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Why your clients should be wary
How thieves gain access
Prevent and detect
What your client can do if it happens
to them.
Identity theft is a form of fraud that steals someone else’s personal information to
access private resources, such as medical records or bank accounts, and often leads to
expensive consequences for its victims.
Identity theft is not going away, and this chapter covers information you can share with
your clients to enhance their chances of not being one of the growing number of
American victims of this crime.
Why your clients should be wary
 64% of Americans are very or extremely concerned about being a victim of
identity theft
 As many as 9 million Americans are victims each year.
 1.6 million households have had their bank accounts and/or debit cards
compromised.
 1 in every 10 American consumers has been a victim of identity theft
 The FTC received 250,854 complaints of identity theft in 2010.
 Average amount of money taken from each victim: $4,841.00
 Out of pocket cost for the victim to resolve identity theft damage: 498.00 to
1,319.00.
 Nearly 50% of victims learn of their identities being stolen within 3 months
 About 15% of victims don’t learn their identities have been stolen for 4 or more
years.
 Credit reports: 70% of victims have difficulty removing negative information
created from the identity theft.
 43% of victims knew the person who stole their identity
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 In some cases, it can take up to 5, 480 hours (the same amount of time as
working two full time jobs for a year) to repair the damage done by identity
theft.
 25.9 million Americans now have identity theft insurance.
How do they do it? How thieves gain access.
 Skimming information from transactions in a store
 Paper mail theft
 Hacking computer networks and databases
 Redundant IT equipment (thumb drives)
 “Shoulder surfing”—watching login credentials over users’ shoulders
 Dumpster diving
How your client can protect themselves.
 Prevent criminal access by protecting your documents
 When their SSN is requested, tell them to ask if they can provide
alternate information
 Shred any sensitive paper documents such as credit card or social
security statements
 Install anti-virus software and update it regularly
 Always use passwords when online
 Turn off their phone’s Bluetooth and wifi when not in use.
 Use cash in restaurants (this is the only “usual” place where it is normal
for someone to take their card out of sight for an extended time)
 Detect unauthorized activity in all their accounts.
 Monitor bank accounts at least weekly
 Sign up for available mobile or email alerts by their institution
 Monitor credit reports to spot unauthorized new accounts
What your clients can, and should, do if it happens to them.
 File a police report and provide as much evidence as possible. Your client should
keep a copy of the report; they will need it in some of the following steps to
prove they are a victim.
 Notify the credit bureaus and place fraud alerts on their credit reports; this
requires creditors to call them and get their approval before granting any new
credit. After they place the initial alert, it will remain active for 90 days. They
must place an extended fraud alert if they want it to remain active after that
period.
 They can freeze their credit instead of placing a fraud alert, which will stop
access to their credit altogether.
 If their credit card accounts have been compromised, they should call their
issuers and ask them to cancel their existing cards and issue new ones. If they
have automatic payments set up with any merchants, they should notify them of
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their new card numbers. Under law, the most they will be liable for is $50,
though many issuers have $0 liability for cardholders.
If their debit or ATM cards have been compromised, they should call their bank
and ask them to cancel the existing cards and issue them new ones. If they have
automatic payments set up with any merchants, they should notify them of their
new card numbers. If they do not report the fraud for debit cards quickly, they
may be held liable for the loss.
They should fill out the FTC's Identity Theft Affidavit form if a new account was
opened in their name. This form is accepted by some businesses and creditors as
a means to ensure they do not become responsible for debts they did not create.
If they are contacted by a collection agency about debt that was incurred in their
name without their consent, they should notify them in writing that they are an
identity theft victim and are not responsible for that account.
If their identity was taken through the theft of their wallet, there are additional
steps involved, including getting a new driver's license and replacing all their
membership cards. Your client should currently have a list of all the
memberships and cards they currently have and use this list as a checklist to be
certain they make all the necessary contacts and obtain all the necessary
renewals.
File a complaint with the Federal Trade Commission. The commission will not
investigate their case but will pass along their information to law enforcement
officials and government agencies nationwide; this helps those agencies observe
criminal patterns and fight identity theft.
