How to avoid becoming a victim of identity theft - Money Talk$

Ebony, April, 2003

CARLOS Lomax figured out a way to buy more than $100,000 worth of merchandise without paying for it. He charged it to the Smiths--rapper/actor Will Smith and Atlanta Hawks' basketball player Steve Smith.

Lomax's spending spree came to an abrupt end when Will Smith's business manager noticed that the star was billed $5,447 worth of charges from a Sears account in Pittsburgh and notified federal authorities. They traced the expenses to Lomax, who was using his own Pittsburgh home address but giving Smith's name, Willard C. Smith.

Lomax, who had 14 credit accounts in Smith's name and had used 12 of them to rack up charges totaling $32,897.34, was convicted in U.S. District Court of the growing and insidious crime of identity theft. Lomax already was on probation for incurring $81,000 in credit card bills in the name of Steve Smith.

Identity theft, which is becoming one of the fastest-growing financial crimes in the nation, is taking personal information such as a social security or credit card number without permission. Most thieves use the information to apply for credit, make purchases, open a bank account, or write bad checks.

Not only rich and famous entertainers and athletes are targets. More than 40,000 people, most of them average citizens, are victims of this crime every year. In 2000 and 2001, identity theft accounted for 43 percent of the complaints received by the Federal Trade Commission; and the amount of money lost grew from $160 million in 2001 to $343 million in 2002, according to the commission.

Anyone could be the next victim, simply by charging tickets to a concert, writing a check to pay for groceries, or calling home using a calling card. Each transaction gives an identity thief access to personal information.

How can you avoid becoming a victim? You need to pay attention to who is around you when you give out personal information. You should also shred personal documents because thieves go through the trash to find discarded pre-approved credit card applications, receipts and old bills. They also steal information by taking a wallet or acting like a telemarketer and asking for a social security number, name and birth date.

Most people don't find out they are victims of identity theft until they are turned down for a loan or credit card, get charged for purchases they didn't make or get called by collectors. Some victims have had to pay bail or been jailed because of unpaid bills they didn't know existed.

If you suspect you're a victim of identity theft, you should immediately notify the credit card company. Call the fraud department of each of the three major credit bureaus to request a copy of your credit report. (Trans Union 1 (800) 916-8800; Equifax 1 (800) 685-1111; and Experian 1 (888) 397-3742) The report can cost more than $9 a copy, but a free copy can be sent if your credit report is inaccurate because of fraud. Write to the agencies if you are disputing any items; keep copies of all the letters you send; and document all the phone calls you make. Report the theft of mail to the United States Postal Inspection Service. Or report the use of your social security number to 1 (800) 772-1213.

To decrease your chances of becoming an identity theft victim, call 1 (888) 5OPT-OUT to have your name removed from credit bureau marketing lists.

Here is a list of 10 things to do to prevent becoming a victim of identity theft:

* Don't carry around extra credit cards or important paperwork such as your social security card, birth certificate or passport unless you have to.

* Don't write your social security number on checks.

* Don't use passwords that are easy to figure out, such as part of your social security number, birth date, middle name, or address.

* Keep a list of bankcard and credit card numbers, expiration dates and telephone numbers so that companies can be quickly notified if you suspect identity theft or unauthorized purchases.

* Don't give out your bank account or credit card numbers to a telephone or door-to-door solicitor.

* Only make online credit card charges in a secure site or in an encrypted mode, not in an unprotected e-mail. Secure sites use https not http in the Web site address.

* Cancel credit cards that you're not using.

* Review credit card and bank statements carefully.

* Request a copy of your credit report annually.

* Don't do business with any company that only uses a Web site or P.O. Box without a physical address and phone number.