Module 12 Lesson 2

Emily Watkins

Identity Theft

Identity theft is the fraudulent use of a consumer's personal identification, credit, or account information. Identity thieves obtain personal information from their victims to steal their identities. The thief may use the personal information to apply for a driver's license, open a bank account, apply for credit cards, get cash through bank cards, or get a job. The thieves can use their account information to make purchases with a check, debit, or credit card, they can apply for a credit card, engage in online shopping, or pay bills online through their new identity.
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How can consumers protect themselves against identity theft?

There are several ways to protect yourself against identity theft:

  • Only give your social security number to trusted organizations when necessary.
  • Sign the back of credit and debit cards with your signature and "Please see ID."
  • Close unwanted accounts by writing and by phone.
  • Only carry personal information in your purse or wallet when necessary. Do not carry your social security number, birth certificate, or passport.
  • Take care when using the Internet. Only make a purchase on a secure site, use credit instead of debit when ordering online, and watch for suspicious elements on a site that may indicate spyware.
  • Choose difficult passwords to guess that include letters, numbers, and symbols. Use different usernames for varying accounts and change them regularly.
  • Shred all documents that contain personal information, rather than tossing them into the trash bin carelessly.
  • You may search your name frequently in order to make sure that no one is using your identity and keep personal information in a safe place that does not provide easy access.
  • Last but certainly not least, check credit reports.

Where should information be kept?

What should and should not be kept in your wallet?

-You should have the following items in your wallet:

  • Credit and/or debit card
  • Cash for emergencies
  • Contact information in the case of your wallet being lost so the person who finds it may contact you to return it
  • Reward cards to save money
  • Coupons
  • Your ID

-You should not have the following items in your wallet:

  • Social security card
  • Birth certificate
  • Passwords and PIN numbers
  • Spare keys
  • Blank checks
  • Extra credit cards
  • ATM card

Where should credit cards and ATM receipts be kept?

A credit card may be kept in your wallet if you handle it wisely and responsibly. ATM receipts should be shredded after you record the transaction.

*Only make credit card purchases on safe and secure websites

What do credit reports show?

-Identifying Information

  • Name, Address, Social Security Number, Birthday, and Employment Information supplied to the lenders

-Trade Lines

  • Credit Accounts: Reports that show each account established with a lender-- They report on the type of account, the date it was opened, the limit of loan amount, the account balance, and payment history.

-Credit Inquiries

  • This contains a list of everyone that has accessed the credit report within the past two years. It lists both the voluntary and involuntary inquiries.

-Public Record and Collections

  • Public record information includes bankruptcies, foreclosures, wage attachments, suits, and judgments. This information is collected from state and county courts which also collect information on overdue debt from collection agencies.

How can consumers raise their credit score or keep a high credit score?

  • MAKE CREDIT PAYMENTS ON TIME! This is crucial in maintaining a high credit score. Consistently paying your bills on time should make credit scores increase.
  • Reduce the amount of debt that you owe. Put most of your available budget for debt payments on the higher interest credit cards and maintain minimum payments on the others.
  • Open new accounts and handle them responsibly to re-establish your credit history. This will raise your credit score long term.
  • Do not open new accounts rapidly. This will lower your account age which can have a devastating effect on your scores if you do not have a lot of other credit information.
  • Because up to 79% of credit cards contain mistakes, it is beneficial to check your credit report and clear up mistakes.