Financial Planning for March 2002

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Identity Theft – Is It Really That Bad?
Imagine the following scenario:

Last year, your one-year-old son died of a terminal disease. A year later, not too long after the first anniversary of your baby’s death, claim him as a dependent on your income tax return. You wait for the refund … and wait … and wait. Finally, you call your tax preparer who calls the IRS and receives the third degree as if she's a criminal. You then speak to the IRS directly and they tell you someone has already claimed your child as a dependent for the year he died, but if you'll produce mountains of evidence, they'll look at your case and see if there's anything that can be done. Oh, and by the way, the IRS can’t tell you or the police who did it because that would violate the law.

Do this sound far fetched? Or how about this headline: “Imposter Runs Up Thousands on Sheriff’s Tab!!” The sad truth is they both these stories really happened to real people. The even sadder truth is the victims are not alone.

In the case of the family whose child died, it wasn’t that the IRS employee was trying to be cruel, rather that current law does not allow the IRS to divulge any information to local law enforcement authorities to pursue the individuals who perpetrate the fraud.

In the case of the local sheriff, his personal information was just too readily available. Hence, the criminal made a few more purchases. That was a pretty neat trick considering the credit cards never left the sheriff's wallet!

Both of these are prime examples of identity theft – a very popular crime these days. What exactly is identity theft and how do you protect yourself and your family from what could, in the extreme, be a very deadly crime?

Identity theft is a crime where an imposter obtains the personal information about you in order to be able to use your name and your resources to transact business with a third party. This sensitive information generally includes your name, Social Security Number and driver’s license number. Note, we didn’t mention credit cards because with the abovementioned minimum of information, credit cards can be obtained without your knowledge and used to rack up thousands of dollars in charges. Then, while the culprit gets away, you’re left with ruined credit and the daunting task of regaining your financial health.

So how do these crooks get your information? One super easy way is to look through your mail. Think about the numerous credit card applications you get each week and what about the statement that comes from the Social Security Administration each year informing you of your estimated benefits. If your employer pays you by mail, or mails check stubs to you, a crook won’t have a hard time finding your Social Security Number at all.

Is you mailbox locked? Great!!! How secure is your trash? Again, how many credit card applications do you throw away each week? If you don’t shred the applications, they are an easy source of information for a would-be identity thief.

Ok, so you use a locked mailbox and shred your mail, but what about that movie you ordered from XYZ Family Entertainment? Did you check them out before you gave them your credit card number to place the order? No? Uh oh, we hope the movies came.

These are just a few ways your personal information can be stolen. Crooks may eavesdrop on public conversations or steal your wallet or … or … or. There are any numbers of ways to get information for the really clever thieves out there.

Many people have not heard of or been affected by identity theft. But according to the Identity Theft Resource Center, there were an estimated 700,000 victims of identity theft in 2001. This should give us all pause and ask ourselves if we’re protected or not.
And if it’s so easy to get your information, what can you do to protect yourself? Here is a list of some of the precautions you can take:

  • Shred your sensitive documents. Never let a credit card application with your name on it leave your house in one piece. For heaven's sake, make sure those convenience checks are ripped into microscopic particles before you throw them away.
  • Check your credit reports from the three major agencies once a year. The three agencies are-
  • If at all possible, do not carry your Social Security Card around in your wallet and don't put your Social Security Number or drivers license number on your checks.
  • Never ever give your Social Security Number to a stranger over the phone. Do not even give it to someone in person unless there is a very good reason for them to be asking for it.
  • You can reduce the number of pre-approved credit card offers you receive by calling 888-5OPT-OUT. Be prepared to give them your social security number.
  • Keep on the lookout for your Social Security Statement of Earnings and Benefits. It's automatically sent three months before your birthday. Make sure you get it and not someone else.
  • Don't call toll free numbers and place orders unless you're sure that you're dealing with a reputable company.
  • Be careful of what you say and what information you give on cell phones. Cell phone transmissions are easily intercepted.
  • Don't discuss sensitive identity information in public for anyone to hear.

These are just a few of the many things you can do. For more information, you can go to, or These links can help you identify how to further protect yourself both before and after an identity theft. We encourage you to become familiar with these sites.

So what should you do if you do become a victim? Well, after calming down, you should first call each of the credit reporting agencies and report the situation. You'll be able to place a fraud alert on your Social Security Number and request a copy of your statements for review. You should also call the police and report the matter and let all creditors who opened fraudulent accounts know what’s happening. If you tell them it’s a case of identity fraud, they will be required to provide you with transaction information. Don’t forget to call your credit card issuers and get new cards with new account numbers and let your bank know about the theft.

Finally, stay in tune with the legislative efforts in this area. Sometimes, it’s easy to look at the really big picture items, like tax legislation or the war on terrorism, and forget about the simple things that really hit your pocketbook. For most of us, identity theft can have serious long-term ramifications and we need to focus on what our legal remedies are today and what our how legislators propose to protect us. Whether you agree or disagree with legislation currently under consideration, make sure your representatives know what you believe is proper.

Identity theft is big business and getting bigger every day. Don’t let all your hard work go down the drain because someone else steals your good name. Take steps now to protect yourself and your assets before it’s too late and, of course, if we can be of any service to you in this area, let’s talk. Otherwise, have a great March!!!


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