How to Avoid Identity Theft
How to Prevent Identity Theft
Do not pay for credit monitoring until you read this!
No one is tellling the truth about how to prevent idenity theft.
I don't know why. Identity theft is a major financial problem in the
United States, primarily because it is a very easy crime to commit.
If no one has obtained credit in your name
or used your credit card information to make illicit purchases you have
indeed been very lucky.
The reason I started this page is that no one was telling the truth
about preventing ID theft. Authors were writing articles that
misled readers into thinking that by taking certain precautions with
your sensitive information ID theft could be minimized.
That simply isn't true. Conventional tactics have minimal effect.
There are, however, some simple things you can do that will help
significantly and we will cover that here.
I am a retired Postal Inspector.
I investigated ID theft, among other crimes,
for over thirty years.
As I said, the reason ID theft is so
prevalent is because it is so easy.
If you have someone else’s identifying
information, i.e. their date of birth, Social Security Number, credit
account numbers, etc., pretending to be that person is not hard.
It is well within the capabilities of even
many intellectually challenged criminals.
Keeping your personal information out of the
hands of criminals is impossible.
Yes, I said
Read on, please.
I am very particular with taking precautions with
my credit cards and despite that my credit card has been cloned three
someone got my credit card information and
made several charges in a two day period.
Each time I still had the credit card in my
wallet and some criminal somewhere was making charges on it.
had imprinted the magnetic strip on their card with the data from the
magnetic strip on my card. That is called cloning.
was very upsetting.
You may have experienced the same thing.
There has been a lot of misinformation and
incomplete information circulated about identity theft.
Some of it has been by well meaning
Some misinformation has been promoted by
service companies allegedly trying to protect you from identity theft
for a fee.
There are dozens of ads on television and
other places that
lead you to believe they can help you for free but they all want to sell
you something. Virtually every single one wants a fee for their services, no matter
what they claim in their ads.
It is time the misinformation ends.
CONVENTIONAL METHODS TO AVOID ID THEFT
These are many of the conventional things that consumers are
advised to do to avoid Identity Theft:
All these things are good practices and I encourage
but they will not stop ID thieves.
HOW IDENTITY THEFT REALLY WORKS
We tend to hear about thefts of information during
Internet purchases, mail thefts, phishing, and fast talking
telemarketers because it makes good news copy, but
this is not
how most ID theft occurs.
How does most ID theft occur?
Please, if you don’t read anything else in
read the next sentence.
ID theft usually starts with a corrupt individual who works in a
legitimate business and is in a legitimate position to obtain sensitive
If this doesn’t make sense, let me give you some
actual examples encountered during previous investigations:
A corrupt clerk at an auto dealership who was assigned to file credit
applications was copying information from them and using the info to
obtain credit in customers’ names.
A corrupt employee of a medical microfilm imaging
company was using information from patient files to obtain credit cards
in their names at a private mailbox she rented.
The victims were patients of physicians
whose offices used the microfilm imaging service.
A motel employee who was stealing the information from customers’ credit
cards was using the info to make mail order purchases.
A mall store employee stole information from customers credit cards and
then encoded his own credit cards with the customers’ credit card
A department store employee who worked at a refund
counter at a discount department store stole the information from
customers’ credit cards and then called the credit card company
pretending to be the employee.
She used information from the refund
application and the credit cards themselves to request “duplicate”
credit cards from credit card companies.
She had the cards sent to an address under
A corrupt employee who worked in the accounting
section of a hospital copied down the personal information about
patients and sold it to other criminals who filed hundreds of fraudulent
A dentist office employee who copied down account
and credit card information and then simply called the credit card
companies and requested “replacement” cards be mailed to the customer.
Then she checked the customers’ mailboxes
and took the cards when they came in.
employees who clone credit cards of customers. There is a small
handheld device called a "skimmer" that copies data from the magnetic
strip of credit cards. These can be used by unscrupulous
employess of any business to copy your credit card electronically.
Restaurants are just the most frequent place they are used
Foreign criminals hack into a domestic Point Of
Sale system and download thousands of credit card numbers and personal
information. The recent compromise of Target department
store credit card
customers is a good example of this.
There are dozens of other examples but you get the
You probably have had legitimate access to
sensitive information at a job you worked at.
Think how easy it would have been to steal
is how it happens and you can’t stop it.
