Identity Theft Category
Dear Liz: I was deep in credit card debt but, because of a stroke of good fortune, came into enough money to completely pay off all my debts except my home. My house payment is now easy to make and my family is in the best financial shape we have ever been in. We even have several thousand in the bank for emergencies. After paying off the credit cards, we began receiving notices from many of the credit card companies canceling our cards or increasing the interest to astronomical rates. Each time I told my wife not to worry, because it was just one less card we had to worry about monitoring, but this trend is continuing. Recently we got a letter from a major retailer we have had an account with for over 25 years saying our credit debt was considered too risky and they were closing our account. I do not understand this because I do not have any credit card debt anymore. My question is why am I being penalized for paying off my debt or is there something I happing I do not know about?
Answer: Run, don’t walk, to your computer and point your browser to the free credit report site, www.annualcreditreport.com. (This is the only address to use; beware of fake and lookalike sites.)
You need to check your reports to see if your good name has been hijacked by an identity thief. While many issuers are closing inactive accounts and raising interest rates for broad swaths of their customers, most aren’t referring to nonexistent debt as the reason to do so.
If you discover credit accounts or collections that aren’t yours, you’ll need to file a police report and dispute the errors with the credit bureaus. The Identity Theft Resource Center at www.idtheftcenter.org has fact sheets and other helpful information to guide you through this process.
If you have been the victim of identity theft, you should at least put fraud alerts on your reports at the three bureaus and consider freezing your credit. A fraud alert signals to lenders that they need to verify the identity of anyone trying to open an account in your name, while a credit freeze would prevent the lender from accessing your credit reports, which should halt new credit accounts altogether unless you “unlock” the report in advance. Again, the Identity Theft Resource Center has more information.
If you don’t spot any obvious problems, it could be that the retailer was using outdated information. You can ask it to reconsider its decision, although most issuers are reluctant to reopen accounts once they’re closed.
If you’re concerned about further account closures, simply use one or two of your cards to make small purchases each month and pay the balances off in full. This should prevent further account closures.
So far, 25 states have passed laws allowing at least some of their residents to “freeze” their credit reports, which prevents an identity thief from opening new accounts in their names.
Here’s how it works. The consumer writes to each of the three bureaus, requesting that they freeze his or her report. Such a freeze prevents a prospective lender from viewing the consumer’s report; since most lenders won’t make a loan or open a credit account without seeing the bureau reports first, this effectively shuts down the ID thief. (The freeze doesn’t apply to the consumer’s current lenders, who can continue to peruse the consumer’s reports.)
If the consumer wants to lift or �thaw� the freeze to get credit, he or she uses a personal identification number to do so. Some states require the bureaus to comply within a specified period, typically 3 days.
Some states limit credit freezes to identity theft victims only, but most let any consumer request a freeze. The bureaus typically charge a small fee�generally around $10 each�to institute the freeze and another fee to lift it.
Here’s a list compiled by Consumers Union of the states that have passed laws, their effective dates, cost limits and where you can go for more information. (For updates and more details, please visit FinancialPrivacyNow.org, which is maintained by Consumers Union.)
California
Who: All consumers
When: Effective January 1, 2003
Cost: No fee for victims to place the freeze, others pay up to $10 per freeze; fee to lift freeze capped at $10 for temporary lifting for a time, $12 for temporary lift for one creditor.
For more information: www.privacyprotection.ca.gov
Colorado
Who: All consumers
When: Effective July 1, 2006
Cost: No fee for first freeze; $10 to place a second freeze, $10 to lift, $12 for temporarily lift for one creditor
For more information: www.ago.state.co.us
Connecticut
Who: All consumers
When: Effective January 1, 2006
Cost: $10 to place or lift, $12 to lift for one creditor only
For more information: www.ct.gov/ag/
Delaware
Who: All consumers
When: Effective October 9, 2006
Cost: $20 to place, free to temporarily lift for a period of time or specific creditor and to remove.
For more information: www.consumersunion.org/pdf/security/securityDE.pdf
Florida
Who: All consumers.
When: Effective July 1, 2006
Cost: No cost for ID theft victims (with investigative report) and seniors aged 65 years and older. For all others, $10 fee to place, temporarily lift or to remove a security freeze.
For more information:
www.consumersunion.org/pdf/security/securityFL.pdf
Hawaii
Who: ID theft victims only, with a police, investigative report or complaint filed with a law enforcement agency.
When: Effective January 1, 2007
Cost: None.
For more information: www.consumersunion.org/pdf/security/securityHI.pdf
Illinois
Who: Before January 1, 2007, only identity theft victims. After January 1, 2007, all consumers.
Cost: $10 to place, lift or remove. Free to victims with police reports and seniors 65+ years old do not pay.
