Red Flags of Identity Theft

by Susan M. Wolcott, CPA, CFE (Certified Fraud Examiner)

To Our Clients and Friends

It is estimated that every 3.5 seconds someone in the United States has their identity stolen. Usually the victim has no idea their identity has been stolen until after the fact. Many view this as an �online� only problem. While phishing scams, Trojans, and other forms of cybercrime are a factor there are also low tech means of identity theft such as a stolen wallet or purse or someone digging through garbage.

What are red flags of identity theft?

� Mistakes on your bank, credit card, or other account statements.

� Mistakes on the explanation of medical benefits from your health plan.

� Your regular bills and account statements don�t arrive on time.

� Bills or collection notices for products or services you never received.

� Calls from debt collectors about debts that don�t belong to you.

� A notice from the IRS that someone used your Social Security number.

� Mail, email, or calls about accounts or jobs in your minor child�s name.

� Unwarranted collection notices on your credit report.

� Businesses turn down your checks.

� You are turned down unexpectedly for a loan or job.

While these red flags may indicate identity theft, there may be legitimate reasons for the above listed events so make sure to follow up and resolve any issues. Protect yourself.

How to protect your information and minimize your risk of identity theft:

1. Read your credit reports. You have a right to a free credit report every 12 months from each of the three nationwide credit reporting companies. Order all three at once, or order one report every four months. To order, go to www.annualcreditreport.com or call 1-877-322-8228.

2. Never carry more credit cards than you need and cancel credit card accounts you don�t use.

3. Never carry your social security card. Likewise, don�t disclose your social security number unless absolutely necessary, i.e. for banking or tax purposes.

4. Read your bank, credit card, and account statements, and the explanation of medical benefits from your health plan. If a statement has mistakes or doesn�t come on time, contact the business. While a telephone call may be immediate and give you some answers, to protect your rights when a mistake is found you need to write to the company within 60 days. Make sure you know the contact address and the information the company requires. That information is printed on most credit card and account statements.

5. Don�t leave receipts behind. Cross check your credit card bills against the receipts.

6. Shred all documents that show personal, financial, and medical information before you throw them away. Use a diamond or cross-cut shredder (never a strip shredder).

7. Keep a tight hold on your purse or wallet. Pickpocketing and purse snatching are still alive and well. At parties, in restaurants, or while shopping, know where your purse or wallet is at all times.

8. When traveling, suspend delivery of the newspaper and mail, or ask a trusted neighbor or friend to gather these items for you.

9. Take all outgoing mail to the post office or a secure US postal box. Never leave your paid bills in an unsecured mailbox for pick up.

10. Create passwords that mix letters, numbers, and special characters. Don�t use the same password for more than one account. If you must use the same password make sure that you use different passwords for financial purposes than you use for social networking activities.

11. If you shop or bank online, use websites that protect your financial information with encryption. An encrypted site has �https� at the beginning of the web address; �s� is for secure.

12. When shopping online, avoid unknown ecommerce sites. Be particularly leery of any banner ad or unexpected pop-up that claims your computer is infected or in need of repairs. Rogue spyware scanners and nefarious registry cleaners often use these tactics to trick you into purchasing software that may be ineffective at best, and malicious at worst.

13. Familiarize yourself with online scams so you don�t become the next victim. If it sounds too good to be true, chances are it is a scam.

14. If you use a public wireless network, don�t send information to any website that isn�t fully encrypted.

15. Keep your computer secure. Make sure your antivirus software is always up to date and a firewall if running at tall times.

16. Keep your computer�s operating system, web browser, and security system up to date.

17. Watch for shoulder-surfers. When entering a PIN number or a credit card number be aware of who is nearby and make sure nobody is peering over our shoulder to make a note of the keys you�re pressing.

If you believe you are a victim of identity theft:

� File a police report to document the crime for your creditors.

� Report the theft to the Federal Trade Commission: 1-877-438-4338 or www.ftc.gov/complaint.

� Contact all your creditors such as your bank or credit union, credit card company, cell phone provider and other utilities.

� Consider doing a credit freeze.


� The Oregon Consumer Identity Theft Protection Act was passed in 2007. Visit the website that was established at www.dfcs.oregon.gov/id_theft.html for additional information on protecting yourself and what to do if you become an ID theft victim.

� The Federal Trade Commission has available a booklet �Taking Charge, What to Do If Your Identity is Stolen�. Download a copy from their website at www.ftc.gov.

Identity theft is a serious crime. It can disrupt your finances, credit history, and reputation, and take time, money, and patience to resolve. Be vigilant about protecting your personal information.

Very truly yours,

Susan M. Wolcott, CPA, CFE