Credit Reports: Your First Line of Defense Against Identity Theft
Identity theft is the stealing of a victim's personal information to commit a crime such as making fraudulent charges on a cell phone or credit card. It is the nation's fastest growing financial crime and it can happen to anyone. An estimated 27.3 million Americans have been victims of identity theft in the last five years, according to the Federal Trade Commission. Someone's identity is stolen every 75 seconds.
Identity thieves use a variety of methods to gain access to a victim's personal information. They include: rummaging through trash, stealing wallets and purses containing identification, stealing mail, and stealing personal information from a victim's home. Identity theft is typically not a stand-alone crime but, rather, part of a larger criminal act, such as credit card fraud or cellular phone service fraud. In other words, it is usually the means to a fraudulent end.
Identity theft often goes undetected for months, allowing fraudsters the luxury of time to commit their crimes. It takes 14 months, on average, between the time that information is stolen and when a victim discovers the theft. One reason is that fraudsters often use change of address forms or fraudulent addresses to divert a victim's mail (e.g., credit card bills) to another location.
A 2003 Federal Trade Commission survey found that 52% of all identity theft victims discovered the crime by monitoring their accounts. Another 26% were alerted to suspicious account activity by companies they do business with. Eight percent reported that they learned they were victims by being turned down for credit.
In 2003, Rutgers Cooperative Extension introduced an online Identity Theft Risk Assessment Quiz, which is available at www.rce.rutgers.edu/money/identitytheft. In an initial analysis of nonrandom responses to the Identity Theft Risk Assessment Quiz, data were collected from 105 respondents in 31 states during the first half of 2003.
A key finding from the study was that checking a credit report for evidence of identity theft was the least frequently reported practice by this sample. Thus, many people are not taking advantage of a valuable resource for limiting the amount of damage that an identity thief can cause. Regular credit report checks can alert victims to the fact that their identity has been stolen more quickly than if they don't check their reports. According to the Federal Trade Commission, the cost of an incident of identity theft is significantly reduced if the misuse of a victim's personal information is discovered quickly.
So how do consumers check for identity theft with their credit file? Follow these easy steps:
· Download a Credit File Request Form from the "Resources" section of the Rutgers Cooperative Extension Web site: www.rce.rutgers.edu/money2000. A free credit report is available each year to New Jersey residents, upon request, from each of the three major credit bureaus, Experian, Equifax, and TransUnion.
· Call the credit bureaus to obtain your report or send the Credit File Request Form and order it by mail. The contact numbers to request a credit report are 888-397-3742 for Experian; 800-685-1111 for Equifax; and 800-888-4213 for TransUnion.
· Review your credit file carefully and report errors and suspicious accounts promptly and in writing. Special forms are generally provided with credit reports to correct erroneous information. If identity theft is suspected, also call the credit bureaus immediately on special phone numbers set up to receive reports about fraud. Request that a fraud alert be placed on your account so merchants do not grant new credit without checking with you first.