Of all the things that can be stolen, your identity is probably the most damaging.
While material items can be replaced, your identity can cause an array of issues — not to mention the emotional strain and expense that accompanies a breach of your personal information.
Smart Business spoke with Donna Holm, a senior tax manager at Sensiba San Filippo LLP, for more insight into the effects of identity theft and the ways in which victims can begin to rebuild their security.
What is identity theft and who is affected?
Identity theft occurs when someone uses your personal information to commit fraud and/or open new accounts or use your existing accounts to make purchases.
Fraudulent tax filings are still the most common method of identity theft. Each occurrence brings a ripple effect of problems that could take years to remedy.
Because of the influx of new technology, smartphones, Internet dependency and the pure mass of personal information readily available, identity theft is on the rise, particularly among those between ages 20 and 29.
Of the approximate 17.6 million Americans victimized by identity theft in 2014, the young and the elderly are most susceptible because of a minor’s information going largely undetected and the elderly falling victim to government benefit and medical identity fraud.
Also note that two-thirds of identity fraud victims in 2014 had previously received a data breach notification, with over 1 billion records being leaked in 2014 alone by large companies.
How can you avoid identity theft?
To avoid identity theft, minimize, monitor and manage. It’s critical to keep documents secure, particularly Social Security cards, birth certificates and passports.
Be mindful of credit card use and keep your card visible during purchases. Protect passwords and create unique passwords for every site, changing them regularly. This helps keep perpetrators from acquiring a skeleton key to your online identity.
Avoid opening unfamiliar links or downloads. Limit the information you share on social media. When traveling, inform your bank for credit/debit card use and stop your mail delivery. Review your medical explanation of benefits.
File taxes early. Don’t share personal information on the phone with anyone and understand that the IRS will not call you. Lastly, keep your PIN number secure, shred receipts, and check your credit score routinely to monitor sharp changes.
What should you do if your identity is compromised?
The IRS processed $5.8 billion in fraudulent refunds for 2014. If you think someone has stolen your refund or used your Social Security number, complete Form 14039, Identity Theft Affidavit, and be sure to respond promptly to correspondence from the IRS.
In order to truly recover from identity theft, there are several steps requiring immediate attention. First, generate an Identify Theft Affidavit through the Federal Trade Commission.
Once completed, file a police report. Note that 32 percent of victims do not notify the police. You will need both the affidavit and police report to send to your credit agencies.
Next, pull a credit report from one of the three credit bureaus, which can be done at no charge, and request that the reporting agency place a fraud alert on your file. The bureau with which you file the fraud claim will notify the others.
Write letters disputing each charge and send certified mail with a copy of your credit report highlighting the error.
Next, send the same letters and credit report copies to the companies where the fraud took place so that the fraud is recognized; they can block the information and stop reporting the transaction for debt collection.
Lastly, request copies of the documents that were fraudulently used so that you can obtain a copy of the signature that was forged. ●
Insights Accounting is brought to you by Sensiba San Filippo LLP