Case Study: an Average Identity Theft Victim

Jasper, 46, worked as a clerk in legal agency. After number of years with the agency, Jasper got a letter from that agency alerting him to the loss of an external computer hard drive. The pivotal factor here is that although Jasper was no longer part of the government agency when he got the letter, the personal and financial details of Jasper had remained on file with the agency long after his departure.

This pretty much expose the Jasper's personally identifiable details including his Social Security number apart from checking account details, which the agency had used for direct deposit payroll. These conditions clearly pinpoint the fact that Jasper was at a risk

As you can pretty much gather from the above discussion, the personal and financial details of Jasper had been compromised but it does not make him a victim of identity theft. As a matter of fact, if the story had finished there, Jasper would just need to set up a fraud alert or placed a credit freeze on his credit files and move on.

As a consumer, you can request a three-month fraud alert if your credit file which is maintained by any of the three major national credit reporting agencies. These include Equifax, Experian and TransUnion. A fraud alert is basically a temporary alert that makes its presence felt on the consumer's credit files statement. It’s the job of credit agency to alert creditors to potential identity theft. Credit agencies also recommend that you contact them by telephone before approving credit applications. This kind of alert provides protection through reduction of credit routine and motivating creditors to take some pivotal steps in order to confirm the identity of an applicant.

As compared to fraud alert, credit freeze is not that consumer-friendly. This is because of the fact that credit freeze completely blocks access to a consumer's credit files. The main disadvantage of credit freeze is that it takes plenty of time for thawing. In other words, plenty of planning is needed before you can go for new credit. In crunch time, you are not going to get substantial credit on time. Because of this, it is advisable that you lift your credit freezes three to five days prior to applying.

After getting the letter from his former employer, Jasper was interested in using one of his primary credit cards. But to his disbelief, all transactions were rejected. Stunned by all this, Jasper contact a representative at his credit card company and find out that his account had been frozen after an individual with fake name contacted them and attempted to get secret account details. The representative who has a talk with the fake Jasper suspected that something was not right when the suspicious caller was not able to answer the general security question correctly.

After two or three days, Jasper got a call from a major electronics manufacturer in reference to an order for three personal computers. The electronics company clearly said that order was submitted with Jasper's name and address and was paid for with a credit card that had been opened fraudulently with Jasper's personal details. Jasper was able to convince the electronics manufacturer that he was the victim of fraud and no order has been placed by him. It was Jasper good luck that the shipment was halted at a crucial time.

But this win of Jasper was short-lived. In just few days time, the identity thief used Jasper's name to open five brand new credit cards. What’s more, identity thief also submits around six other applications for credit, which were subsequently rejected for number of reasons. In terms of statistic, tens of thousands of dollars were stolen from plenty of merchants and creditors by the fraudulent use of Jasper's personal details.

Key steps for Jasper to take:

  • Protect accounts from more damage
  • Request extended fraud alerts from Equifax, Experian, and TransUnion
  • Place security alerts with SCAN and ChexSystems
  • Add new pass code protections to all financial accounts (credit, banking, utility)

Jasper closed all of his tampered accounts, existing or new

Jasper reviewed the statements for all of his existing credit cards to confirm no fraudulent activity had occurred. If Jasper had noticed fraudulent transactions on a credit card or debit card, he would have closed those accounts and disputed the charges directly with his credit card company or bank.

In determining whether any other new accounts had been opened in Jasper's name, Jasper reviewed his credit reports from the Equifax, Experian, and TransUnion to identify any accounts orinquiries or any other entries he did not recognize.

Jasper found the fraudulent accounts had been opened in his name in addition to other credit inquiries that he had not authorized. These inquiries showed that the fraudster had likely attempted to open other accounts as well. Jasper immediately closed the fraudulent accounts and reported the unauthorized credit inquiries to the relevant creditors.

Finally, Jasper cleared all of his fraudulent transactions

Federal law provides you with certain protections against fraudulent credit and debit card transactions, therefore limiting your liability in a fraud case. The Fair Credit Billing Act (FCBA) puts in place processes to dispute billing errors, including fraudulent credit card transactions. The Electronic Fund Transfer Act provides protection to consumers for debit and ATM card transactions. You should utilize all these protections to your advantage.

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V Kumar
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Posted on Apr 23, 2011