HOW TO AVOID IDENTITY THEFT
(as much as humanly possible)
To be sure, practically all employees of car
dealerships, doctor’s offices, dentist’s offices, motels, and retail
stores are honest, hardworking folks.
The problem is that it only takes that one
dishonest employee to steal your identity.
We cannot avoid these businesses.
We do not even want to avoid these
We need their services and we need their goods.
So, what can we do?
We can do these three simple things:
- Have your photograph put on your credit card.
- Get a credit card from a company that notifies
you via text message immediately when it is used.
- File a “consumer statement” with the credit
bureaus asking that you be contacted when a credit application is
submitted in your name.
Let’s take these one at a time.
CREDIT CARD WITH PICTURE
Here is a picture of my debit/credit card (sans
It has my picture on it.
If someone steals my credit card, they are going to
need to be a
balding old white guy
to use it.
Now, to be sure, there are certainly balding
old white guys stealing credit cards and I know because I have arrested
At least by putting my photograph on my
credit card, I have
limited the group of criminals who can use
my credit card if they get their hands on it.
Have your bank put your picture on your credit
It is usually free but if they charge for it, get
TEXT MESSAGE WHEN CREDIT CARD IS USED
Second, I said get a credit card from a company
that notifies you via text message when the card is used.
Please understand that there is nothing you
can do to prevent the theft of your credit card information.
You just have to accept this.
Just get your head around the fact that if
you are going to use a credit card regularly your credit card data is
going to be stolen.
It is eventually going to happen to you.
You can’t stop it.
What you can do is
illicit use when it occurs.
Usually, you can limit it to one illicit
Some credit card companies offer a service whereby
they send a text message to your phone each time your card is used.
I have one.
Usually when I give my credit card to a
waiter or waitress at a restaurant, I get a text message saying my card was
charged before he or she returns with the slip for me to sign.
When I use my credit card at a store, I
frequently get the text before I get to the door.
When I use my credit card at a gas pump, I
routinely get a text message before I finish pumping the gas.
Sometimes there is a delay of a few minutes
but it always arrives almost instantaneously.
Below are examples of the text messages I
receive when my card is used.
I got both text messages indicating I had used my
card at restaurants while I was still sitting at the table.
The second one, from Ruby Tuesday’s, I
received before the waitress returned with the charge slip for me to
If you have this service, when your credit card
data is stolen and there is an illicit charge made, you will get the
info in real time.
You will be able to notify your credit card
company before additional charges are made.
Happily, the first illicit charge tends to
be a small charge made by the criminal just to see if the card is
You can’t stop the first illicit charge but
charges number two through X
IF you act fast, sometimes you might even
get that first one reversed.
Let's say your card was one of the ones stolen by the foreign
Target department store hackers. They will sell the card info to
another criminal. He will usually first make a small charge to
make sure it is an active card. When you see the text message for
a charge you didn't make, you will know to shut down the card. It
is just a simple, effective way to avoid ID theft.
Not all banks offer this service on their credit
I got a credit card from another bank just
to get this feature.
The third thing you can do to avoid ID theft is add
a “consumer statement” to your credit report.
Some explanation is in order here.
The Fair Credit Reporting Act of 1992, Title 15 US
Code, Section 1681, requires credit bureaus to add consumer statements
to credit reports under certain conditions.
The full text of the statute is at
The statute anticipates the use of consumer
statements in cases where credit issues are in dispute.
We can use these consumer statements to our
advantage as you will see shortly.
When you apply for a loan or a credit card, the
bank where you are making application checks your credit.
They order a credit report that details your
There are only three credit bureaus where
they can get credit reports from.
They are TransUnion, Experian, and Equifax.
Interestingly, credit bureaus are not required to
notify you when they issue a credit report on you.
They should be statutorily required to
notify you (in my opinion) but they are not.
The presumption is that you authorized the
credit report and most of the time you did.
When you applied for credit with your bank,
you signed a statement agreeing to let the bank order a credit report on
The problem is, when an ID thief uses your personal
data to apply for credit in your name,
agrees to the issuance of that credit report in
The credit bureaus will permit you to submit a
“consumer statement” for inclusion on your credit report if you have
been a victim of identity theft.
It is extremely likely you have been a
victim of ID theft unless you just turned 18!!
As I mentioned, my credit card has been
cloned three times and I check it obsessively.
In this consumer statement say,
“I have been a victim of identity theft and I hereby
request that I be contacted at cell phone [your cell number here] to
verify the authenticity of any credit application before credit is
issued in my name.”