When: Effective January 1, 2007
For more information: www.consumersunion.org/pdf/security/securityIL.pdf
Kansas
Who: ID theft victims only, with a police, investigative report or complaint filed with a law enforcement agency
When: Effective Jan 1, 2007
Cost: None
For more information: www.consumersunion.org/pdf/security/securityKS.pdf
Kentucky
Who: All consumers
When: Effective July 11, 2006
Cost: No cost on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued.
For more information: www.consumersunion.org/pdf/security/securityKY.pdf
Louisiana
Who: All consumers
When: Effective July 1, 2005
Cost: $10 to place, $8 to lift, no cost for ID theft victims or persons age 62 or older
For more information: www.ag.state.la.us/calerts/alert0015.aspx
Maine
Who: All consumers
When: Effective Feb. 1, 2006
Cost: No cost on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued, and $12 to lift for a specific
creditor.
For more information: www.consumersunion.org/pdf/security/securityME.pdf
Minnesota
Who: All consumers.
When: Effective August 1, 2006
Cost: No cost on ID theft victims who provide police report. Others pay $5 to place, remove, temporarily suspend, lift for specific creditor, or have PIN reissued.
For more information: www.consumersunion.org/pdf/security/securityMN.pdf
Nevada
Who: All consumers
When: Effective October 1, 2005
Cost: No fee for ID theft victims who submit a police report, for others $15 to place, $18 to lift, $20 to lift for one creditor
For more information: www.consumersunion.org/pdf/security/securityNV.pdf
New Hampshire
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims who submit a copy of a police report, investigative report, or complaint to a law enforcement agency, for others $10 to place, temporarily lift
or remove
For more information: www.consumersunion.org/pdf/security/securityNH.pdf
New Jersey
Who: All consumers
When: Effective January 1, 2006
Cost: No fee for initial freeze. Up to $5 to remove, temporarily lift or have PIN reissued.
For more information: www.njdobi.org/creditfreeze.htm
New York
Who: All consumers.
When: Effective November 1, 2006
Cost: No fees for victims. Free to place first time for everyone. After first time, or to lift temporarily or remove there is a $5 fee.
For more information: www.consumersunion.org/pdf/security/securityNY.pdf
North Carolina
Who: All consumers
When: Effective December 1, 2005
Cost: No cost for ID theft victims with valid report/complaint with law enforcement agency. For others, up to $10 to place, remove, or temporarily suspend.
For more information: www.ncdoj.com
Oklahoma
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims with investigative report and no cost for seniors 65 years +.
For more information: www.consumersunion.org/pdf/security/securityOK.pdf
Rhode Island
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims or seniors 65 years +.
For more information: www.consumersunion.org/pdf/security/securityRI.pdf
South Dakota
Who: ID theft victims with a police report
When: Effective July 1, 2006
Cost: None
For more information: www.consumersunion.org/pdf/security/securitySD.pdf
Texas
Who: ID theft victims with a police report
When: Effective September 1, 2003
Cost: One $8 fee
For more information: www.consumersunion.org/pdf/security/securityTX.pdf
Utah
Who: All consumers
When: Effective September 1, 2008
Cost: Fees must be �reasonable�
For more information: www.consumersunion.org/pdf/security/securityUT.pdf
Vermont
Who: All consumers.
When: Effective July 1, 2005
Cost: No fee for victims; $10 for all others
For more information: and www.consumersunion.org/pdf/security/securityVT.pdf
Washington
Who: ID theft victims, including persons who receive a notice of a security breach of computerized personal information
When: Effective July 24, 2005
Cost: None
For more information: www.atg.wa.gov
Wisconsin
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for victims. Up to $10 for others to place, thaw or remove freeze.
For more information: www.consumersunion.org/pdf/security/securityWI.pdf
How long the states will be able to offer this solution to their residents is uncertain. Some in Congress want a single federal standard for credit freezes that would pre-empt state laws. The problem with federal legislation is that it’s usually less consumer-friendly than
Dear Liz: My sister, who is a 29-year-old single mother of three children, has committed identity theft by taking out loans and credit cards using my mother’s name. Her total debt is $30,000.
My parents are torn about what to do. I feel that she needs to be turned in so that they don’t have to pay this debt themselves, using their retirement money to do so.
They are concerned for the kids, but I feel that she needs to learn a lesson and that the family can take care of the kids. My sister suffers from bipolar disorder. I’m not sure what she would do if my parents turn her in.
Answer: If your mother lives in California or one of the other states that allows credit freezes, she should put one in place immediately — as should you and the rest of your family.
A credit freeze prevents anyone from opening credit accounts in your name, and is a much stronger protection than the fraud alerts that credit bureaus typically recommend.
A family member who has stolen one person’s identity could well steal the identities of others, because she probably knows the essential details — names, Social Security numbers, dates of birth and addresses — that would allow her to commit more of these crimes.
