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Identity Theft

ALERT: Beware of Phishing Scam Mentioning TAS

Each year, millions of consumers have their identities stolen. In the course of a day, you may write a check at the grocery store, use your credit card to purchase tickets to a ball game or rent a car, change service providers for your cell phone, or apply for a credit card. These are all opportunities for identity theft.

According to the Federal Trade Commission, identity theft occurs when personal information is used, without an individual’s permission, to commit fraud. The more you know about how to protect your identity by controlling your identifying information such as your Social Security number and what to do if a problem arises, the harder it is for identity thieves to make you a victim.

Identity theft is very serious and harms not only the victims, but also the companies (banks, credit unions, stores, medical services, etc.) that can’t recover the money and ultimately, consumers bear the increased costs. Victims of identity theft spend months, sometimes years – and possibly thousands of dollars – cleaning up the damage the thieves have done to their good name and credit record. Victims may lose job opportunities, be refused loans for education, housing, or cars, or even get arrested for crimes they did not commit.

Facts about identity theft

• Identity theft was the number one cause of consumer fraud complaints (39 percent) in 2005, and statistics show that it continues to increase.
• Identity theft is rarely a stand-alone crime. It is almost always a component of one or more crimes, such as bank fraud, credit card fraud, employment fraud or the use of counterfeit financial instruments.

How does identity theft happen?

Well organized rings of thieves often commit identity theft using
high-tech methods such as:

• Phishing – The act of sending an e-mail to a user and falsely claiming to be a legitimate enterprise in an attempt to trick the user into providing private information and providing links to false websites that are used for identity theft.
• Trojans – A program that presents itself as a useful computer program but damages your computer by downloading spyware and other malicious code to gather personal information.

Less sophisticated methods of stealing information include:

• Dumpster diving – sorting through garbage cans or dumpsters looking for personal information.
• Reading or stealing mail or putting in a change of address.
• Stealing wallets/purses.

How can you prevent identity theft?

When it comes to identity theft, you cannot eliminate the possibility of becoming a victim. But there are steps you can take to minimize your risk.

• Do not carry your Social Security number or card in your wallet or purse.
• Use uncommon passwords on personal banking or financial accounts and do not share them.
• Do not give a business, or anyone else, your Social Security number just because they ask; always challenge the request.
• Protect financial information in your purse or wallet while at work.
• Check your credit report every 12 months. Every U.S. resident can get one free credit report from each of the three major credit reporting bureaus per year.
• Keep your personal information in a secure place in your home.
• Don’t give out personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.
• Shred bills and other documents that provide personal information.
• Carry only the identification and credit cards that you need.
• If you make a purchase from a retailer with which you’re not familiar (restaurants, bars, convenience stores), consider making purchases with cash rather than a credit or debit card. If you use a credit or debit card, check to make sure you are given your card back.

What should you do if you are a victim of identity theft?

• Report incidents of identity theft to the Federal Trade Commission (FTC) at www.ftc.gov/idtheft or the FTC Identity Theft hotline at 1-877-438-4338 or TTY 1-866-653-4261.
• File a report with the local police. Be sure to get a copy of the police report.
• Contact the fraud departments of the three major credit rating agencies:
  • Equifax – 1-800-525-6285, www.equifax.com
  • Experian – 1-888-397-3742, www.experian.com
  • TransUnion – 1-800-680-7289, www.transunion.com
• Close any accounts that have been tampered with or opened fraudulently.
• Report misuse of your Social Security number to the Social Security Administration.
• If you have previously been in contact with the IRS and have not achieved a resolution, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

Identity theft and your tax records

• An identity thief may use your stolen Social Security number to get a job. Their employer would report the thief’s wages under your Social Security number to the IRS. This could cause the IRS to think you have not reported all your income.
• If the thief files a tax return using your Social Security number, the IRS will think you have already received a refund or that you have filed a second copy or duplicate return.
• Be alert to possible identity theft if you receive an IRS notice or letter that states:
  • You have filed more than one tax return, or
  • You have received wages from an employer you have not worked for.
• If you receive this type of correspondence from the IRS, please respond immediately to the name, address, and/or number printed on the IRS notice.
• The IRS does not initiate contact with taxpayers via e-mail. The IRS does not request detailed personal information through
  e-mail correspondence.
• If you receive a bogus e-mail claiming to be from the IRS, forward it to Phishing@irs.gov or visit How to Report and Identify Phishing, E-mail Scams and Bogus IRS Web Sites on irs.gov to get instructions on how to forward the e-mail message. Do not open attachments or click on the links found within the bogus e-mail.

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!