Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.
After spending his Friday evening voluntarily cleaning up hundreds of documents containing names, addresses, Social Security numbers, bank account information and other information coveted by identity thieves that were accidentally strewn across a busy Sheepshead Bay intersection, we asked Reisman if he could focus this week’s column on identity theft, and how residents can protect themselves. Here, ladies and gentlemen, is the advice of an expert and a superhero.
In 2010, 270,500 taxpayers were victims of income tax identity theft;
In 2011, more than 640,000 taxpayers were victims;
In 2012, more than (fill in the blank) will be victims.
You don’t have to be a victim.
You’ve heard the news, ‘bank security hacked, depositors personal information stolen,’ ‘laptop computer left at airport, personal information of all employees lost,’ ‘government agency throws out sensitive taxpayer information in dumpster,’ ‘cleaning lady throws out tax returns with dirty rags, and litters local street.’ At a recent tax seminar, more than half of the tax preparers reported a doubling of identity theft amongst their clients — in Brooklyn. Identity theft is the number one consumer complaint to the Federal Trade Commission.
Your tax preparer calls and says that your tax return cannot be electronically filed because your (or your spouse’s, or your child’s) Social Security number was already used on another tax return. And your reaction is: ‘The IRS will help take care of it.’ Right? With what manpower? Despite common belief, the IRS does not know everything. The Washington Post reported that 48,800 prisoners claimed $130 million in fraudulent tax refunds last year, and that there were 940,000 fraudulent tax returns last year claiming $6.5 billion in refunds. The IRS is overloaded.
If you are a victim, you will not get your refund for many, many months. You will not be able to e-File without obtaining other ID proof.
You will suffer.
If you have not had your identity stolen, you probably know of someone who has — a neighbor or a family member.
Identity theft happens and you have no control. Or do you?
Take Preventative Action:
- Don’t just trash your mail — shred it first. This includes all financial documents and any paperwork containing any personal information, including old bank statements, bills, and pre-approved credit card offers.
- Don’t carry your Social Security card in your wallet or purse. Resist giving out your number. Offer some other means of proof.
- Don’t trust the internet, the phone, or that nice stranger. Don’t give out your personal information. If you shop online, only shop on sites that encrypt your credit card information. These sites begin with ‘https’ instead of the usual ‘http.’
- If you use a computer, don’t open unsolicited emails. Make sure your computer has a firewall, anti-spyware, and anti-virus software — and keep these up-to-date.
- Don’t use obvious passwords like your birthday, mother’s maiden name, or the last four digits of your Social Security number. Use numbers, upper- and lower-case letters, and symbols in your password — and change it at least every three months.
- Secure your information at home, especially if you have a roommate, domestic help, or any contractor around.
- Don’t use Wi-Fi to access secure accounts.
- Photocopy all documents you have in your wallet or purse — driver’s license, credit cards, etc. If your wallet or purse is stolen or lost, you will know what was in it and can take immediate action.
- Note when bills are supposed to arrive, and inspect them carefully for unknown charges.
- Inquire if you receive any unsolicited credit cards, or denial of credit.
- Carefully review your credit report, as it shows all of your credit cards, loans, and your payment history.
- By law, you can have a free copy of your credit report each year from each of the three credit reporting companies: Equifax, Experian, and TransUnion. I suggest ordering from one company in January, from the second company in May, and the third in September. And if you are married, order your spouse’s report a month later (February, June, and October). Use www.AnnualCreditReport.com. This monitoring is one of the most important steps to safeguard your identity.
- If you are not sure about something, err on the side of caution. Ask for help from the credit agencies.
- Don’t leave envelopes containing checks in your home mailbox for the carrier to take. Drop these in the mailbox.
- Don’t throw out an old computer. Get help to delete the hard drive.
On The Fringes:
- Pay attention to your medical bills to make sure they are yours.
- And don’t forget the children. According to www.AllClearID.com, children are 35 times more likely to have their identities stolen than are adults. By the way, this site is free, as is www.CreditSesame.com.
Have a safe week.
Joseph Reisman, of Joseph S. Reisman & Associates, has been serving tax prep and business accounting expertise from his Coney Island Avenue office for more than 25 years. Check out the firm’s website.