of the listing, be sure to investigate it and why they are looking at your credit report.

Now that you know how to read the report, what happens if you find a mistake?  There are several steps that you should take right away:

  • Contact the credit agency immediately and dispute the incorrect item(s).
  • If there are several items that are incorrect, consider contacting a company that cleans up your credit reports for you.
  • If you believe your identity has been stolen, contact the FTC’s Identity theft hotline at 1-877-IDTHEFT (877-438-4338).
  • Keep detailed records of every conversation and letter in a file.
                           Adapted from The July 15, 2013 Twenty Twenty Letter
author Ryan Howison,John Hancock Investment Advisor

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