Identity Theft
Posted By: Dr. Frugal in Credit on 08/08/2007 at 08:46:29
Identity theft occurs when someone uses your personal information (such as your name, social security number, or credit card number) without your knowledge, to commit fraud or theft. Thieves may apply for a credit card in your name, using your date of birth and social security number, and charge large amounts before you even know the account has been opened. When the bills aren't paid, the delinquency goes in your credit history. It can take months or even years to prove that the card was obtained fraudulently and to clean up your credit report. In the meantime, you may be denied credit.
Another tactic used by thieves is to call your credit card company and report a change of address on your account. Your bills get redirected somewhere else, so you might not realize there's a problem while the thief is running up charges on your account. Other popular scams include establishing cellular phone service in your name or setting up a bank account in your name and writing bad checks against the account.
You can see why it's so important to be careful about how and where you discard bank statements, credit card statements, credit card offers, or any paperwork that includes your date of birth or social security number. In these times, it's a good idea to own a personal shredder and shred all documents containing personal information before putting them in the trash. Paper shredders can be purchased at an office supply store for less than $25. Additionally, there are several companies offering ID theft insurance. On this site we have compared two of them: Lifelock and Debix.
If you believe you're the victim of identity theft, report it to the three credit-reporting bureaus, all your creditors, and your local police as soon as possible so steps can be taken to control the damage.
For more information on how to avoid being a victim of identity theft and how to recover if you do become a victim, the following sites have valuable information: consumer.gov, ftc.gov and privacyrights.org.
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