As many as 9 million Americans have their identity stolen each
year, according to the FTC.
Identy theft occurs when someone uses your personal information, such as your name, social security number, or credit card number, without your permission, to commit fraud or other crimes. Identity
theft can damage your credit status and cost you time, money, and aggravation restoring your good name.
An identity thief may use your information to commit various types of fraud:
- Credit Card Fraud: Thieves open a credit account in your name, use it and don't
pay the bill.
- Utilities Fraud: Thieves may open new services such as a new
wireless phone line on your existing account or open a new electric account
using your name.
- Bank Fraud: Thieves may create counterfeit checks using
your name and account number, open a new bank account in your name and write
bad checks, clone your ATM card, or take out a loan in your name.
- Government Documents Fraud: Thieves use your name and SS number to get
government benefits, get driver's license with your name but their picture or
file fraudulent tax returns.
- Other Fraud: Thieves may rent a house or get
a mortgage using your name, or give out your personal information to the police
in an arrest.
Identity thieves may use different methods to get hold of your information:
- Dumpster Diving: They rummage through trash looking for bills or other papers with your personal information on it.
- Skimming: They steal credit/debit card numbers by using a special storage device when processing your card.
- Phishing: They pretend to be financial insitutions or companies and send out spam or pop-up messages to get you to reveal your personal information.
- Changing your Address: They divert your billing statements to another location by completing a change of
- Old Fashioned Stealing: They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records or bribe employees who have access.
- Pretexting: They use false pretenses to obtain your personal information from financial institutions, telephone companies and other sources.
If you get your identity stolen, file a police report, check your credit and notify creditors and dispute any unauthorized transaction.
Some tips to safeguard your identity are:
- Don't carry your SS card in your wallet
- Never write down your PIN number on your card or a paper kept in your wallet
-Watch out for "rubbernecks". Block the key pad when entering the PIN to avoid someone looking over your shoulder
- Collect your mail promplty. Place it on hold if you are going away
an eye on billing cycles. If you don't get a bill on time, contact the
- Keep receipts and compare them to your bank statements
- Tear up
or shred receipts, credit offers, account statements, expired cards, etc.
Store personal information in a safe place
- Don't respond to unsolicited
- Install firewalls, passwords and virus protection software
Check your credit report yearly
As of January 1, 2012, California will join six other states in
limiting the use of a consumer credit report for employment purposes.
Washington, Oregon, Hawaii, Illinois, Maryland, and Connecticut have all
enacted legislation restricting employers’ use of credit reports. Similar
legislation is pending in several other states.
Employers in California may only use a consumer credit report for emploment pruposes if the report is
sought for one of the following:
1. A managerial position
2. A position in the state Department of Justice
3. A sworn peace officer or other law enforcement
4. A position for which the information contained in the report is required by law to be disclosed or obtained
5. A position that involves regular access to confidential information such as credit card account information, Social Security number, or date of birth
6.A position which the perosn can enter into financial transactions on behalf of the company
7. A position that involves access to confidential or proprietary information; or
8. A position that involves regular access to cash totaling ten thousand dollars ($10,000) or more of the employer, a customer, or client, during workday
If an employer procures a consumer report for one of the limited exceptions outlined in the statute, it must provide the person for whom the credit report is sought with written notice informing him or her that a report will be requested, the specific reasons for obtaining the report as provided in the statute, and a check box allowing the applicant to request a copy of the credit report at no charge.
Accordingly, employers who use credit information as part of employment screening or other
hiring purposes should evaluate their policies in light of the recent momentum against using such information in employment decisions.
FICO scores have been around since the 1950's and became a major
factor in determining a mortgage borrower's creditworthiness around 1995, when
Freddie Mac and Fannie Mae began recommending their use in the lending process.
The score, which ranges from 300 to 850, factors in how long borrowers have had credit, how they are using it and repaying it, and if they have any judgements or delinquencies logged against them. However, consumers are soon going to start sharing more personal information when applying for a mortgage.
In an attempt to develop a more well-rounded picture of a person's finances beyond credit, tools are being developed to help lenders dig a little dipper.
Fair Isaac Corp, the company behind the widely used scoring formula, and data provider CoreLogic announced last year a collaboration that will result in a separate score that will become available to mortgage lenders and that will incorporate information about payday loans, evictions and child support payments. In the future, information on the status of utility, rent, and cellphone payments may also be included. Since last year, the credit reporting agencies have began to provide information about consumer's income
and rental payment history as an option in their reports.
While this new information may open the door to homeownership for many "thin-file" consumers,
it may also make a borderline borrower look worse on paper.
It is hard enough to find a job in today's
economy, but the use of background and credit checks by employers to make
hiring decisions, can make it even tougher.
With more than four unemployed workers per job opening, employers are relying on credit and criminal reports to help thin the applicant pool and avoid liability
due to negligent hiring. Ninety percent of employers admit to running
background checks on job applicants (60% run credit checks). But at a time when jobs are scarce and 5.4 million people have been unemployed for more than six months, a discussion has been generated amongst lawmakers, employers and regulators about the way in which negative information is being used.
Millions people who lost their jobs during the recession at no fault of their own, may have been left unable to pay their bills on time, which damaged their credit and has now left them with an even more diminished probabilty of finding a job. Applicants who may have had a minor criminal offense 20 years ago can still find it hard to find employment, even if their records have been clean since.
A recent study has found no connection between an individual's credit rating and their likelihood to perform at a job. This belief has prompted several states to limit credit and background checks only to positions for which the information is pertinent and others to provide guidance to employers on how to properly evaluate criminal records in pre-employment screening.
This path, may very well lead to employers having to remove the "box" on employment applications that ask about a candidate's criminal past and evaluate the candidate's skills and experience first.