The IRS’s efforts to combat tax ID theft are paying off. Complaints of ID theft fell 46% for the 2016 tax filing season. That does not mean you should be complacent about ID theft as it remains a common problem and can create significant issues for you. Identity (ID) theft is a crime where a thief steals your personal information, such as your full name or social security number, to commit fraud. The identity thief can use your information to fraudulently apply for credit, file taxes, or get medical services. These acts can damage your credit status, and cost you time and money to restore your good name. You may not know that you are the victim of ID theft until you experience a financial consequence (mystery bills, credit collections, denied loans) down the road from actions that the thief has taken with your stolen identity.
You may have noticed that many things have changed to ensure your information privacy:
- Medicare is now issuing cards and ID’s that do not use the Social Security number of the insured. They will be reissuing cards starting now and through 2018
- Most employers and other reporting entities are using redacted Social Security Numbers in the documents they send to you.
- Password requirements are becoming more complex and require a twostep verification process. This can be challenging at times, especially remembering many complex passwords, but the effort is worth it.
- The IRS is requiring paid tax preparers to include driver’s license information on the tax return. Take steps to protect yourself from identity theft:
- Secure your social security number (SSN). Don’t carry your social security card in your wallet or write your number on your checks. Only give out your SSN when absolutely necessary.
- Don’t respond to unsolicited requests for personal information (your name, birthdate, social security number, or bank account number) by phone, mail, or online.
- Watch out for “shoulder surfers.” Shield the keypad when typing your passwords on computers and at ATMs.
- Collect mail promptly. Ask the post office to put your mail on hold when you are away from home for several days.
- Pay attention to your billing cycles. If bills or financial statements are late, contact the sender.
- Review your receipts. Promptly compare receipts with account statements. Watch for unauthorized transactions.
- Shred receipts, credit offers, account statements, and expired cards, to prevent “dumpster divers” from getting your personal information.
- Store personal information in a safe place at home and at work.
- Install firewalls and virus detection software on your home computer.
- Create complex passwords that identity thieves cannot guess easily. Change your passwords if a company that you do business with has a breach of its databases
- Order your credit report once a year and review to be certain that it doesn’t include accounts that you have not opened. Check it more frequently if you suspect someone has gained access to your account information.
If you are an unfortunate victim of ID theft, the sooner you act to report the issue, the easier it will be to clean-up the mess left behind. First notify the affected creditors, bank, government agency. File a police report and notify the FTC with a complaint and affidavit form, remember to send your creditors a copy of the theft report. Check your credit reports, report ID theft to them and consider putting a credit freeze on your reports. Change the passwords on all accounts (you may want to invest in a password manager program). There are many on-line resources to help you through this process. You may also want to consider investing in a company that will track and manage ID theft for you like LifeLock, Legal Shield, Experian, Identity Guard, or any number of companies that help you protect your information. Don’t forget that your minor children can be victims of ID theft that can be undetected for years. Check their information annually as you would your own. Anita Jean is an Enrolled Agent and owns Financial Fitness Tax Service. You can contact her at 940.365.3115 or at 5099 US Hwy 377 S in Krugerville.