Identity Theft- It's Everywhere

Friday, March 06, 2015

By Steve Harless, CPA 
Of all the things that can be stolen, your identity is probably the most damaging. Identity theft occurs when someone uses your personal information to commit fraud, open accounts or make purchases in your name and brings with it a ripple effect of problems that could take a year or more to sort out. If you have been a victim of identity theft, you will need to repair your credit history and possibly your standing

By The Numbers

  • 12 million Americans were victims in 2012.
  • Florida has the highest per capita rate of reported identity theft complaints followed by Georgia (Miami-Ft. Lauderdale-#1).
  • 1 in 4 people receiving letters regarding a data breach become a victim of identity theft and fraud.
  • 32% do not notify the police of their theft.
  • The elderly are most susceptible to government benefit fraud and medical identity fraud.
  • The highest percentage of victims are between ages 20 and 29 due to their constant use of social
  • Mobile security thefts have risen 350% since 2010.
  • 68.4% of individuals use the same password for multiple websites.
  • The IRS processed $4B in fraudulent refunds for 2012.
  • There were 1.2M tax-related identity thefts in 2012 and 1.6M in the first 6 months of 2013.
  • The IRS sent 655 refunds to a single address in Lithuania and 343 refunds to a single address in Shanghai in 2012.

Commitment, Caution and Foresight

  • Keep all important documents secure, especially your social security card.
  • Be mindful of credit card use, keep your card in sight when it is used.
  • Secure gadgets and passwords, change regularly and use a unique password on every site.
  • Limit the information you use online, especially Facebook, Twitter, and other social media.
  • Keep open communication with your bank, inform them when you are traveling.
  • Avoid opening unfamiliar links.
  • Don’t miss out on your mail, pick up often and hold at post office when traveling.
  • Secure your receipts, scan and shred.
  • Keep your PIN secure.
  • Check your credit report regularly (
  • Don’t share personal information on the phone. The IRS will not call you!

In order to truly recover from identity theft, you must be diligent and take specific steps.

Generate a Report

  • Immediately after the discovery of identity theft, create an Identity Theft Affidavit through the Federal Trade Commission (FTC).
  • With your completed Affidavit, file a police report.
  • Together, your Affidavit and police report form your Identity Theft Report. You will need copies of this report to send to credit agencies and the IRS.

Repair Your Credit Report

  • Pull your credit report! (Equifax, Experian and TransUnion). These should be free because you have been the victim of fraud.
  • Have the credit reporting agencies place a fraud alert on your file. You will only need to contact one bureau, which will notify the others.
  • Write letters disputing each charge and send certified mail with a copy of your credit report highlighting the error. Do this for each error reporting from each agency.
  • Request to have information that was the result of the identity theft blocked from your credit report.
  • As problems are resolved, obtain a new credit report. Identity theft can have long-running ramifications, so keep up with your credit report regularly.

Contact Lending Institutions that Issued Credit

  • Get in touch with the fraud departments at the companies that erroneously authorized credit to the thief in your name.
  • Send these companies the same letters and credit report copies.
  • Ask the companies to block fraudulent information, and the company will have to stop reporting the fraudulent information and will not be able to sell the debt for collection.
  • Request copies of the documents that were fraudulently used to get credit or make changes in your name. This will enable you to have a copy of the fraudulent signature. The company is required to send it to you within 30 days of your request.

Inform the IRS

  • As indicated above, tax identity theft is also a problem. In this case, the thief has used a taxpayer’s identity and real or falsified W-2s to file fraudulent returns claiming a refund. You may not know this has happened until you file and find out your refund has already been taken.
  • If you think someone has stolen your refund or used your social security number, notify the IRS immediately.
  • Fill out the IRS Identity Theft Affidavit, Form 14039.
  • When you receive correspondence from the IRS, respond right away.