So You Think You’re The Victim Of Identity Theft… Now What?
With so many purchases being made online these days — and with more people using credit cards to buy things at retail locations — it’s surprising we don’t hear about massive data breaches every day. But alas, ID theft is an all-too-frequent occurrence, so it couldn’t hurt to know in advance the steps to take to minimize the damage.
The folks at the Federal Trade Commission have created a comprehensive guide called Taking Back: What to do if your identity is stolen [here’s the PDF] that not only provides detailed information but also sample letters, forms and contact info for various private and federal agencies.
But here are the basics everyone should know…
IF YOU KNOW YOUR IDENTITY HAS BEEN COMPROMISED:
1. Place a fraud alert on your credit reports, and review your credit reports.
Contact any of the three consumer reporting companies (TransUnion: 1-800-680-7289; Equifax: 1-800-525-6285; Experian: 1-888-EXPERIAN (397-3742)) to place a fraud alert on your credit report.
“You only need to contact one of the three companies to place an alert,” writes the FTC. “The company you call is required to contact the other two, which will place an alert on their versions of your report, too. If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.”
The fraud report entitles you to one free copy of your credit report from each bureau. Check those reports for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.
If you find fraudulent or inaccurate information, get it removed.
2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
Call each company with whom you have a possibly compromised account and speak to someone in the security or fraud department. Follow up in writing, and include copies (NOT originals) of supporting documents.
“It’s important to notify credit card companies and banks in writing,” says the FTC. “Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures.”
If the identity thief has made charges or debits on your accounts, or has fraudulently opened accounts, ask the company for the forms to dispute those transactions.
Once you have resolved the dispute with the company, request a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts.
3. File a complaint with the Federal Trade Commission.
You can file a complaint with the FTC using the online complaint form; or call the FTC’s Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. Be sure to call the Hotline to update your complaint if you have any additional information or problems.
Sharing your identity theft complaint with the FTC can help law enforcement track down identity thieves. The FTC can refer victims’ complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces.
4. File a report with your local police or the police in the community where the identity theft took place.
Call your local police department and tell them that you want to file a report about your identity theft. Ask them if you can file the report in person. If you cannot, ask if you can file a report over the Internet or telephone.
If the police are reluctant to take your report, ask to file a “Miscellaneous Incident” report, or try another jurisdiction, like your state police. You also can check with your state Attorney General’s office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
The FTC has also created its own website dedicated to providing information for victims of ID theft. It’s one of those sites you should probably have bookmarked — but hope you never have to look at.
5 Important Lessons about Credit that Most People Learn the Hard Way
By Kris Bickell, on February 19, 2012
Years ago I had a co-worker who had a saying: credit cards don’t come with instructions! How true. On the one hand having a credit card makes buying so easy. Just hand over your card, and worry about paying later. No need to carry cash. No need to carry around your checkbook. No need to even visit a store in person. What could be easier? But on the other hand, having credit also makes it so easy to spend more than you can afford — and get quickly overwhelmed with debt!
Sadly, many people don’t learn about credit until they get their first credit card. They usually don’t learn this type of financial information in school. And they often don’t learn it from their parents either. Sure, they might hear the warnings about only buying what you can afford, saving for the future, and managing your money wisely. But like many lessons in life, we don’t learn how credit works until we experience it for ourselves.
Not that learning lessons first-hand is bad. But when it comes to credit cards, the truth is that avoiding debt problems is much, much easier than dealing with them!
5 Credit Lessons
So, here are 5 credit lessons that most people learn the hard way. No matter how good or bad your financial picture is right now, it’s never too late to learn how to avoid some of problems that come with credit:
1. Getting Credit is Easy at the Beginning
When you are young and just starting out as an adult, getting credit is often quite easy. Back when I was in college I got an American Express credit card BEFORE I graduated — which means before I got a job and started making money. Why would any bank give a college kid credit? Because they knew I would soon get a job and they wanted me as a customer before I knew better. I knew this was a big responsibility, but I should have never applied for the card until I was really ready.
2. The Banks Keep Giving You Credit Even When They Probably Should Not
In a perfect world, the banks would be able to see that you are getting yourself into debt and not keep giving you more credit. But as long as you are making enough money, and as long as you are paying on time, you mean one thing to the banks — profit! So they’ll keep approving you for more and more credit, until one day you’re in over your head. Of course, this is not their fault — it’s your fault for not taking care of yourself. But it is still a hard lesson to learn that the banks don’t care about how much debt you have, they only care about how much money they can make from you.
3. You Control Your Credit
Not the banks. Not the stores. Not your employer. So stop blaming others for your financial problems, and take control. Set a goal. Make a commitment. Write out a plan, then follow it until you achieve your goal.
4. You Don’t Have to Live with Bad Credit Forever (or Even 7 Years).
Typically bad credit — such as late payments, being over your credit limit, accounts that go into collections, and debt settlements — will remain on your credit for 7 years. But there are ways to repair your credit and get the bad credit removed, and you can do it legally and ethically. Just get a good credit repair manual, and follow the instructions. It takes some time and effort, but you can usually get quite a few negative items removed, and improve your credit score.
