What To Do When Your Identity Is Stolen

In this challenging economy, instances of identity theft and credit card fraud are skyrocketing. I was recently the target of fraud, took immediate action and wiped my credit report clean! Read on…

When I sorted through my mail and opened up an envelope with the J.C. Penny credit card that I didn’t order, I was annoyed, but not yet alarmed. I have been the target for pre-approved credit card mailings for years, and I assumed this was just another attempt to get my business. This time though, instead of just a form, they were getting more aggressive and sending me a usable card to get my money even faster. Regardless.. The plastic card and welcome letter went right into my shredder.

However, the next day my new Sears, TJX and Chase credit cards appeared in the mail. Not good. I called TJX first and found out that someone had opened up the credit card in my name at a store and knew my social security number, birth date and mailing address. The other retailers gave me the same story. In total, the person who stole my identity had made about $2500 in charges across five stores over one weekend. It also appeared that in no cases did the retailer ask for any form of identification especially a photo id, before they allowed this person to make charges. Even scarier, I already have a credit card account at Sears. The sales person opened up a duplicate, yet fraudulent account.

How could this happen?!! In a prior job I was a member of the Privacy and Information Practices council and knew all about identify theft and all the precautions we need to take. I never give out my social security number, shred documents constantly.. and when in doubt, I shred some more.

After contacting the credit card companies, reporting fraud and closing the accounts, I went to the Experian credit bureau website where you can instantly get a copy of your credit report and place a temporary credit alert on your account. Of the three credit bureaus: Equifax, Transunion and Experian, Experian is the only site with immediate report and alert access.

I then Googled “What do I do if my identity is stolen?” and about 300,000 websites came up. The most useful one was the Federal Trade Commission’s (FTC) site which gave step by step, clear advice on what to do, how and in what order.

As instructed I submitted an official complaint right to the FTC which took less than 5 minutes on their website, then proceeded to the Police notification.

Do I call 911? This really isn’t an emergency, but it is a crime. I decided to Google my local police department and go to their website where I downloaded their handy-dandy “Report a Crime Form”. The form itself could be a tool for identity theft- asking me for my date of birth, social security number etc. I decided to only fill out what was most important, then I typed up and attached a formal overview of the Identity Theft activities and faxed it in.

Later that day my phone rang and it was someone from the local police station. For identity theft, you have to come down to the station and get special forms to fill out in person.

I went down to the station and requested the form. “Do you know who did this to you?” asked the female officer. “Um, No” I replied. This was identity theft. She went on to tell me that she would submit a report, but that there was nothing more the local police department could do. And, even the credit card companies would probably not do anything and the person who stole my identity would likely never be caught. How reassuring!

Store Associates Get Paid to Create Fraud

Every time I go shopping, store associates will ask me whether I want to “save 10%” and open up a store credit card. In most cases, these associates make extra commissions or incentives if I say “yes”. This incentive works directly against the need for these Associates to care about credit card fraud.

On the website Incentive Central.com I found an article all about Lowes and how they ran this major effort in 2002 called “You Got The Power” to motivate their store associates to generate credit card applications. Associates won cash, flat screen TVs, 16-piece golf sets, and Bose Wave Radios for opening the most credit cards. Lowes actually won an award for this promotion from Incentive Central. I wonder how many of the credit card applications were fraudulent.

The Kohls store chain actually has a job called “Point Of Sale Credit Greeter”. Position Summary: “Responsible for greeting customers and offering them the opportunity to apply for a Kohl’s Charge; providing customers with the benefits of the Kohl’s Charge, providing information regarding the Kohl’s Charge and responding to questions about the store. Assisting store to achieve credit goals by soliciting, processing and activating new Kohl’s charge accounts.”

With all this focus on generating credit card applications, what focus has been placed on preventing fraud? In my personal situation, someone opened up four new “in store” credit cards with no form of identification or picture ID. Very disturbing!

Recent Stats on Identity Theft & Credit Card Fraud

According the Identity Theft Resource Center:

* A Gartner study, in 2006 stated that the identity theft victim population was at 15 million. That means every minute about 28 1⁄2 people become a new victim of this crime, or a new victim in just over 2 seconds.

* Almost all studies agree that the top states in terms of victims per capita are: New York, California, Nevada, Arizona, Washington, and Texas.

* The incidence of victimization increased 11-20% between 2001 and 2002 and 80% between 2002 and 2003 (Harris Interactive).

* In a bulletin published by the Bureau of Justice Statistics, an estimated 3.6 million households were affected by identity theft during a 6-month period in 2004. If an entire year was considered, that could mean that 7.2 million households were affected in a 12 month period.

After some Internet research, I also learned that the credit card industry uses two main indicators to measure credit card fraud.

1) Net fraud losses as a percentage of total sales volume

2) X Cents of fraud per $100 in credit card volume

The Nilson Report is considered the leading publication for the Credit Industry and is the source for most credit card fraud statistics. www.nilsonreport.com Per Nilson, in 2006, fraud was 7 cents per $100 in volume

Wrap Up

This experience has 1) made me very mad and 2) wasted many hours of my personal time. The good news is I have learned more about Identity Theft and Credit Card Fraud and will go above and beyond to protect myself in the future.

Every day I come home and hope that I don’t see another new credit card. I have to trust that my Fraud Alerts are working……….