Your client might also consider using a credit monitoring service so they can be
notified when someone applies for credit in their name. They are not asked
approval, they are just notified about credit changes after they happen.
They should closely examine all their bank statements and credit reports (which
they are entitled to for free as an identity theft victim) in the following months
to ensure there is no additional fraudulent activity.
Your clients’ rights under FCRA regarding Identity Theft:
The Fair Credit Reporting Act (FCRA) gives your clients specific rights when they are, or
believe that they are, the victim of identity theft. Here is a brief summary of the rights
designed to help them recover from identity theft.
They have the right to ask that nationwide consumer reporting agencies place "fraud
alerts" in their file to let potential creditors and others know that they may be a victim
of identity theft. A fraud alert can make it more difficult for someone to get credit in
their name because it tells creditors to follow certain procedures to protect them. It
also may delay their ability to obtain credit. They may place a fraud alert in their file by
calling just one of the three nationwide consumer reporting agencies. As soon as that
agency processes your client’s fraud alert, it will notify the other two, which then also
must place fraud alerts in the client’s file.
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Experian: www.experian.com to add an alert and view your report
immediately;
1 888 397 3742
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Equifax: 1 800 525 6285, www.equifax.com
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TransUnion: 1 800 680 7289, www.transunion.com
An initial alert (Initial Security Alert) stays in their file for at least 90 days. An extended
alert (Extended Fraud Victim Alert) stays in their file for seven years. To place either of
these alerts, a consumer reporting agency will require your client to provide appropriate
proof of their identity, which may include their Social Security number. If they ask for an
extended alert, they will have to provide an identity theft report. An identity theft report
includes a copy of a report the client has filed with a federal, state, or local law
enforcement agency, and additional information a consumer reporting agency may
require them to submit. For more detailed information about the identity theft report,
visit www.consumer.gov/idtheft.
They have the right to free copies of the information in their file (their "file
disclosure"). An initial alert (Initial Security Alert) entitles the client to a copy of all the
information in their file at each of the three nationwide agencies, and an extended alert
(Extended Fraud Victim Alert) entitles them to two free file disclosures in a 12-month
period following the placing of the alert. These additional disclosures may help your
client detect signs of fraud, for example, whether fraudulent accounts have been
opened in their name or whether someone has reported a change in their address. Once
a year, your client also has the right to a free copy of the information in their file at any
consumer reporting agency, if they believe it has inaccurate information due to fraud,
such as identity theft. The client also has the ability to obtain additional free file
disclosures under other provisions of the FCRA. See www.ftc.gov/credit.
Your client has the right to obtain documents relating to fraudulent transactions made
or accounts opened using their personal information. A creditor or other business must
give your client copies of applications and other business records relating to
transactions and accounts that resulted from the theft of their identity, if they ask for
them in writing. A business may ask the client for proof of their identity, a police report,
and an affidavit before giving them the documents. It also may specify an address for
them to send their request. Under certain circumstances, a business can refuse to
provide your client with these documents. See www.consumer.gov/idtheft.
They have the right to obtain information from a debt collector. If your clients ask, a
debt collector must provide them with certain information about the debt they believe
was incurred in their name by an identity thief - like the name of the creditor and the
amount of the debt.
If the client believes information in their file results from identity theft, they have the
right to ask that a consumer reporting agency block that information from their file.
An identity thief may run up bills in your client’s name and not pay them. Information
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about the unpaid bills may appear on your consumer report. Should they decide to ask a
consumer reporting agency to block the reporting of this information, they must identify
the information to block, and provide the consumer reporting agency with proof of their
identity and a copy of their identity theft report. The consumer reporting agency can
refuse or cancel the client’s request for a block if, for example, they don't provide the
necessary documentation, or where the block results from an error or a material
misrepresentation of fact made by the client. If the agency declines or rescinds the
block, it must notify your client. Once a debt resulting from identity theft has been
blocked, a person or business with notice of the block may not sell, transfer, or place the
debt for collection.
Your clients also may prevent businesses from reporting information about them to
consumer reporting agencies if they believe the information is a result of identity
theft. To do so, they must send their request to the address specified by the business
that reports the information to the consumer reporting agency. The business will expect
them to identify what information they do not want reported and to provide an identity
theft report.
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