It’s a crime in which the perpetrators don’t wield guns or weapons—although history reveals that identity theft was originally connected with murder of the victim. Phone scams and dumpster diving took the place of violence, and now, internet technology has made identity theft more common and easier to perform without getting caught.
The Federal Trade Commission estimates that as many as nine million Americans have their identities stolen each year. The crime takes many forms. Identity thieves may rent an apartment, obtain a credit card or establish a telephone account in your name, and you might not know it for months.
Fortunately, much can be done to ward off potential threats. For one, always destroy—either by shredding, burning or some other method—bank and credit card statements or other documents that could have sensitive identifying numbers. And most importantly, be very careful about the types of personal information you give over the Internet. You are allowed to receive a free credit report each year from each of the three credit reporting agencies. It is a good idea to request credit reports to review your status. The central clearinghouse for credit report requests is annualcreditreport.com. You can also call the free service at (877) 322-8228.
Some victims resolve their problems quickly; others spend hundreds of dollars and many days repairing damage to their good names and credit records. Some may lose out on job opportunities or be denied loans because of the damage done to their credit.
An endorsement to your homeowner insurance policy is available that covers the expenses you incur dealing with the problems—but not the monetary loss of being victimized. Coverage includes lost income resulting from time taken off work to complete fraud affidavits, meet with or talk to law enforcement agencies; attorney fees incurred; and loan application fees to reapply when the original application is rejected solely because the lender received incorrect credit information. The average identity fraud policy has a coverage limit of $15,000, with a deductible of $250, and costs $25 per year.
Financial institutions must comply with the Gramm-Leach-Bliley Act (GLB) that requires them to ensure the security and confidentiality of their customer information. As part of the implementation of the GLB Act, the FTC issued the Safeguards Rule, which requires financial institutions to have measures in place to keep customer information secure.
Consumers have access to resources on how to protect their personal information and prevent identity theft, and they expect the same from businesses. Business owners can access a brochure available from the Federal Trade Commission—Protecting Personal Information: A Guide for Business. It does not appear that this crime will disappear anytime soon, so it is a good idea to add the insurance to your homeowner policy. It won’t prevent fraud from happening, but if it does occur, it can prevent a lot of frustration. iBi
