Pop Quiz. True or False. (Answers in the article)
1) 70% of Identity Theft is related to credit cards.
2) Identity Theft can cause injury or death to its victim.
3) Identity Theft can absolutely be prevented.
Thanks to cute commercials, most people think of identity theft as a financial nuisance that can be prevented with credit monitoring. Nothing could be further from the truth.
Credit monitoring is definitely an important facet of ID theft prevention. But it is not foolproof. It is only helpful in certain types of financial matters, and then only when changes are reported to credit repositories in a reasonable time. There are also numerous private data services like Choice Point and Lexis Nexis that sell our information left and right. It’s big business, and does not show up in credit monitoring.
In addition, ID theft can involve other areas of our lives, such as our driver’s identity, medical records, social security and tax identity, and even create a criminal record.
The best defense is self-vigilance. And even that isn’t foolproof.
You can (and should) check all your accounts line by line for fraudulent charges and report discrepancies immediately. This includes your medical records, insurance Explanation of Benefits statements and your Social Security Estimate of Benefits statements.
You can (and should) use a cross-cut shredder to destroy any unnecessary documents with personal information on them. This includes credit card offers as well as old credit cards, CDs and DVDs.
You can (and should) protect your computers from hackers with a suite of products that work together to keep your information secure.
You can (and should) follow many other steps to protect your personal information.
You can take all possible measures, but you can’t stop data that is out of your control from being lost or misused. This data might with your doctor, your insurance agent, your bank, the car dealership, the IRS, retailers, and so on.
According to the Identity Theft Resource Center, there were 448 reported data breaches in 2007, up from 315 in 2006 and 158 in 2005. So far, through May 25, 2008, there have already been 155. Do the math. We’re on pace for another new record (665). The breaches take place in businesses, medical facilities, government/military organizations, educational institutions, and banking/financial/credit institutions.
Last year over 127 million records were potentially exposed to harm by hackers, lost laptops, stolen back-up tapes, missing papers, and/or dishonest employees. That number does not include figures in breaches where the exact number of identities is unknown.
Unfortunately, no matter how vigilant one is, identity theft cannot be fully prevented. There is just too much information floating around.
Don't Underestimate the Effects of Identity Theft
Identity theft can lead to serious consequences that you may learn about at the worst possible times.
Imagine you are out driving on a Sunday with your family and are stopped by an officer because you were traveling a few miles over the posted limit. The officer is only going to warn you to slow down if your driving record is clean, which you know is true. Upon checking your record he finds there is a warrant for your arrest for skipping a DUI trial. What do you think happens next?
Consider these other situations:
What happens to the person who applies for a job and is told they already work there? Or at least their social security number does. Who owes the taxes? Who gets the social security?
What happens to the woman in a hospital receiving improper treatment because an identity thief infected her medical records during a visit of their own? The consequences could be serious, even fatal.
What happens to the person who is detained at an airport because a felony was committed in their name? What if that felony was murder?
Fixing the Problem Can Be a Nightmare
For some, with simple ID theft situations caught promptly, a few phone calls and a letter or two may quickly resolve the issue with just a few hours inconvenience and worry.
For many unlucky others, it may take hundreds of frustrating hours dealing with many government agencies and clearing their name from numerous databases. This stressful process can go on for years and sometimes the problems recur. Many victims lose a lot of time from work in the process.
Laws such as the Fair Credit Reporting Act (FCRA), and the Fair and Accurate Credit Transactions Acts (FACTA) prescribe the rights and responsibilities of consumers and businesses for account fraud and many financial ID theft issues.
However, victims who need to unravel more complicated financial cases, or clear their name from criminal databases, can find the process to be a nightmare.
As for medical records, correcting the inaccuracies has no set procedure. Additionally, many record keepers may fear the Health Insurance Portability and Accountability Act (HIPAA) and be reluctant to show you your own records if you allege they contain the information of others as well. Some states even prohibit the changing of medical records by the rightful patient under any circumstance.
What Are the Remedies?
ID Theft Insurance is one product that seems to be popular, probably because it is so inexpensive. It’s included in many homeowners’ policies. There are several drawbacks. It pays only approved expenses you incur repairing the problem, not the financial losses. Your claim is at the mercy of an underwriter. It leaves the actual task of repairing the damage to your name up to you.
Credit Monitoring, as mentioned earlier, is a valuable tool within its limitations. It still may not detect all financial issues, and has no bearing on the other four areas of ID theft. It also does not repair any of the damage to your name.
Resolution Services are somewhat helpful, but mainly, they send you a stack of papers and provide advice about filling them out. You still do the legwork.
Restoration Services provide licensed investigators to perform most of the tasks involved in restoring your identity to where it was before it was stolen. The best ones also proactively search criminal, driver’s license, medical, and other databases for problems. Look for a plan that is flexible enough to adapt as the face of identity theft continues to evolve.
Attorney Services are important to read and explain documents you receive, consult with you about your rights and remedies, and write letters or make phone calls on your behalf. Having an attorney you can call at any time, day or night will be handy if you are stopped by law enforcement, who then discovers that surprise bench warrant with your name on it.
Summary
There are many steps we can take to minimize our exposure to ID Theft. Watch for more articles with tips and news to help you protect yourself.
However, the sad truth is- too much of our information is in the hands of others, out of our control. Since the number of data breaches continues to grow so quickly, it is reasonable to expect that ID theft will continue to be a problem for a long time to come. So, while we take the proactive steps we can, we should also be prepared proactively for the real possibility of being an ID theft victim.
A suite of products providing credit monitoring, attorney services (including 24/7 emergency issues) and managed (not assisted) identity restoration is the best addition to self-vigilance.
As in any developing market, ID Theft protection products include some services of a rather dubious value, from companies just trying to turn a quick profit. So, buyer beware! Check out the companies and their services thoroughly. Look for experience and longevity. Be sure they have the expertise to carry out their claims.
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