How to protect yourself from identity theft

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How to protect yourself from identity theft

Holland & Knight litigation partner Daniel S. Fridman shares the steps he gives clients who want to limit their exposure to identity theft and to begin to remedy its effects if their identities have been misused.

Daniel S. Fridman

2012-11-23 12:00:00 AM

This year, I have heard from an increasing number of clients, colleagues and family members wanting advice on how to proactively protect themselves from becoming identity theft victims. Having been through my own personal experience with identity theft last year, I learned that no matter how careful you are with your personal information, fraudsters can still find ways to obtain it. As a result, I have developed a list of steps I give clients who want to limit their exposure to identity theft and to begin to remedy its effects if their identities have been misused.

Place a credit freeze on each of the three credit reporting bureaus. A credit freeze prevents a creditor from being able to see a copy of your credit report. If a creditor cannot see your credit report, chances are they will not issue a credit card, mortgage, cell phone account or auto loan under your name. You need to visit:

• Equifax (https://www.freeze.equifax.com),

• Experian (https://www.experian.com/freeze/), and

• TransUnion (https://freeze.transunion.com).

Under Florida Statute 501.005, you can obtain a credit freeze for $10, or if you are an identity theft victim or senior citizen, for free. The downside of using a credit freeze is that the next time you apply for credit, you will need to ask the lender what credit report they check and then go online, enter your PIN and pay the $10 fee to temporarily unfreeze your credit. It is a minor inconvenience, particularly when compared to the time it takes to clean up a credit report damaged by an identity thief.

You should also get your free annual credit report (www.annualcreditreport.com) from each of the three bureaus and check it carefully for new accounts or hard credit inquiries that you do not recognize.

Place a security freeze on your ChexSystems bank account report. This is a lesser-known vulnerability, but one that can be even more costly to ignore than the credit freeze. Identity thieves open bank accounts so they can make large check deposits or deposit stolen checks and then withdraw the funds using the float the bank gives them before the check bounces. They may also purchase goods using the checks in your name and a fake identification in your name, and the merchant will come after you when the checks bounce. About 80 percent of all banks check your ChexSystems report before they will open a bank account in your name. The ChexSystems report informs banks if you have a history of overdrawing your bank account or passing bad checks. If a bank cannot see your ChexSystems report, then it is less likely to open a new account for you. You can freeze your ChexSystems report for free in Florida at www.consumerdebit.com. You can also order a free annual report from them to make sure that the bank accounts on the report are accounts that you opened yourself.

If you find that your identity has been stolen, you can take the following additional steps.

First, complete an identity theft affidavit with the Federal Trade Commission (www.ftc.gov/idtheft). Take your identity theft affidavit to your local police station and ask them to write up an identity theft police report for you. Ask them to notarize your identity theft affidavit. Your identity theft affidavit together with your police report become your official identity theft report, and it is used by the credit reporting agencies and creditors to verify your claim of identity theft.

Next, mail your identity theft report to each of the three credit reporting bureaus and request an extended fraud alert. The extended fraud alert will stay in effect for seven years and will entitle you to two free credit reports within twelve months. The credit reporting agencies are also required to take your name off of marketing lists for prescreened credit offers for five years. You can opt-out of prescreened offers yourself at www.optoutprescreen.com. This will prevent prescreened credit offers from landing in your mailbox where they can be stolen by fraudsters.

Third, go to the Internal Revenue Service website (www.irs.gov) and order your tax transcript. It will show you if someone has filed in your name. You should also file Form 14039, the IRS Identity Theft Affidavit. The IRS will send you a PIN you will need to use to file your income taxes the next year. You will receive a new PIN each year. If you have lost your wallet or had questionable credit card activity, you can still file the form, even if it has not yet impacted your tax account.

Finally, make sure you have strong passwords set up on all your online bank, investment, and credit card accounts — a combination of upper and lower case letters, numbers, and symbols. You should also call these companies and set up a unique password that one needs to give them before they will proceed with your call.

These steps will lock your identity information down to make it more difficult for someone to misuse it. Keep in mind that the people most vulnerable to the effects of identity theft are seniors and children. They are targeted because they are less likely to discover it. If you decide to implement this advice for yourself, you may want to assist the elders in your family in doing it as well.

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