Commentary: The myths surrounding identity theft
A data breach is the "unintentional disclosure of private information," including ATM PINs, financial information, passwords, logins and related items. Breaches can be malicious acts or accidental. While the Equifax breach is highest in terms of public knowledge, it pales by comparison to what happened at eBay, Adult Friend Finder and Yahoo. The top 10 data breaches accounted for compromised data of over 4 billion data sets (individual releases). Odds are that your personal information has been compromised multiple times.
Identity theft follows data breaches. Criminals use compromised data for purchases or steal directly from bank accounts or impersonate victims. While stopping data breaches is nearly impossible, combating identity theft is often possible. The first step is to contact the web site www.annualcreditreport.com (or call 877-322-8228) to request and review copies of your credit reports. This is a free annual service. The next protective step is to contact the three major credit bureaus and order freezes on your account. At present, you may incur a small fee to lock your credit information, which can only be accessed when you lift the freeze in order to open a new account or make a large purchase. Freezes prevent others from accessing credit information. (Call Equifax at 800-349-9960, Experian at 888-397-3742 and TransUnion at 888-909-8872. A fourth and lesser-known bureau, Innovis — 800-540-2505 — also allows for security freezes).
With the basics in hand, let's look at some of the myths involving identity theft:
Myth: Identity theft is easily resolved
According to the Federal Trade Commission, the average victim takes over six months and 200 hours of work to resolve an incident. It is relatively easy to reverse fraudulent charges; the more difficult situations involve reestablishing credit, closing unapproved accounts, and restoring files with the state and federal government. Sadly, the efforts may need to be repeated as many criminals sell the stolen data to other scammers.
Myth: Consumers are protected by zero-liability practices
In a number of cases, banks and credit card companies will not hold customers liable for theft, but according to the FTC, only a quarter of victims suffer no financial loss (the average loss is $1,500). There is little protection from losses at ATMs.
Myth: Identity theft only affects adults
Children are vulnerable to identity theft. Information is often stolen at home by relatives or friends or at school by staff members. Child identity theft often goes undetected for years. Bogus driver's licenses, loans, and credit card applications are frequent.
Myth: Victims can count on law enforcement for assistance
Police departments can do very little in addressing identity theft. Only a small percentage of cases are ever resolved and filing a police report will only protect you from debt collectors and businesses. Nonetheless, always file a police report. Begin by filing a complaint to the FTC and follow the steps that are defined. Filing this report provides additional protection and allows for extended fraud alerts on your credit reports.
Myth: Debit cards are safer than credit cards
This myth is probably most circulated. Credit cards are far safer than debit cards. Liability on credit cards is capped at $50 and in most cases no loss occurs. With a debit card, liability begins at $50 if fraud is reported within two days, jumping to $500 if reported within 60 days. After that, liability can be unlimited. Debit cards are tied to bank accounts and fraudulent use could drain accounts quickly, at least until issues are resolved. Theft by credit card does not compromise your bank account and there are no overdraft charges.
As with previous suggestions, the best protection for the consumer is education and vigilance. Often the first hints of a problem will be seen in unauthorized charges, mysterious bills in the mail and irregularities in bank accounts. Monitoring your finances will clearly provide protection. Don't fall victim to the myths.
Elliott Greenblott is a retired educator who serves as the Vermont AARP Fraud Watch Network coordinator.
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