5. For Many People “Perfect Credit” is an Illusion.
Quote often people will say “I have so much debt I can’t pay it but I don’t want to do anything to ruin my perfect credit.” Well, perfect credit means more than just paying on time. It means not having so much debt you can’t afford to pay for regular living expenses. It means realizing that if you can’t pay, then you shouldn’t be using credit anyway. So this idea of perfect credit just because you pay in time is really just an illusion.
And one final tip — if you end up getting into trouble with too much debt or end up damaging your credit, don’t panic. There are legitimate ways to get out of debt and fix credit problems. But there are no “secrets” that will help you fix either overnight. So don’t fall victim to one of those companies or experts you see on late night TV. If it sounds too good to be true, then it usually is. Consider that bonus lesson #6!
7 ways to protect your credit rating during unemployment
Losing a job is bad enough, so minimize the damage to your credit By Jodi Helmer
In the midst of polishing your resume, scouring job boards and meeting with recruiters, it’s easy to stop paying attention to your credit score.
But taking steps to protect your credit during a period of unemployment will make it easier to recover from the financial setback and may even help you land a job.
For one thing, even if you’re not looking at your score, your prospective employer may. In 2010, 60 percent of members of The Society for Human Resource Management ran credit checks on at least some potential hires, up from 25 percent in 1998.
Experts suggest you follow these seven tips to safeguard your credit score if you’re unemployed, or if your job situation is shaky:
1. Consider payment protection: In exchange for a fee, payment protection insurance puts your payments on hold for a predetermined period of time. It’s offered on debts such as credit card balances, car loans and even mortgages.
“You won’t qualify for payment protection after you lose your job, so research the options now,” advises Rodney Anderson, author of “Credit 911: Secrets and Strategies to Saving Your Financial Life.”
Read the fine print so you know exactly what protection you’re getting and how much it costs.
2. Request a credit report: Before you send out resumes or schedule interviews, order a copy of your credit report from each of the three major credit bureaus. You’re entitled by law to one free one per year if you get them through AnnualCreditReport.com .
“Knowing the details of your credit report can help you explain any possible red flags during an interview,” says Anderson.
According to the Fair Credit Reporting Act, you’re also entitled to a free credit report if you are unemployed and searching for work.
If there is something in error on your credit report, you can have it corrected. Or if there is something accurate but possibly damaging to your chances of finding a job, the three major credit bureaus — TransUnion, Equifax and Experian — allow you to write a 100-word letter, explaining the circumstances to anyone who requests your report.
3. Stick to cash: Without a regular paycheck, it can be tempting to charge everything from groceries to a new interview suit with plans to pay the balance later.
“If you pay with cash, you tend to be more disciplined about how much you’re spending,” explains Deborah McNaughton, president of Professional Credit Counselors Inc. and author of “The Essential Credit Repair Handbook.”
The other benefit to using cash to cover expenses: It ensures you have available credit in case of an emergency.
Just be sure the bills in your wallet did not come from a cash advance on your credit card. Cash advances come with additional fees and higher interest rates, which are charged beginning the instant you take the cash.
4. Meet the minimum: When your credit card bill comes in the mail, focus on making the minimum payment, not paying down the overall balance.
“You need to maintain your cash reserves,” says Leslie Linfield, executive director of the Institute for Financial Literacy. “Now is not the time to try to pay off your credit card balances.”
Make sure to make minimum payments on time. Some credit card issuers will report even slightly late payments to the credit bureaus, which will hurt your credit score.
“Depending on your score, one 30-day late payment can drop your score as much as 100 points,” adds Anderson.
You can resume your goal of paying off credit card debt after you land a new job.
5. Communicate with creditors: If you’re having trouble making your monthly payments, pick up the phone.
Linfield suggests calling creditors to find out about financial hardship programs. Often, creditors will agree to lower interest rates or set up more affordable payment plans.
“Creditors want to work with you,” she says. “They have programs you will never know about unless you call.”
Don’t be embarrassed to admit that you are struggling to pay your bills. Linfield notes that in a time of chronic unemployment, creditors receive these calls all the time.
Making the call before your accounts go into collections is essential for safeguarding your credit score.
“Once your account is turned over to collections, your credit score will take a huge hit,” she says.
6. Defer debts: The easiest debts to defer during a period of unemployment are student loans. Call your lender and ask for an “economic hardship” deferment, which allows you to postpone payments and stops interest from accruing on the principal while you’re unemployed.
“If you have been unemployed for at least 30 days, start the deferment process,” says Linfield.
Linfield is quick to point out that deferment has no impact on your credit score because deferred debt is not reported to credit bureaus as missed or late payments.
You may also be able to defer your mortgage or car payment for 30 to 90 days, giving you a bit of breathing room if things are tight. Call your lender to ask about your options.
7. Stop shopping for credit: When you lose your job, it might be tempting to apply for new credit cards to ensure you have as much available credit as possible in case of emergency. Anderson cautions against this approach.
“The chances of getting approved for a credit card when you’re unemployed are not very good and every inquiry [on your credit report] can ding your score,” he explains.
