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Financial Literacy - Protecting your identity Click Here
MONEY MAKEOVER
ID thief opens fraudulent accounts
Tens of thousands of dollars were stolen from various creditors by unauthorized use of Mike's information.
Protecting your identity
  Money makeover: The problem
The problem: Mike is an ID theft victim
"Mike"
Profile: "Mike"
The problem:
Mike's personal information was compromised.
The plan:
Take the steps necessary to repair the harm caused by identity thieves.

While Mike's personal and financial information had been compromised, it did not necessarily make him a victim of identity theft. In fact, if the story had ended there, Mike might have simply set up a fraud alert or placed a credit freeze on his credit files as a precautionary measure and moved on with his life.

A 90-day fraud alert may be requested by a consumer who has a credit file maintained by any of the three major national credit reporting agencies (Equifax, Experian and TransUnion). This type of temporary alert places a statement on the consumer's credit files that alerts creditors to potential identity theft and asks them to contact the consumer by telephone before approving applications for credit. This type of alert offers protection by slowing the credit process and encouraging creditors to take reasonable steps to confirm an applicant's identity.

A credit freeze is considered to be less consumer-friendly than a 90-day fraud alert because a freeze completely blocks access to a consumer's credit files. The biggest downside to a credit freeze is the time it takes for "thawing," which means that significant planning is required before the consumer can seek new credit. In an emergency situation, the consumer would lack the ability to obtain substantial credit quickly. Consumers are advised to lift their credit freezes three to five days prior to applying for a new line of credit. Watch related video

These are powerful consumer tools when used properly, but there is no silver bullet in the world of identity theft. An identity thief can strike at any time, and Mike was about to discover this devastating truth.

Mike's encounter with fraud
Soon after receiving the letter from his former employer, Mike tried to use one of his primary credit cards and to his dismay discovered that all transactions were declined. Mike called a representative at his credit card company and learned that his account had been frozen after an individual who identified himself as Mike contacted them and attempted to obtain confidential account information. The representative who spoke with the apparently fraudulent "Mike" suspected something was wrong when the suspicious caller failed to answer general security questions correctly.

Key issues
Assess the damage done by the ID thief
Take steps to prevent further damage
Obtain an Identity Theft Report
Determine a plan of action to restore Mike's good name
Jump these money hurdles »

Just a few days later, Mike received a call from a major electronics manufacturer in reference to an order for three personal computers. The electronics company confirmed the order was submitted with Mike's name and address and was paid for with a credit card that had been opened fraudulently with Mike's personal information. Mike successfully convinced them he was the victim of fraud and had not placed the order. The shipment was halted just in time.

But Mike's victory over fraud was short-lived. In a matter of days the identity thief used Mike's name to open five brand new credit cards and submit at least six other applications for credit, which were subsequently declined for various reasons. Tens of thousands of dollars were stolen from various merchants and creditors by the fraudulent use of Mike's personal information. At this point, Mike enlisted the help of Kroll Fraud Solutions.

Our plan for Mike  


This plan was prepared by Matthew Kidder, lead investigator for Kroll Fraud Solutions.
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