Identity theft is a serious subject, and according to recent reports, it's a growing problem. Because identity theft is out of control (personal opinion) and has victimized a lot of people, it's spawned a cottage industry that sells protection at a price. Critics, including the FTC, believe a lot of these identity theft companies are selling services that are supposed to be free.
If you've watched TV in the past year, you've probably seen the ads for FreeCreditReport.com. These ads have urban minstrels (guitar dudes) singing about the woes of people who have had their identities stolen or made poor credit choices. The idea is to get you to go to FreeCreditReport.com, which isn't exactly free. If you read the fine print when you sign up at this site for your free credit report, you are actually authorizing them to bill your credit/debit card $14.95 a month for eternity. This ads up to $179.40 a year.
That doesn't exactly sound like it's free, does it? You can cancel within the first seven days, but given their immense advertising budget, it appears not very many people do or seem to have a problem cancelling the service. Even worse, a lot of people who signed up for their service probably aren't even aware that they could have actually gotten their credit report for free elsewhere.
Under federal law, anyone is entitled to get their credit report for free. To bring attention to this, the FTC (Federal Trade Commission) has launched an awareness campaign entitled "FTC Releases Humorous Videos with a Serious Message About AnnualCreditReport.com."
AnnualCreditReport.com is the only source authorized to give out free credit reports under federal law. The law, which is part of the Fair Credit Reporting Act, guarantees anyone access to a free credit report from each of the big three credit reporting agencies — Experian, Equifax, and TransUnion — every twelve months.
The reason for this campaign was the large volume of complaints from consumers, who thought they were getting something for free, but were not. The FTC is warning the public not to be fooled by TV ads, e-mail offers, or ads on the Internet.
Please note that little to nothing is done to make sure these ads and or spam messages offering protection are legitimate. These ads and spam e-mails might actually come from fraudsters. Answering one of them might lead to a person having their identity stolen.
There are other reasons not to hand over your personal information to the wrong organization. We live in a world where hackers and identity thieves breach databases with an alarming frequency. If you are handing over personal information to one of these companies, they might be maintaining it in a database where it could be stolen. Also, there is no guarantee that your personal information isn't going to be stolen by a dishonest insider. Because information is often outsourced and electronically transmitted all over the world, a lot of people can end up having access to it. All it takes is one dishonest person to decide to steal it and sell it to someone else.
Information is worth a lot of money, and besides dishonest insiders, data brokers and the credit bureaus sell it all the time for marketing purposes. Having information in too many places is a common denominator in a lot of people who become an identity theft victim.
AnnualCreditReport.com is the only place to get a free credit report authorized by the government. I would trust my information with them a lot more than some of the places I see advertising identity theft protection.
Free reports can be requested online, by phone or by mail. To get your free credit report online go to AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You have the option of requesting all three reports at once or you can order one report at a time. A lot of users of this service order one every few months to monitor their credit on a more frequent basis without having to pay for it.
If you see items on your report that are inaccurate, the FTC provides a tutorial on their site on how to dispute credit errors. If you think you have become an identity theft statistic, you may need to place a fraud alert on your credit report, close compromised accounts, file a complaint with the FTC, or file a police report. A tutorial is also provided to help consumers do this on FTC’s identity theft Web site.
Besides the FTC site on identity theft, I recommend the Identity Theft Resource Center and the Privacy Rights Clearinghouse as excellent free resources to learn how to prevent identity theft and recover from it.
If you think you've been tricked to paying for a credit report, the FTC is asking that you let them know about it by filing a complaint. Additionally, if you receive any spam e-mails offering free credit reports, the FTC asks that you send them to firstname.lastname@example.org.
Spam e-mails offering free credit reports can be phishing attempts, which are designed to trick you into giving up your personal information. They can also contain malicious software, which will steal all the information off your computer, automatically. Either way, answering one or even clicking on a link in one can make you an identity theft victim.
Credit reports don't necessarily catch all forms of identity theft. Sometimes different parts of people's identities are used to forge a synthetic one. This phenomenon has been dubbed synthetic identity theft. Quite often, because a lot of the information doesn't match, the credit bureaus don't pick it up.
Other examples where a credit bureau might not reveal identity theft are medical benefit fraud, employment fraud, government benefit fraud, some forms of check fraud and when it is used to commit crimes of other than a financial nature.
In the recent past, this has been discovered by many during tax season, when they get a bill for taxes that an identity thief never paid to the government. A lot of experts recommend that you watch your yearly Social Security statement carefully because of this. Identities are stolen to file fraudulent tax returns or used to obtain employment.
As a bonus, I am going to include what I consider an interesting post from Kelly Sonora over on the e-Justice blog. In this post, Kelly provides 25 tools that can be used to monitor information about yourself, see what is being said about your business, search for information about yourself and find public records that relate to your personal information. A prudent person can even set up alerts on some of these tools so they are automatically notified of any new information.
Please note, Kelly's blog post is not sanctioned by the FTC, but nonetheless, I think it's a neat set of tools that a lot of people might find useful.
As a final bonus — here is a parody (courtesy of the FTC) warning us all the the guitar dude's free credit report isn't free: