Identity theft or the prospect of it, is a subject which leaves us all perplexed and fearful. Here follows two simple methods to take control and prevent this sort of crime.
First, and most important, get in the habit of getting your free credit reports. There are three major credit bureaus in the U.S., Experian, Equifax and Trans Union. Each one will give you a free credit report every year. I recommend that you schedule yourself for a credit report every 4 months and rotate between the three bureaus, e.g., on January 1, use Experian, on May 1, use Equifax, and on September 1, utilize Trans Union. Using this method of caution, you will know within four months if someone opens a credit account in your name.
According to the Federal Trade Commission, the only authorized site for this service is www.annualcreditreport.com. You may call them at 877-322-8228, or go to www.ftc.gov, print out their “Annual Credit Report Request Form” and mail it to the appropriate bureau (remember to rotate). There are credit monitoring services which charge up to $10 per month for this service, sending you alerts every time there is a change to your credit profile. Utilize the method which provides you with the best sense of security.
More extreme measures are sometimes called for, in which case, you can do a “credit freeze.” This means that you “lock” your credit profile - only you can unlock it; no unauthorized person can open a credit account in your name. (The State of California allows this, but not all states do.)
The procedure depends on whether this is a preventive measure, or if you have been “identitythieved” recently. If you have been a victim of identity theft, the credit freezes are free if you obtain a police report. If preventive, this will cost. There is a fact sheet which lists information on all three bureaus at www.catchteam.org/docs/security_freeze.pdf or, you can call our office for a free copy. After a credit freeze is in place, you can remove it completely, or for a single credit request.
Identity theft and your taxes. There are two situations where an identity thief can cause trouble with your income tax. First, is a thief using a stolen Social Security Number to file a fraudulent return and obtain a refund. Second, is the use of your SSN by an undocumented alien in order to obtain a job, thereby generating W-2s that you are unaware of.
In such cases, when you file your return, you will receive a notice from the IRS that does not logically follow from your tax return. In which case, there may have already been a return filed, and a refund paid. Or there is a LOT more income in W-2 or 1099 form than you had actually made.
In such cases, it is necessary to call the IRS representative who sent you the notice, or contact our office with a copy of the notice - especially if we prepared your return. An especially dangerous time for identity theft is right after you have moved - unless, of course, you have read my article in this newsletter on why you should file Change of Address forms with the State and Federal government.