When I first started working for Better Business Bureau in 2012, a large part of my job entailed traveling around Alaska to educate folks about common scams and the dangers of identity theft. I spoke at senior centers, Rotary Clubs and universities, and while people always seemed to agree that identity theft was bad, no one really seemed to understand exactly why it was bad. In the age of zero-liability credit and debit cards, why should people care if accounts are compromised? They just get the lost funds back right away anyways…
So what could an identity thief do with a few pieces of personal information? The short list is pretty straightforward:
- Open a new checking or savings account.
- Gain access to real accounts.
- Establish new lines of credit.
- Change addresses to receive mail.
- Obtain medical treatment.
- Commit crimes.
- Pass background checks.
- Steal children’s identities.
Yet many of these thefts, if expediently reported, will not likely cause immediate financial repercussions to the victims. But in the long-run, identity theft can affect credit scores which can result in less-than-favorable terms on loans, mortgages and credit accounts—an extra one percent on a 30-year mortgage could add upwards of $4,000 to the total cost. A big problem seems to be the fact that identity theft is such a hot topic in the news lately—consider the recent data breaches at Target and Adobe—and consumers appear to be growing complacent and desensitized to the issue.
The bottom line: If your identity is stolen and used to rack up thousands of dollars in charges, you probably won’t be held accountable for that money; but the damage to your credit report could literally take years to remedy.
A common question I often received while conducting identity theft awareness presentations was about the quality and effectiveness of monitoring services like LifeLock, and my answer remains the same: The services are incredibly effective and if paying that $10 every month eases your concerns then I encourage you to sign up; however, exercising a few proactive steps—for free—can accomplish the same thing:
- Exercise caution during the tax season, when occurrences of identity theft spike.
- Check bank and credit card statements every month.
- Sign debit and credit cards with an “X”—don’t leave cards blank as stores are often instructed to not accept unsigned cards; an “X” is a legally-binding signature.
- Shred unneeded documents.
- Check credit reports regularly at annualcreditreport.com.
Full Disclosure: LifeLock Inc is a BBB Accredited Business headquartered in Tempe, Arizona.