I presented for a group of about 250 people last night in Rockford, Illinois. The audience was composed of clients and prospects of Savant Capital Management. Following the presentation, I learned from an audience member that his boss had been the victim of one of the most severe cases of identity theft.
The man’s identity had been used to purchase a tractor valued at $ 140,000, to open numerous credit card accounts, checking accounts, file fraudulent tax returns and more. In order to commit this type of fraud or identity theft in general, the crook needs the victim’s social security number. In most cases, of identity theft, the victim never knows how the thief obtained their personal information. That was the case here.
Even if you are careful protecting your social security number, that key identifier is in the hands of many people, some of whom, as history has shown, have not done a great job of protecting it.
Your best protection against financial identity theft, where the crook gets loans, opens checking accounts and credit cards in your name, is to freeze your credit reports.
This should be done at the three major credit reporting agencies, Experian, Equifax and Trans Union.
Freezing, as the word implies, is a near total lock down of your credit reports. To explain how it prevents identity theft, here is an example:
A crook obtains your name and social security number from a “dark website” that buys and sells personal information. That site may have purchased the information from hacker who breached a computer at a health care provider that had your social security number.
The crook uses your information to apply for a Visa credit card. Visa processes the application and requests a credit check at one or more of the credit reporting agencies. Since your credit reports are frozen, Visa cannot obtain your credit history and will reject the application for the credit card.
Credit report freezes are more effective than “fraud alerts” on your credit reports, because sometimes these alerts are ignored and unless you have already had your identity stolen, a fraud alert expires after 90 days, although it can be renewed.
The rules, costs and procedures for freezing your credit reports vary by the state of your residence. Go to the link below and click on your state to get more information about freezing your credit reports.