You seem to understand that to avoid responsibility for this debt, your mother almost certainly will need to file a police report, which means your sister could be prosecuted and sent to jail.
Occasionally lenders will let a victim off the hook without such a report if the thief admits the deed, commits to making payments and has the means to do so, said Linda Foley. She is co-founder of San Diego’s Identity Theft Resource Center, which helps victims of this kind of fraud.
The family typically needs to hire a lawyer to conduct such negotiations and draw up the necessary paperwork, Foley said.
It doesn’t sound like your sister’s a great candidate for this kind of deal, however, unless she’s gotten her act more together than your letter would indicate.
Your best move now, after recommending credit freezes for your family members, is to point your parents to the Identity Theft Resource Center, which has resources for victims of familial identity theft. Then back off. This is your parents’ decision to make.
Dear Liz: Do dead people have to worry about identity theft?
I ask because I’m dealing with all of the papers that my recently deceased husband left behind, including canceled checks and statements going back to the 1970s, as well as all the pay stubs from his entire working career.
He also had a bunch of paperwork from his deceased parents. Do I have to shred his parents’ stuff? Or can I just throw it into the recycle bin?
In addition, my husband had a lot of annuities and 457 deferred compensation plans, which were converted to additional service credit on his pension or rolled over into IRAs before he died. Can I shred the statements for those? They go back 20 years! Can I shred most of those old canceled checks? All of the pay stubs? The really old tax returns? Help!
Answer: First of all, condolences on your loss. And I’m especially sorry you have to sort through such a mound of paperwork while you grieve.
There are, indeed, scam artists who target the identities of the recently deceased. That’s one of the reasons it’s important for the executor of an estate to inform all the deceased person’s creditors of the death.
Typically, that information is then relayed by the creditors to the credit bureaus. The bureaus also consult a death list maintained by the Social Security Administration, although it often takes a few months for a name to show up on that list.
In any case, you’ll probably want to pull your husband’s credit reports from the three bureaus (Equifax, Experian and TransUnion) to see whether he’s properly listed as deceased; if not, request that the notation be added.
Most of the time, being listed as dead will shut off opportunities for identity theft as many people who’ve been incorrectly listed this way will attest. (Some people have found themselves with “deceased” notations on their credit reports after a joint account-holder died and the creditors reported the information incorrectly to the bureaus.)
But you still want to be careful about handling any paperwork that has private personal information on it. When in doubt, shred.
Given the amount of paperwork you need to process, you might consider hiring a professional shredding service that can come to your house and zip through your piles in a matter of minutes. (A local accountant, bank or mortgage lender may be able to provide you a referral.)
For guidance on what you need to keep, I consulted John W. Roth, senior federal tax analyst for tax research firm CCH Inc.
“Generally speaking, all the [canceled] checks can be shredded except for those that are needed to substantiate deductions on their tax returns for the last three years,” Roth said. “Keep the W-2 and 1099 statements that relate to the last three years of tax returns.”
Roth recommends you hang on to older tax returns as well, although you can shred any accompanying documentation. You may need to keep the annuity and 457 paperwork as well, since those can help establish how much of his (and now your) retirement benefits are taxable. Consult a tax pro for details.
You also might want to consult a professional in this case an estate planning attorney about whether to keep any of your in-laws’ documents.
Finally, consider whether you plan to apply for Social Security someday based on your husband’s earnings. If so, you’ll want to make sure his earnings were properly recorded with Social Security before shredding the pay stubs.
This doesn’t have to be an onerous task; just check the earnings record in his latest Social Security benefit statement, the one that every worker receives annually. If you see any problems, such as a year in which he worked but wasn’t credited with any earnings, you can dig out the pay stubs from the appropriate year to correct the record with the Social Security Administration.
Q: My stepson is a victim of identity theft. Are there any government agencies or other organizations that he might contact for help?
A: The only good thing about the identity theft epidemic — the Federal Trade Commission estimates 9.9 million victims in 2003 alone — is that plenty of resources have sprung up to help the victims.
Your stepson still has a lot of work ahead of him. He can turn to others for education and information, but he’s the one who will need to contact the credit bureaus, file a police report and take the other steps necessary to clear his name.
He can’t expect anyone else to do the work for him, and he’ll be lucky if any official investigation is conducted. Most police departments place a pretty low priority on identity crimes, and research firm Gartner has estimated that the thieves face only a 1-in-700 chance of being caught.
But your stepson can limit the damage. He can get information from the FTC by visiting its consumer website at www.consumer.gov/idtheft/ or by calling (877) FTC-HELP (382-4357). Make sure he gets a copy of the FTC’s “ID Theft: When Bad Things Happen to Your Good Name.”
He also can check out the Identity Theft Resource Center, a nonprofit organization that recently won a National Crime Victim Service Award from the Department of Justice. Your stepson can visit its website at http://www.idtheftcenter.org or call the center at (858) 693-7935.