There have been dozens of reports of computer hackers breaking into corporate databases and stealing personal information on millions of individuals.  The 2017 Equifax breach was very troubling because Equifax is a credit bureau, the large number of people affected and the type of information that was taken.  It is estimated that over 140 million people could have had some information stolen.  That information may have included name, address, birth date, Social Security number, driver license number and credit card data.  Over the past few years, other data breaches have occurred at internet service providers, department stores and health insurance companies.

It is frightening to consider that criminals may try to infiltrate your personal computer but also the large data bases of companies that have your personal information as well.  Companies constantly try to make their information more secure and individuals should as well.

Start protecting yourself by reviewing your own credit report.  Federal law requires that each of the three large credit bureaus provide a free report annually if you ask for it.  You can request these reports from www.annualcreditreport.com.  Review the reports carefully to make sure your information is correct.  If you see something that is wrong, contact the company that is listed and the credit bureau that issued the report.

What are the risks?

There are several ways you can have problems when someone has your personal information.  Some involve the potential for monetary loss, some can result in major headaches in rectifying them and some can just be a minor nuisance.

Theft of a credit card

If someone has your credit card or your credit card number, they may use that number to charge a purchase.  The Fair Credit Billing Act of 1975 limits your actual liability to $50 for the unauthorized use of your credit card.  If just your credit card number was stolen, there is no liability.

It is essential that you notify your credit card company immediately if you see a transaction on your credit card statement that you did not initiate.

Theft of an ATM or debit card

The unauthorized use of your ATM or debit card can be more troublesome and the rules are different.  The Electronic Fund Transfer Act of 1978 limits your liability depending on when you report the loss or theft of your card.  There is no liability if notification is made before any unauthorized charges.  There is a $50 limitation on your liability if notification is made within two days of learning of the card’s loss.  There is up to a $500 liability if you report the card’s loss after two days but less than 60 days after a statement is sent to you.  If you report a loss or stolen card after 60 days, there is no limit on your potential liability.  If just your ATM or debit card number was lost or stolen, there is no liability.

Just like with a credit card, it is essential that you review your ATM and debit card statements immediately when you receive them and notify the card’s issuer if you see something unusual.  What makes the loss of an ATM or debit card more frightening is that with that card, someone could access any other account that is linked to your debit account.

Your stolen identity is used to borrow money

With enough of your personal information, a criminal may try to borrow money in your name and leave you with the bill.  If they are successful in borrowing, this can be a major problem.  You will ultimately not be responsible for the debt because you did not create it, but the time and effort to get the situation corrected can be significant.  The US Federal Trade Commission website – www.identitytheft.gov – can be helpful if you find that this has happened to you.

Considering the recent thefts of personal information mentioned above, you may want to consider placing a credit freeze (sometimes called a security freeze) with the major credit bureaus.  Most lenders will request information from a credit bureau before extending a new loan and if they cannot get the information, they are far less likely to provide the loan.  A credit freeze blocks the credit bureau from releasing your information to anyone other than existing creditors.  A credit freeze can prevent a thief from borrowing in your name, but it also blocks access to your credit bureau information for legitimate purposes.  If you are getting a new credit card, loan, mortgage or even a new cell phone account, the lender will need your information.

To place a credit freeze, you must contact each of the credit bureaus.  You will need to supply some personal information and there may be a fee that can range from $5 to $10.

Once the credit bureau places the freeze, you will get a PIN number or password.  Keep the number or password safe because you will need it to lift the freeze.  There may also be a fee to lift the freeze.  A credit freeze generally lasts until it is removed, but freezes in Kentucky, Pennsylvania and South Dakota last seven years.

A fraud alert is a different tool that makes it harder for an identity thief to open accounts in your name.  A fraud alert allows creditors to get a copy of your credit report if they verify your identity.  An initial fraud alert lasts 90 days and is free.  For victims of identity theft, an extended fraud alert can be placed that will last for seven years.

To place a fraud alert on your credit reports, contact one of the credit bureaus and they will tell the other credit bureaus to place an alert on their versions of your credit report.

Conclusions

Identity theft is a serious and growing problem that will probably continue to grow.  Cyber criminals are smart and can be relentless trying to find access to your information.  Protecting against identity theft is almost impossible as personal information is increasingly stored and accessed electronically.  It is only truly as secure as the weakest place where it exists.

While total protection may be impossible, there are steps you can take to reduce the chances of being a victim and minimize any financial loss or the headaches of after a theft has occurred.

  • Use www.annualcreditreport.com to review your credit reports annually and follow up on anything that looks suspicious.
  • You should review the statements from your credit, ATM and debit cards immediately when you receive them.  If you see any unauthorized activity, contact the issuing company immediately.
  • Consider using a fraud alert if you are extremely uncomfortable but remember the alert only lasts for 90 days.
  • A credit freeze may be most effective but remember there are fees and you must place the credit freezes with all the credit bureaus.  You must also “unfreeze” your records if or when you are applying for new borrowing or credit.
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