How To Prevent Your Identity Being Stolen

I got a call from my mate Chanson who lives in Arizona. Chanson is a intelligent guy that I roommated in college with a few years back. He was majoring in Finance at the time, but has since started a career in Operations Management. While on the phone we talked about life, girls, and among other things - a mutual friend. He told me about this guy we knew in college that literally had his identity stolen and ruined. From inside our friends bank, his personal information was stolen or resold, because the criminals knew details that nobody else would know (like the maximum amount of money to withdrawal out of his account without going into overdraft). About 2 weeks after he looked at his account balance, he reported the incident to the bank/credit reporting agencies and found multiple loans in his name which weren’t his totaling over $50,000. Not only did he have loans, but they were 3 months old and delinquent in payment which effected his credit rating. These people are sneaky bastards that ruin good lives.That was a year ago.

The mutual friend is slowly rebuilding his life, but has had to spend a truckload of money on lawyers to figure this whole mess out, and there are still some account applications every month under his name that he has no idea about. Luckily, credit reporting agencies have a ban on credit applications without calling him first.

Don’t be caught with your pants down…

Different Types of Identity Theft

A government website lists what can be done with your identity. What do thieves do with a stolen identity?

Once they have your personal information, identity thieves use it in a variety of ways.

Credit card fraud:

• They may open new credit card accounts in your name. When they use the cards and don’t pay the bills, the delinquent accounts appear on your credit report.
• They may change the billing address on your credit card so that you no longer receive bills, and then run up charges on your account. Because your bills are now sent to a different address, it may be some time before you realize there’s a problem.

Phone or utilities fraud:

• They may open a new phone or wireless account in your name, or run up charges on your existing account.
• They may use your name to get utility services like electricity, heating, or cable TV.

Bank/finance fraud:

• They may create counterfeit checks using your name or account number.
• They may open a bank account in your name and write bad checks.
• They may clone your ATM or debit card and make electronic withdrawals your name, draining your accounts.
• They may take out a loan in your name.,/li>

Government documents fraud:

• They may get a driver’s license or official ID card issued in your name but with their picture.
• They may use your name and Social Security number to get government benefits.
• They may file a fraudulent tax return using your information.

Other fraud:

• They may get a job using your Social Security number.
• They may rent a house or get medical services using your name.
• They may give your personal information to police during an arrest. If they don’t show up for their court date, a warrant for arrest is issued in your name.

Identity Theft Prevention

I’ve tried to be ultra careful with my credit card, drivers license, and especially my social security number. Without these numbers, usually it makes it more difficult to rip off your identity.

I was thinking about subscribing to a service called LifeLock, which is a company that offers credit theft protection services. I was pointed in their direction by my friend Tim Ferriss, after he posted about creating a paperless life. I investigated various other credit protection companies, and for the price and the quality of service, I ended up going with LifeLock.

It wasn’t easy to part with my $10 or so a month it costs.

I subscribed to LifeLock. It’s my second month, I’ve received my credit reports from Experian, Equifax, and Transunion and on one I actually had a wife. I reported that error.

I’ve received email communication from LifeLock that they’ve secured my credit applications and removed my name from mailing lists. This means is that if someone wants to apply for credit that’s tied to my social security number, they need to CALL me on the phone and verify.

Basically, my rationalization was that who would ever steal my identity? I rarely give out private information about myself, and I’m usually careful wherever I present it. I got over it and assumed that victims probably thought the same as me.

Cool.

And… I get rid of those annoying “Your Pre-Approved!” mass mailings.

Do you have a identity theft horror story?

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