To accomplish this, first, order a copy of your credit report from all
three credit bureaus.
You can do this for free at
Do not respond to any of the slick
television advertisements or other advertisements offering free credit reports.
If you look into them you will find they are virtually impossible to get free.
one I have looked into charge for their services.
One is different. It really is free.
www.annualcreditreport.com is actually
It has links that will take
you to each of the three credit bureaus and you really can get your
credit report from each one for free.
Be forewarned that the
actual credit bureaus will each try extremely hard to sell you something, like
your credit score or a credit monitoring service.
If you decline these items, you will still
get your credit report and get it for free.
Seriously, it’s a
but if you turn down all the up-sell attempts, you really can get your credit
reports for free.
You will need the credit reports in order to file
To add a consumer statement to your TransUnion
credit report, send your consumer statement removal request along with
your name, address, and TransUnion File Identification Number (FIN) on
your credit report to TransUnion Consumer Relations, P. O. Box 2000,
Chester, PA 19022.
Here is a link to the web page regarding
Trans Union consumer statements:
To add a consumer statement to your Experian credit
report send your consumer statement along with a copy of your Experian
credit report to :
NCAC, P.O. Box 9701, Allen, TX 75013.
Additionally, they ask that you include
copies of two pieces of identifying information, e.g., driver's license,
utility bill, bank statement, etc.
Here is a link to the web page regarding
Experian Consumer Statements:
They may write you back telling you they put a "credit alert" on your
Just write back and
insist on a consumer statement and they will comply.
add a consumer statement to your Equifax credit report, send your
consumer statement and a copy of your credit report to
Equifax, P.O. Box 740256, Atlanta, GA 30374.
Here is a link to the web page regarding
Equifax consumer statements:
consumer statements have worked.
I have not applied for credit recently but a
friend of mine, who also has a consumer statement on file, did.
applied for a credit card.
got a call from the bank to confirm that he was really the one applying
for the credit card.
*** Update - August, 2012: It worked for me.
I applied for a new Sprint account and Sprint called me before issuing
the account. The representative told me she saw my consumer
statement on my credit report and called before approving the account!
Try the first three
techniques first but - There is a fourth technique that really works to
prevent ID theft. It is called a credit freeze. There is a
separate page one this website on credit freezes. When you apply to borrow money
from say, a bank, the bank checks your credit report before they loan
you money. When a criminal pretends to be you and applys to borrow
money from a bank in your name, the bank checks your credit report.
A credit freeze makes it impossible for the bank to check your credit
report. When the bank can't check your credit they generally won't
loan you or the criminal any money!
The drawback to a credit
freeze is before anyone can obtain your credit report, you have to
authorize it. That includes your own legitimate creditors.
If you open accounts very often, it can get to be a bit of a hassle.
For most folks (who open few accounts) it isn't a problem. If, for
example, you move a lot, it can get a bit onerous.
CREDIT MONITORING SERVICES
I close, let’s talk a little about credit monitoring services.
There really isn’t anything wrong with them
other than they are
These services notify you via email when a
credit report is issued in your name.
Say, for example, a criminal applies for a
credit card in your name.
The bank who receives the credit card
application will almost always pull your credit report before issuing
the credit card.
When they do, this triggers the credit
monitoring service to notify you of the credit check.
Now, if you had done what I told you to do
and filed consumer statements with the credit bureaus you should also be
getting a call from the bank, but I digress…
Either way, you can advise the bank that it
is a fraudulent application and stop the card from being issued.
Union offers credit monitoring service for $16.95 per month at
offers credit monitoring service for $14.95 per month at
offers various credit monitoring services from $14.95 to $29.95 per
recommendation is that you
subscribe to a credit monitoring service
- at least not until you have exhausted all of the free remedies.
You certainly should not subscribe to a credit monitoring service until
you have tried a credit freeze.
Most folks are not going to be the target of
repeated criminal attempts to steal their identities.
For most people, using a credit card company
that sends text messages upon usage, filing a consumer statement, and
making annual reviews of their credit reports is perfectly adequate.
There is an extremely small percentage of very unfortunate
folks, however, for whom credit monitoring actually makes sense.
My guess is maybe one percent.
Identity thieves are networked to a degree.
They tend to sell and trade identities,
sometimes multiple times.
If you find yourself the victim of repeated,
unrelated, attempts to obtain credit in your name, subscribe to a credit
NEXT: Fraud Alerts