Applying for additional credit cards also increases the likelihood you’ll accrue more debt and be unable to afford the payments when the bills come in.
Following the tips won’t ease the pain of unemployment, experts say, but they will keep trouble from infiltrating into another area of your financial llife.
Stop Identity Theft so You’re Not the Next Victim
Identity theft can happen quickly but the damage that is left for the victim to clean up is rarely dealt with as fast. Identity theft can happen in a variety of ways with thieves looking to steal debit and credit card information and Social Security numbers. With this information thieves can ruin excellent credit scores, apply for mortgages and even file false medical claims. However, there are ways in which you can prevent identity theft and take action if it happens to you.
Avoiding Theft:
One prevention method is to constantly be checking your bank statements. By keeping tabs on what is being charged or withdrawn, you could easily point out a faulty charge if a thief ever tried to use your account to their benefit. Also, by consistently checking your bank statements it’s easier to freeze the account and maybe receive a refund on any faulty charges rather than having to cancel it altogether. Next, review your credit reports. The three main credit agencies, Equifax, TransUnion and Experian, are required to give you a copy of your credit report, if requested, by law once a year. Another great tip is to use your credit card for online purchases. This is a somewhat safer route because it is not directly linked to your checking and savings accounts like your debit card. Other important and basic prevention tips include shredding documents with personal information and never carrying your Social Security card in your wallet. In addition, be wary of the information you give out online and change your passwords every couple of months.
What if you find that you’ve become a victim?:
First, try not to panic and calmly go over how you were robbed and what account the thief has access to. Was it a faulty charge on your debit or credit card? If so, notify your bank or credit card provider immediately. Let them know the amount of the charge and when it occurred and ask them to freeze your accounts. Next, you will need to notify the one of the three major credit agencies listed above so they can put out a fraud alert. The alert will remain on your credit report for 90 days and the agency will automatically issue you a free updated report. Once you receive the updated report, review it thoroughly for any suspicious activities such as accounts that you didn’t open. Make a report with your local police department and with the Federal Trade Commission. Once the various reports are made, as with other important documents, make copies and file them away in a safe place.
If you experience identity theft in a larger scale there are other steps you may need to take and there is even a way to put out an extended fraud alert that can last up to seven years. In the meantime, be sure to always use the internet wisely and protect your information. In addition, if a scanning device at a gas pump or ATM looks odd or that it may have been tampered with make sure to let the manager or an employee at the establishment know.
If it comes to the point where your identity theft has caused you to go into debt, call the counselors at Debt Helper and ask about the different services they offer that may help lower your debt.
Source:
The New York Times
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FTC Seeks Comment on Proposals to Amend “Free Credit Report” Rule
Written by: Andrew Bernstein
As I present Financial Literacy Awareness Seminars in South Florida, one of the topics I cover is “How to Obtain Your Free Credit Report.” Almost everyone present at each seminar shouts out a few different answers based on what they have seen on television. This generally brings me to a boil. Almost all of these folks never see or hear “THE FINE PRINT” in those advertisements.
I make very sure that each participant is supplied with the correct information on obtaining a free credit report.
NOW the Federal Trade Commission has taken action, for that, I applaud them. The information appears below and it’s important for everyone to know.
FTC Seeks Comment on Proposals to Amend “Free Credit Report” Rule
The Federal Trade Commission is seeking public comment on proposed amendments to the Free Annual File Disclosures Rule, also known as the “Free Credit Report Rule.” The proposed amendments would implement a new law designed to prevent consumer confusion in advertisements for “free credit reports” The amendments also would address certain practices that may interfere with a consumer’s ability to obtain the credit report that credit reporting agencies must provide for free under federal law.
The Credit Card Act of 2009 requires the Commission to issue a rule by February 22, 2010 to prevent deceptive marketing of “free credit reports.” Specifically the Act requires that certain advertisements for “free credit reports” include prominent disclosures designed to prevent consumers from confusing these “free” offers with the federally mandated free annual credit reports available through the “centralized source,” which is AnnualCreditReport.com or 877-322-8228.
To implement this directive, the Commission is proposing disclosures for television, radio, print, internet, and other media in which “free credit report” advertising may occur, along with requirements to ensure that the disclosures are sufficiently prominent. For example, for any internet site offering free credit reports, the Commission proposed a requirement that, before the consumer may obtain a credit report from that website, such site must display a separate landing page with the required disclosure: “This is not the free credit report provided by Federal law. To get your free report, visit http://www.AnnualCreditReport.com orcall 877-322-8228.
In addition the Commission is proposing to amend the Free Annual File Disclosures Rule to restrict practices that may confuse or mislead consumers as they attempt to obtain their free credit reports through the centralized source. For example, consumers are subjected to substantial amounts of advertising from the nationwide consumer reporting agencies as the attempt to obtain their free annual credit reports. The Commission has received consumer complaints about promotions for products and services that confuse and frustrate consumers as they attempt to obtain their free credit reports. The Commission proposes to amend the Rule by delaying such advertising until after the consumer obtain their free annual credit reports, and by requiring other measures.
For more information you can contact http://www.FTC.gov