Avoiding identity theft

From my CBC radio national column, September 24, 2009:

The story earlier this week about a BC couple on the hook for $20,000 in loans after their identity was stolen should have all consumers on high alert. And that’s not just because of the money that Mark Gorst and Shannon Werry say was stolen from them. As they try to dig themselves out of their mess, they’ve lost their credit rating along with peace of mind.

Let's talk about identify theft. How do you define it?

This is where someone applies for credit in your name, and starts racking up charges without your knowledge. Sometimes this goes on for months or even years before you learn of the situation.

When it comes down to it, identity theft is a form of fraud…with someone pretending to be you for personal gain.

According to a piece I saw this week on CBC.ca, more than 12,000 people fell victim to identity theft in 2008, with losses close to $10 million. Now nationwide that does represent a huge amount of money, but if it happens to you, your life can be turned upside down.

What if anything can I do to protect myself?

First of all you need to take small precautions, like checking your credit card and bank statements regularly. You can do this either on-line or making sure you pay attention to when your credit card statements are expected to show up in the mail. If they’re late, you should call your bank or department store to check on their status.

You want to make sure somebody hasn't redirected the bills to another address, which they can use as a base to start the process of stealing money - or assuming your identity.

Plus, if you don’t have one, invest in a shredder and use it for everything from phone bills to credit card statements. Basically, if a document has your name, address, an account number or more on it, it should be shredded not tossed.

Keep your passwords private and your phone calls about your finances behind closed doors. Your bank tells you this – to NEVER share your PIN or secret passwords with even a spouse – but I know, it’s hard to do when you live with someone.

Also, don’t make calls to your bank or credit card company from your office or in front of anyone in your home such as a room mate or a spouse. If someone you know intimately, such as a co-worker, ex-spouse or roommate, they might easily be able to access your SIN, date of birth and if they know your secret password, they have the ingredients for identity theft.

So those are some small steps.

But I recommend taking another critical one, and that's regularly checking your own credit report.

How would I go about doing that?

You can do that at Equifax.ca or Transunion.ca. It will cost you about $24 each time for the instant online report, but it’s well worth it for the peace of mind. That way, if someone applied for credit in your name for example, your credit report would show that new account or it would show that some institution pulled your report therefore tipping you off that someone was seeking new credit.

If you check your report regularly, at least there would be minimal damage done.

Lastly, if you’re a known or highly potential identify theft candidate, alert both Equifax and Transunion in writing to document your potential situation to set up something called a fraud alert.

I've heard about credit monitoring services. What are they exactly?

These services - such as with Equifax and Transunion Canada--will alert you via email if there's suspicious activity on your account. Because these two services are also offered by the agencies that collect, report and keep track of your credit, are the best ones in my opinion, will alert you if credit is being opened in your name, offers some insurance if you are a victim of fraud and also offer access to your credit report and real people to talk to if you have a problem. They'll set you back $12 - $20 bucks a month.

Now I haven't signed up for a credit monitoring service. I'm quite happy to check in on my own credit rating. It's cheaper, and once every 3 to 6 months is more than frequently enough for me. But if you know you wouldn't keep up with checking your own as often, the monthly services might make sense for you.

What's to prevent someone from impersonating me to check out my credit score?

That’s a great question, but I’m not sure how much of an issue that is. If a would-be thief has all the info you’d need to access your account, why would they want to check your credit – they’d just go ahead and apply for some type of credit.

Just so you know, when you sign up for the first time with Equifax or Transunion, they’ll ask you for all your personal info such as your SIN, date of birth, address and then they’ll ask you for past credit info that only you should know…such as an old 10 year loan and payment and such to try and securely identify you. Once you’ve done this, you don’t have to do it again.

So if I do learn of suspicious activity in my accounts, what do I do next?

Call your financial institution and the police if you think it's warranted. Part of the problem with the B.C. couple is that by the time they had noticed the money was missing it was too late to proceed with charges. According to a local police officer, if more than a year had passed since the initial crime, it becomes harder to get charges approved by the Crown. So the sooner you know about the problem the better.