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November 26, 2009

Protect yourself from identity theft

Imagine this: Last February, I woke up one morning with that sudden feeling that something was not right that day. My car would not start. Invaded by frustration, I decided it was time to get a new vehicle.

Shortly after, my new car was staring at me from the lot. The papers were ready to sign pending a phone call to the local bank.

"Mr. Perez, I am afraid we cannot finance this deal and neither will any bank," the rep said. Apparently, "you have bought a new house and two brand new cars in the last two years in Colorado," he proceeded to tell me.

Needless to say, that "Mr. Perez" had stolen my identity.

In the past few years, identity theft has become a familiar name in the criminal repertoire. The idea is fairly simple: You get ahold of someone's form of identity (Social Security number, bank account number, or credit card) and use it to open accounts, withdraw money or make purchases online.

Since many people do not check their credit history very often, these crimes sometimes go unnoticed for years until you decide to make a purchase or apply for a loan. In the meantime, a person using your name is purchasing goods or obtaining loans that will go unpaid, therefore, affecting your credit for a long time. Identity theft has finally caught the government's attention.

The Federal Trade Commission has started a campaign based on the slogan "Deter, Detect and Defend" to help the public avoid the catastrophic consequences of this increasingly popular crime.

First of all, you have to identify the potential sources of identity data. Social Security numbers, trash and online transactions are the most common methods. Keeping your Social Security card safeguarded, shredding all personal documents, and purchasing online at trusted sites only are basic measures.

A quick note: Do not ever give your Social Security number or passwords when you receive a call or an e-mail. The reason: Banks do not make calls or send e-mails asking for this type of information. This form of obtaining your personal information is called phishing.

If you have been a victim of phishing or any other form of suspicious activity, just order a credit report and review all of your accounts to make sure they are accurate.

And to be more proactive, you could set up a fraud alert associated with your credit report. According to the FTC, you can order your free annual report at www.annualcreditreport.com or call toll-free 877-322-8228.

Finally, if you already have been victimized, you should close the affected accounts, file a complaint with the FTC and file a report with the local police. Unfortunately, solving identity theft crimes takes time and effort. Thus, efforts should be geared towards deterring these crimes.

Remember Mr. Perez trying to buy that new vehicle? Start today and take control of your identity because you do not want somebody else out there spending your money and ruining your financial future while using your name.

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